THE Centre for Trade Policy and Development (CTPD) says the Food Reserve Agency’s (FRA) low maize purchasing price is detrimental to rural growth as it will erode opportunities meant to enhance rural income disbursements.
In a statement, Wednesday, CTPD senior researcher Dr Simon Manda observed that the FRA’s maize purchase price set at K110 per 50Kg bag would discourage small-scale farmers and other rural producers from engaging in agriculture.
“CTPD has observed with great concern that the recently-announced purchasing price of grain by the Food Reserve Agency are not cost reflective and can hurt farmers. CTPD also notes that the current prices only highlight historic controversies associated with State intervention in agriculture. We further note that these prices will not help to stimulate rural growth as it will erode opportunities meant to enhance rural income disbursements necessary for driving an agricultural transition, poverty reduction, commercialization and value addition. Therefore, we think that these prices will discourage small-scale farmers and other rural producers to engage in agriculture,” Dr Manda stated.
“CTPD advised that if care is not exercised, the country risks failing to produce a stream of empowered rural producers capable of commercializing and even transitioning into diversified economic and livelihood avenues. In addition, such low purchasing prices has the potential of depressing private sector actors, who would even push their buying prices further down, undercutting what has been announced by the FRA, especially that the institution is associated with persisted delays in paying farmers.”
He further stated that with the growing public external debt, estimated at US $11.2 billion, could mean that payment towards procurement of strategic reserves might take longer than the five to six month delays which were the standard in recent years.
Dr Manda, therefore, suggested that government should emulate how neighbouring countries limited the State’s role in crop marketing to stimulate higher market commodity prices.
“Regional experiences, such as from Tanzania, have shown that it is possible to limit the extent of State intervention and stimulate private sector actors to provide competitive prices even better than is provided by our government. The difference has been that our friends have been bold enough to carefully think through benefits of private sector engagement in agriculture. Such efforts have seen cost reflective prices prevail, thereby, expanding opportunities for local producers,” he stated.
And he urged government to consider allocating part of the K10 billion stimulus package to the purchasing of grain by the FRA to ensure timely payments.
“In light of the COVID-19 pandemic and the need to ensure availability of funds for the most vulnerable groups, CTPD urges government to consider allocating part of the K10 billion stimulus package recently announced by the Bank of Zambia to support procurement of grain by FRA as this will be critical in ensuring that our local farmers get their payments on the spot should they opt to sell their grain to the Agency. This will go a long way in protecting small-scale producers from the harsh economic hardships the country is currently going through,” stated Dr Manda.