Policy inconsistency key concerns limiting private sector participation in agric – CUTS

THE Consumer Unit and Trust Society says the Food Reserve Agency’s decision to review the maize price is a sign of policy inconsistency. The FRA last week revised upwards its maize purchase price for this year’s crop marketing season from K65 per 50kg bag to K70.

On Friday, FRA board chairperson Joe Simachela announced that the agency had increased the maize purchase price from the original offering price of K65 to K70 per 50Kg bag. But in a statement yesterday, Consumer Unit and Trust Society centre coordinator Chenai Mukumba stated that policy inconsistency had remained one of the key concerns that had limited private sector participation in the agriculture sector for a number of years.

“On Friday 27 July, a week after the FRA’s announcement that it would purchase maize at K65 per 50kg bag for the 2018 crop marketing season, the Food Reserve Agency (FRA) announced that the Board and Management of the FRA had decided to review the price of maize upwards with consideration of a number of factors. The FRA will therefore be purchasing maize at K70 per bag this farming season,” Mukumba noted “While the FRA indicated that the decision to review the price of maize was because it had received mixed reactions from various stakeholders which necessitated further consultations, the decision raises concern regarding policy inconsistency in the agricultural sector. And as stated previously, CUTS is of the view that rather than changing the FRA price, the government should rather have redirected its resources to facilitating farmer access to private sector markets in light of the low FRA price.”

Mukumba stated that even now there were areas where the private sector was able to offer higher prices than the K70 that the FRA was offering.
“In some areas farmers are able to sell their maize at up to K80 per 50kg bag. It would therefore have been in the best interest of farmers to have had the government provide the necessary resources to access these markets. We, therefore, remain of the view that the government should redouble its efforts to ensure that farmers have access to private sector markets so that they are able to sell their maize at the prices that the private sector is offering at the moment,” Mukumba stated.

“An avenue to access private sector prices that has remained underutilised is the Zambian Commodities Exchange (ZAMACE). ZAMACE provides a transparent trading platform for all actors in the agricultural sector. Farmers particularly would be able to benefit from its operations as it provides a platform for them to store their maize in certified warehouses so that they are able to sell it at a later date at a competitive price. Once a farmer has stored their maize in a ZAMACE certified warehouse, they receive a receipt that they can either sell, or use as collateral to obtain a bank loan.”

Mukumba stated that ZAMACE also worked in the best interest of the other agricultural sector players.
She stated that millers were able to purchase maize through a transparent and competitive bidding process; and ultimately consumers benefitted because they would be able to buy mealie-meal produced from maize that had been bought at the most competitive price.

“In order to promote a private-sector led agricultural sector as espoused by the Seventh National Development Plan, it is imperative that policy consistency remains a key feature of the sector. This year we have seen policy changes in both the input and marketing side of the agriculture sector with changes undertaken in the implementation of the FISP programme – and now most recently with the FRA price,” Mukumba stated.

“Such changes serve as a deterrent for the private sector to invest in agriculture, which is contrary to our aspirations as a country. We, therefore, urge the government to take a more long-term approach to their decision-making by ensuring policy consistency and working to link farmers, particularly small scale farmers, to markets.”

Source: The Mast