Admarc and its ‘chicken arithmetic’
Malawian maize producers were happy on Friday when they learnt that government has directed the Agriculture Development and Marketing Corporation (Admarc) to raise the price of buying maize from K150 per kilogramme to between K180 and K200 per kg.
Briefing reporters in Lilongwe, Agriculture Minister, Kondwani Nankhumwa, said the state-owned grain marketer would pay K180 for a kg of maize bought at farmers’ doorsteps while it would pay K200 for a kg of maize brought to its depots.
“Now what government has done strategically it to make sure that Admarc starts buying maize. Admarc already started buying maize in July this year at a price of K150 per kg but government has directed Admarc to raise the price to K180 per kg if it is buying from the farmers directly to K200 per kg if the farmers are delivering at Admarc depots.
“Adding to that the National Food Reserve Agency has been directed to start buying maize at the same price of around K200 per kg. By so doing, shortly we are going to flood the country with maize, so that we stabilise maize prices in the country,” Nankhumwa said.
The decision to flood the market with maize to stabilise prices comes at a time the price of the commodity is now hovering around K180 per kg in most districts in the country.
Currently, selling price for maize at Admarc stands at K150 per kg.
Over the past years, Admarc, which comes late on the market to buy the grain, has been buying maize at a higher price and selling it at below cost.
Economics Association of Malawi president Chikumbutso Kalilombe, noted Tuesday that it does not make business sense for Admarc to buy maize at K200 per kg and sell it at K150 per kg.
He said Admarc and the Ministry of Agriculture owe Malawians an explanation on how the cost will be covered.
“For example, is there a subsidy government is putting on maize sales price?
“The past K45 billion bailout we had on Admarc is still haunting us as a country so being open about what is happening is important to allay worries and concerns,” Kalilombe said.
Admarc spokesperson, Agness Chikoko Ndovi, said her organisation will wait for Capital Hill for directions on any changes in the selling price of the grain.
Ndovi said Admarc has since stopped maize sells until it completes buying the grain.
Nankhumwa and Principal Secretary for Agriculture, Grey Nyandule Phiri, could not be reached for comment yesterday.
But Minister of Finance, Joseph Mwanamvekha, said the government is committed to ensuring that parastatals are efficient in the way they use financial resources.