State-run grain trader, the Agricultural Development and Marketing Corporation (Admarc), has set aside over K62 billion for use in purchasing maize from farmers this season as it has now entered the market full-throttle.
Out of the amount, K12 billion comes from the Treasury in line with the budgetary allocation for the cause while the other K50 billion would be sourced through loans secured from local commercial banks.
This season, the firm intends to buy about one million metric tonnes of the staple grain at the government-set K150 minimum price per kilogramme (kg). This would be done in three trenches of 300,000 metric tonnes (mt) each.
Of the volume, Admarc has, however, only secured 4,000mt since the grain trader entered the market, starting with the Southern Region, on June 30 this year.
Admarc Board Director Allan Chiyembekeza told journalists yesterday that priority in maize purchase would be given to farmers.
To attain this, Chiyembekeza said the corporation would split the purchases into four lots, where farmers with between one and 40 bags of maize were accorded a chance to sell first, followed by farmers with from 41 to 100 bags in the second lot, and then 100 to 200 bags in the third lot while farmers with over 200 bags would be incorporated in the fourth and last lot.
Ironically, the grain trader enters the market as some vendors have been duping farmers in some parts of the country, where they have been buying maize at as low as K70 per kg, about 53 percent below the farm gate price.
Estimates show that maize production will increase by 17.5 percent, to 4,447,494mt from 3,785,712mt produced last season.
Admarc General Manager Rhino Chiphiko said the grain trader was positioned to mop out all excess grain from the market.
“With the measures put in place, first to benefit from their toil would be farmers. We are geared to buy maize from all farmers who we know are ready and willing to sell their commodity to us,” Chiphiko said.
Farmers Union of Malawi President Frighton Njolomole hailed Admarc for finally entering the market.
“We are happy that Admarc has finally entered the market. Some farmers might not have sold to vendors yet and we believe the entry of Admarc into the market would have a positive impact on both maize prices and farmers’ revenue,” Njolomole said.
A recent report by International Food Policy Research Institute indicates that less than 10 percent of farmers who sold maize in June received a price equal to or greater than the minimum farm gate price.
Grain Traders Association of Malawi Chairperson Grace Mijiga-Mhango said they expected prices of the commodity to pick up going forward.
She called on the government to continue securing international markets for the commodity if farmers were to produce more maize in the coming season.