Zambia prioritises strategic maize reserves over exports

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Jeff Kapembwa

Lusaka - Zambia will delay maize exports until it has stockpiled 500,000 tonnes of the grain to ensure food security in the country, says Zambia’s Food Reserve Agency (FRA).

Furthermore, FRA has revised the floor price of maize to US$6.20 (ZMW65) per 50-kilogramme bag of maize compared to US$6/per 50kg bag offered last season, sparking an outcry from the stakeholders, who are arguing that the new price does not add value to the sector’s growth.

The Southern African state recorded a 33% shortfall during the 2017/18 season, harvesting 2.4 million tonnes of maize, compared to 3.6 million tonnes in the previous season. The deficit was spurred by erratic rains experienced in the country between November last year and February this year. This was compounded by other climate change effects, including fall armyworms that invaded large parts of the country.

Chairperson of FRA, Joe Simachela, has told The Southern Times that despite several inquiries from other countries in the region seeking to buy maize, Zambia is prioritising stocking strategic reserves when the crop marketing season opens on 1 August this year.

“We have decided to safeguard the maize in view of the deficit and that is why we will not export anything until we have enough stocks in our reserves,” Simachela said.

The agency chose not to exploit the regional frontiers for maize exports despite the competitive exchange estimated between US$167 and US$180 per tonne.

Plans are underway to distribute maize that is in stock to government-inclined institutions, including schools, disaster management and mitigation unit, correctional services and hospitals.

FRA last year bought 517,959 tonnes of white maize and 3,240 tonnes of soya beans. This represented 8% above the targeted 500,000 tonnes, with soya beans 16% above target for the first time since the 2007/8 season.

No paddy rice was purchased last season.

Remarkable purchase of maize, representing 46% was recorded in eastern Zambia, on the border with Malawi and Mozambique, while the southern part, on the border with Zimbabwe, experienced the reverse of what transpired in the 2016 season.

The 2017/18 crop survey shows that maize production amounted to 2.394 million tonnes, 43,063 tonnes of paddy rice and 302,720 tonnes of soya beans, prompting FRA to subsidise maize supplies to selected institutions that would, in turn, assist in meeting food shortfalls in case of insecurity.

The outturn was attributed to the export window market prospects in Malawi and Zimbabwe. This forced the demand for Zambian maize to increase and swung to East Africa, chiefly Kenya, which received the largest share of 100,000 tonnes exported.

Budgetary constraints buffeting FRA have forced it to restrict itself to buying a maximum of 500,000 tonnes of maize for national strategic reserves to be undertaken in outlying areas.

The private sector, millers included, will also venture into the market and secure and stockpile their own maize unlike in the past where they relied on subsidized maize from the agency.

“FRA wants the private sector to fill in the gap in both the areas that will be left out as well as purchasing excess stocks that will not be accommodated in the FRA budget provision,” Simachela stated.

During the 2018 crop-marketing season, the agency plans to maintain and operate on 796 satellite depots as was the case in 2017.  The private sector, millers included, has been urged to venture into the market and purchase the crop to make the selling price competitive unlike previously when they secured the grain at subsidized prices.

However, the review of the minimum floor price for a 50kg bag of maize has raised concern among various stakeholders. The leading farming group, Zambia National Farmers Union (ZNFU) has described the decision as ‘horrendous’ and lacking merit, given the cost of production.

ZNFU is proposing a revision averaging ZMW80.00 (US$8 for a 50kg bag) for real returns.

Stakeholders, including the Small Scale Farmers Development, Consumer Unity and Trust Society and the Indaba Agricultural Policy Research Institute, are crying foul over the offer, which they say is too low to drive the sector’s growth.

 

They have urged the government to maintain policy consistency to motivate the private sector participating in maize marketing when the government opens maize exports.

 

“The union finds the K65 per 50kg market price offered by the Food Reserve Agency (FRA) absurd and horrendously low and, in response to this, we call for untampered functioning of market conditions and open borders,” Jervis Zimba, the ZNFU leader has said.

 

The government was urged to sustain growth in the sector and bolster the export of agricultural commodities and that with the food balance sheet figures, a surplus of 341,313 tonnes could potentially be exported.

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