Costly political posturing
By now, it is clear that the farm gate prices that the government announced recently have not caught the fire of excitement.
Just last Wednesday, Grain Traders Association Chairperson Grace Mhango was on Times Radio, where she claimed, in Times Talk programme, that it is becoming difficult for buyers to buy produce from farmers because the farm gate prices are unrealistic.
She said, for example, that, last year, soya fetched good prices because there was poor yield in India and China, such that they had to source soya from countries such as Malawi.
This year, however, there is nothing like that. This is according to her. She claims that, if the truth be told, supply is higher than demand, which means market forces should have been allowed to apply.
However, some of the farmers that phoned presenter Brian Banda indicated that they were okay with the farm gate prices.
They said, for example, that the Kwacha was devalued by 25 percent in May 2022. They also said that fertiliser prices have been rocketing, meaning that the cost of inputs in the 2023-24 agricultural season will be higher than in the 2022-23 agricultural season.
The farmer callers also said, on top of the two factors, they want to make profit.
As at now, it is clear that there is a deadlock.
And I know the reason why. The truth is, the government— read, politicians, for the President who heads it is a politician, anyway— and private sector players play two different ballgames.
I mean, the government works on political realities while businesses base their decisions on business realities.
In the case of farm gate prices, it is clear that, as the 2025 presidential, Local Government and parliamentary elections approach, government officials are basing their decisions on political realities. In this case, they are playing the politics of appeasement, trying to please farmers through word of mouth when action cannot match the words.
On the other hand, private sector players base their decision on economic realities.
As such, deadlocks are bound to emerge.
In the end, it is a case of grass suffering at the hands [read, feet]of the proverbial elephants.
The grass, in this case, are farmers while government and private sector elephants tussle.
I can see no one benefitting from the farm gate prices, a development that has culminated in Malawi’s staple commodity, maize, fetching a minimum of K500 per kilogramme (kg), K220 up from the price set in 2022.
Soya is now selling at K800 per kg from K480 per kg in 2022.
Minimum prices for other crops have been set, too. For instance, the minimum price for polished rice is K1,000 per kg while unpolished rice is fetching a minimum of K500 per kg. Sorghum’s minimum price has been set at K400 per kg while finger millet is now fetching K550 per kg, with pure beans selling at K700 per kg, mixed beans at K600 per kg and white beans attracting a minimum price of K650.
Shelled groundnuts, on one hand, are fetching K950 per kg and unshelled groundnuts, on the other hand, are fetching the minimum price of K800 per kg.
Agriculture Minister Sam Kawale indicated, after the minimum prices were set, that the government felt compelled to act after getting reports-maybe through the National Intelligence Bureau— that some unscrupulous people were buying crops from resource-poor farmers at pitiable prices. He actually branded those buying farm produce for a pittance as “inhumane”. Fine and well.
In the end, though, both the government and private sector players are playing a game that will cast them as twin players in the game of playing with people’s lives.