Admarc storm far from over

In January this year, government promised a new restructured Agricultural Development and Marketing Corporation (Admarc), but to date, the State produce trader remains in debt with no staff and funding to it deliver its mandate.

Briefing Parliamentary Committee on Agriculture on Thursday, Admarc acting general manager Ethel Zilirakhasu said the parastatal is in a K13 billion debt, with no indication that Treasury will soon inject the funding needed to settle the debt and even purchase produce from farmers.

She told the committee that Admarc had asked for K40 billion for its recapitalisation, but government only allocated K4 billion in the 2023/24 National Budget.

But even that drastically reduced allocation, government has only released K1.5 billion and instructed Admarc to use the money to pay salary arrears.

Said Zilirakhasu: “Government disbursed K1.5 billion out of the K4 billion to Admarc Limited on May 5 2023, which went towards payment of salaries arrears for February to April 2023.”

She said Admarc is waiting for the remaining K2.5 billion to carry out its operations, but stressed that with financial support, the parastatal has the potential to bounce back.

Zilirakhasu said Admarc has  since June 1 been purchasing produce such as groundnuts and rice using funds carried over from last year’s allocation.

She said: “Admarc started buying crops on June 1 2023. There was K1.85 billion carried over from the K2.5 billion that the institution received in the 2022-23 National Budget allocation.

“However the institution faced challenges of moisture content and high farm gate prices especially for soya beans.”

According to Zilirakhasu, Admarc planned to buy beans, soya beans, rice and groundnuts, but has only bought 250 metric tonnes (MT) of rice at K162.4 million and 20MT of groundnuts at K18.4 million.

Chipping in, Admarc head of finance Chrissy Nyirenda bemoaned that the corporation has a K13 billion debt which is affecting efforts to implement its business plan.

She said government needs to help the institution in settling the debt and recapitalising it to get back on its feet.

“If government can support us by paying off this debt and let Admarc operate as a business, that will help us,” said Nyirenda.

The Admarc officials further expressed ignorance of a recent claim by Ministry of Agriculture Principal Secretary Dickxie Kampani that the parastatal was pushing for K16 billion funding to carry out purchases of crops for commercial purposes.

“About the K16 billion, I will be honest, we are not aware of that. We haven’t put any request to [the Ministry of] Agriculture on the issue of K16 billion,” said Nyirenda.

But Zilirakhasu said Admarc is still hopeful that the ministry will assign the parastatal to buy maize for the Strategic Grain Reserves (SGR).

In response, committee chairperson Sameer Suleman has since lashed out government for its lack of commitment to fund the institution, describing the move as tantamount to shutting Admarc down.

“Government should have just said we are shutting down Admarc completely,” he said.

Suleman expressed sadness that Admarc has infrastructure nationwide to go commercial and boost the economy, but it is being wasted.

In the 2023/24 National Budget, government allocated Admarc K6 billion for restructuring and K4 billion for recapitalisation.

Government also retrenched Admarc staff early this year as part of the restructuring process.

In a January 30 2023 circular to the 4 000-plus employees, Zilirakhasu said the company was implementing a 100 percent retrenchment and the last working day for all staff was January 31 2023.

Admarc is one of the parastatals that have been struggling financially. Over the years it has failed to serve Malawians as per its mandate as a produce price stabiliser and ready market for farmers. The parastatals has also failed to perform its social function as government’s food security apparatus.

In September 2022, Ministry of Agriculture closed Admarc and sent its entire staff on paid leave to pave the way for restructuring. However, it continued to perform some social services with selected staff members.