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On the saddle: Robbing farmers through low prices for their crops

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Poor weather conditions during the just ended farming season means production of much of the crops in the country will be lower than normal, resulting into low supply of the same on the markets.

At the same time, low production is also likely to result into increased demand for the crops, under normal circumstances.

While unplanned reduced production for a crop is bad for the farmer, the same could be compensated through higher prices where the situation translates into higher-than-supply market demand.

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It is actually a basic economic factor that when demand surpasses supply, the price goes up.

The current situation in Malawi, where reduced production has been experienced in most crops, should therefore translate into higher prices for many crops and better incomes for farmers.

Initial estimates by the Ministry of Agriculture, Irrigation and Water Development—released in February this year, puts Malawi’s national maize production at 2.719 million metric tonnes, which is 2.0 percent lower than the 2014/15 final round estimate of 2.776 million metric tonnes.

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Production of groundnuts, beans and pigeon peas is expected to decrease by 4.5, 5.2 and 3.1 percent, respectively. Cotton production is also expected to decline significantly by 43.2

percent.

However, production of soya beans is on the other hand projected to go up by 6.1 percent while that of rice is estimated to also slightly increase by 1.4 percent.

The Ministry of Agriculture also expects tobacco production to increase from 193 million Kilogrammess in the 2014/15 agricultural season to 211 million Kilogrammess this season.

In terms of livestock, the population of cattle has increased from 1.3 million to 1.4 million this year, representing a 3.1 percent increase as compared to the final round for the 2014/15 agricultural season. The population of goats and pigs has also increased by 6.8 percent and 11.8 percent mainly, according to the Ministry of Agriculture.

National fish production has increased from 120,894 metric tons to 149,299 metric tons, representing a 23.5 percent increase.

The estimates clearly show that most crops in the country will this year experience reduced production, which should translate into low supply and high demand for the crops. Farmers should under normal circumstances have experienced a good year when it comes to prices and resultant incomes.

The reality in Malawi, however, is that it is unscrupulous traders who will benefit from the situation through exploitative commodity trading on the market.

High levels of illiteracy and ignorance amongst the majority of Malawian subsistence farmers means that they are easily abused by traders, largely Malawians but acting for foreign masters, who rush to villages to buy crops from the farmers at low prices, only for them to earn lucratively for the same through speculative local trading and illegal exports.

As if that is not enough, earnings from the exports don’t find their way back into Malawi as there are no systems in place to check against malpractices such as transfer pricing on the part of commodity exporters.

No wonder therefore that the reasonably high volume of non-tobacco agricultural produce in Malawi every year doesn’t translate into meaningful export earnings for the country.

Malawi suffers a double blow as the innocent farmer in the village remains poor while the country is also robbed of its would-have-been foreign exchange.

The government and all leaders in the country, including chiefs, members of Parliament as well as religious and NGO leaders, have a responsibility of taking action that would correct the anomalies in agricultural produce trading in the country to protect both the farmer and the economy from unscrupulous traders.

The farmers need to be sensitised on the benefits of selling their produce through proper markets such as the commodity exchange which ensures that farmers get maximum market prices for their produce.

Where volumes produced by one farmer are too low to make economic sense in transporting them to a nearest commodity exchange warehouse, aggregating through farmer clubs and cooperatives is the solution.

Through groups that facilitate collective marketing of crops, farmers not only reduce transport costs for their crops but also increase their bargaining powers on the market.

All these can, however, only become possible if the government and all local start taking the responsibility of protecting farmers from exploitative commodity traders.

In this day and age when proper and transparent markets are available for agricultural produce, it is unacceptable and a mark of irresponsibility by any leader to let their subjects get robbed in broad-day-light by unscrupulous traders. For once, let us allow our farmers to benefit from their sweat

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