The Civil Society for Poverty Reduction (CSPR) says maintaining maize subsidies is unsustainable as it does not guarantee a reduction in mealie meal prices.
And Musosa has urged government to ascertain the reasons behind the skyrocketing mealie meal prices and address it.
Over recent years, government has maintained huge subsidies on maize production via the Farmer Input Support Programme (FISP) programme, with allocations in the 2018 and 2019 national budgets at over K1.7 billion and K1.4 billion, respectively.
Additionally, selected millers have continued receiving subsidized maize from the Food Reserve Agency (FRA) in a bid to cushion supply shortages in some parts of the country and tackle high mealie meal prices.
However, prices of the commodity have skyrocketed to well over K150 per 25Kg breakfast bag in the aftermath of drought.
In an interview, CSPR programmes director Edward Musosa charged that government was cash strapped and could not continue to afford spending money on subsidies in view of persistent challenges in the implementation of the FISP.
“Currently, the government is cash strapped in that spending even on the current subsidies, which are on the agriculture side, such as the FISP, has been reducing and has not been consistent. So, introducing another subsidy to incentivize the masses, because already, you have the Food Reserve Agency, which is subsidizing the prices of maize, so now bringing a consumption subsidy…the question is: can the current resource envelope allow? And then, recently, we had just been in Parliament asking for a (K9.8 billion) supplementary budget. Will we go back again to bring in that sort of subsidy? And then, how sustainable is it also for our country to have and where is that money going to come from?” Musosa wondered.
“So, if you bring in subsidies, it means every year, we are going to be including subsidies in our Medium Term Expenditure Framework (MTEF); we haven’t budgeted for subsidies and mealie meal. In our national budget, we haven’t included that. Our advocacy right now is that, government should reform the Farmer Input Support Programme and not subsidies, otherwise, other sectors are going to suffer.”
And Musosa urged government to get to the bottom of what had triggered the hike in mealie meal prices and address it.
“What we will urge the government is to engage as many stakeholders as possible because you can’t just jump to subsidize your maize when you haven’t understood the root cause of the current spike in the price of mealie meal! Is it the market forces, is it at policy level? If it’s at policy level, government should just fix their policies to bring the market at the market level. Currently, we are being told that the current grain stocks, which we have are sufficient to categorize the country as food secure and also ensure that the prices are kept. So, just because you bring in the maize subsidy, doesn’t necessarily mean that the price of that particular product is going to reduce to levels where people can afford, but it may also continue rising,” said Musosa.
“However, as we have always promoted, government must engage in a dialogue with the Millers Association of Zambia (MAZ) and get to the private sector to establish where the source of the problem is. If it’s an issue of increased cost of doing business, then the government must look at how they will revise the mealie meal position. If it’s an issue of the prices, which are being tempered with within the market, then government must move in to address that illegal practice. If it’s established that perhaps because there is a much higher demand for our maize within the region given natural disasters, which have affected the region, then the government may need to regulate the export of maize. What we are recommending is that let government get to the bottom of what is causing the hike in mealie meal prices and tackle that.”