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Government hikes maize price

John Kapito


By Deogratias Mmana:

A peasant farmer sells his maize to Agricultural Development and Marketing Corporation (Admarc) at K160 per kilogramme (kg).

When he wants to buy the same maize from Admarc, he will have to pay K205 per kg effective Friday.

This means that a peasant farmer will sell his 50 kg bag of maize to Admarc at K8000 and spend K10,250 to buy the same bag from Admarc.

Government has announced the upward revision of the selling price from K160 to K205 per kg in a letter dated September 20, 2021 which is signed by Principal Secretary for Agriculture Erica Maganga to Admarc General Manager.

“The price was arrived at upon observing the cost of procuring maize as well as considering that the significant amount of resources for the procurement of maize have been sourced from the commercial banks hence the price also factors the cost of loan repayment,” reads the letter.

Ministry of Agriculture spokesperson Gracian Lungu confirmed the letter.

Director for Centre for Research and Consultancy Milwad Tobias has faulted government for pushing the cost of its bad decisions to innocent people.

“Admarc has been in debts by its own making. Now it is borrowing money and asking people to pay for the loan through price hike of maize. It is unfortunate,” Tobias said.

Tobias said the right way to balance interests of producers and consumers is by helping farmers to increase productivity.

“Figures from Ministry of Agriculture estimate that the yield potential for maize per hectare is 2.5 tons (50 bags of 50kg each). If a farmer would achieve that, even if farmers would sell maize at K100 per kg, they would earn K250,000 per hectare. A farmer would profit and the buyer would find the price reasonable,” said Tobias.

Tobias said the price hike shows that as a nation, Malawians are yet to understand agriculture and food security.

“The rule of thumb everywhere is that food must be cheap because it is a basic human right. When making decisions the interest of farmers as producers and those of consumers must be carefully considered.

“Think of a person earning K50,000 per month. Think of a person surviving on small vending or small employment at a car wash, in the shops and so on. Those people must live too. They are Malawians too. They must be protected,” he said.

Consumers Association of Malawi Executive Director John Kapito has also accused government of transferring its obligations to innocent consumers who are already laden with high cost of living.

“This is really serious. The current cost of living is already too high and it was being cushioned somehow by the low prices of maize and for Government to surprise consumers with this higher prices is being inconsiderate,” Kapito said.

He added: “Malawian consumers have no money. The majority of them have no access to reliable incomes and the incomes are too low to afford the newly introduced prices. It must be understood that Government has its social responsibilities to ensure that people have adequate daily needs especially food and unfortunately this increase is so huge that not many Malawi families those that are already currently going through serious economic challenges can afford.”

Kapito further said: “There is no way government must transfer its obligations to the private consumers who are not interested to know whether they borrowed this particular money from banks. Government could have used our own taxes that it collects from us as priority to buy maize.”

“No one authorised government to buy maize using bank money and pass on such poor decisions on innocent people. It is unfair, it is unrealistic. Malawians are so desperate now they have no access to resources and we wish someone in government understood the challenges ordinary people are faced with and this increase is so huge,” he said

Admarc board chairperson Alexander Kusamba Dzonzi told The Daily Times Friday that so far NBS Bank offered K25 billion loan to Admarc; MyBucks International K5 billion while Eco bank has offered an amount between K10 billion and K16 billion.

In June 2021, the Parliamentary Cluster Committee on Agriculture, Irrigation, Natural Resources and Climate Change asked the Ministry of Finance to allocate K95 billion to Admarc to be used for buying farm produce.

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