The National Food Reserve Agency (NFRA) has justified its decision to buy maize at below government set minimum, saying most of the traders bringing maize bought it from farmers at lower prices.
NFRA chief executive officer Nasinuku Saukira and his team gave the explanation in Lilongwe yesterday when they appeared before Parliament’s Committee on Commissions, Statutory Corporations and State Enterprises to give an update on maize purchases for the Strategic Grain Reserves (SGRs).
Committee member Alex Major queried NFRA on the K130 per kilogramme (kg) price it is offering the traders when Ministry of Agriculture, Irrigation and Water Development set price was K170 per kg.
In response, Saukira said the NFRA board arrived at the price of K130 per kg or K130 000 per metric tonne after taking into consideration the source of the maize on offer as well as value for money, especially against the background that half of the funding from maize purchases came from donors.
He said the K170 per kg set price was merely a guideline as government expected those buying maize to offer this price to State producer trader, the Agricultural Development and Marketing Corporation (Admarc).
Said Saukira: “It was expected that Admarc, as a government institution, would offer K170 per kg. But on our part, it was clear that 80 percent of those selling to us would be vendors who did not buy the maize from farmers at K170 per kg, but K60 or thereabouts. At the same time, AfDB [the African Development Bank] were looking for value for money of the maize purchases using their funds.”
He said the K130 per kg was meant “to reward the farmers and not the vendor who ripped them off”.
However, the committee demanded evidence of communication where the decision to opt for K130 per kg was made.
Currently, the stock balance in the SGRs stands at 104 444 metric tonnes (MT) purchased with K5.4 billion from the AfDB while the Malawi Government is yet to release K5.1 billion to bring the purchases to 200 000MT.
NFRA opened the market at its SGRs at Kazomba in Mzimba in the Northern Region, Mangochi, Limbe and Bangula in Nsanje in the Southern Region to lessen the pressure at Kanengo silos in Lilongwe in the Central Region.
Further explained Saukira: “The challenge we met this year was that NFRA was the only credible maize buyer and there was so much traffic. We have been offloading 1 700 metric tonnes a day which is double what we would offload last year, but people are still not satisfied.”
He also justified the decision to open the selling to everyone, abandoning the tender system.
Saukira said the open procurement, which meant one price for all sellers, was arrived at in reaction to the reality that there was a lot of maize on the market.
NFRA is a government agency established in 1999 to manage and maintain the SGRs. n