Commodity prices give farmers raw deal
While traders and other businesspeople continue to benefit from agricultural commodities prices, growers on the eother hand have described the prices as exploitative.
A pigeon peas farmer based in Lirangwe, on the outskirts of Blantyre, Brian Toloya, is one such farmer who is not happy with the current market prices.
Despite the exploitative prices, growers have an opportunity to utilise the country’s commodities exchanges, but that seems not to be the case.
While Toloya has not fully earned enough from the pigeon peas sales, but has been able to sustain his family, the past few years have not been good for him and his family.
“In 2015, I sold my pigeon peas at K1 000 per kilogramme [kg] only to get K600 per kg last year. This time around, I have managed to sell at K250 per kg and I am not happy because I cannot be able to survive the rest of the year with such kind of prices,” said Taloya on Tuesday.
A rice farmer plying his trade in Limbe, McDonald Elayasi, said although his rice is selling at K500 per kg, the price is far below that offered on the market three years ago at K900 per kg.
In an interview on Tuesday, Grain Traders Association of Malawi president Grace Mhango said while most of the commodity prices are being driven by demand on the global market, there is need for authorities to come up with a strategy to counter price fluctuations if local farmers are to get better deals.
“We need to come up with a strategy for price fluctuation as well as price hedges which should be able to help in setting minimum prices above the cost of production. What is happening is that farmers are selling their produce even below their cost of production.
“As a market, we need to have a cost benefit analysis because it is only the welfare of farmers in jeopardy while those who are producing the final products always have their products fetching high prices despite buying the raw materials at very cheap prices,” she said.
In a separate interview, Parliamentary Committee on Agriculture chairperson Joseph ChidantiMalunga said that it is unfortunate that farmers are caught up in situations where they have to sell beyond the production costs.
“Liberalisation of markets aside, there is need to have the regulator to dictate minimum prices and ensure there is a safety check on the commodity pricing. This is also where state enterprises need to come in and assist by buying beyond production cost just to protect these farmers from the market lapses,” he said.
Africa Institute for Corporate Citizenship executive director Felix Lombe argued that while there seems to be a future for the sector, there is need for government intervention.
“We have had strategies that we thought would work but they have not as we are still seeing these price fluctuations in the grain market. We are seeing rising production but declining prices. For instance, pigeon peas production has grown to 400 000 metric tonnes [as of June 2017] from 90 000 MT.
“On the other hand, we have seen steady increase for soya beans from 70 000 MT in 2015 to 200 000 MT as at present. But, the essence of structured markets is not even anywhere near us for most Malawian farmers,” he said.
While acknowledging that use of structured markets for some farmers has not been impressive, Agricultural Commodities Exchange (ACE) training manager ChipiliroKantikana said this has mainly been due to lack of awareness.
He said ACE been engaging farmers on the commodities exchange and pricing issues to woo them to use the exchange.
