The Auction Holdings Commodities Exchange (AHCX) yesterday started buying maize from small-scale farmers following a series of meetings with the National Food Reserve Agency (NFRA) and the Ministry of Agriculture.
AHCX, which has been contracted by NFRA, is supposed to buy and deliver 32 000 metric tonnes (MT) white non-GMO maize to NFRA storage facilities.
NFRA and the Agricultural Development and Marketing Corporation (Admarc) received K5 billion each from Treasury to buy a combined 67 000 MT of maize from early July, but the process delayed.
However, in an interview yesterday, AHCX research and communications manager Mark Ndipita said they will start with small-scale farmers, who will start bookings and deliveries to warehouses by next Thursday.
“The maize will be procured at a fixed gross price of K150 per kilogramme (kg), but three percent withholding tax will be deducted. AHCX will make payments for all maize within five working days after delivery through registered bank accounts of the clients.
“Maize will be purchased from small-scale farmers and traders through Expressions of Interest while the farmers through bookings which will commence this Friday and deliveries of the actual maize into warehouses by the farmer will start Thursday next week, meaning that farmers will book from Friday this week up to Wednesday next week, and by Thursday deliveries will start,” he said.
The warehouses are in Luchenza, Mzuzu, Lilongwe, Blantyre, Balaka, Lilongwe and Mzimba.
Ndipita said the Internal Procurement Committee (IPC) will release the list of traders that will be awarded contracts to supply maize on Friday next week and deliveries for the traders will begin the other week.
Admarc publicist Agnes Chikoko was yet to respond to our questionnaire sent on Tuesday, asking why the parastatal is yet to buy maize.
Minister of Agriculture, Irrigation and Water Development Joseph Mwanamvekha, in June, confirmed that Treasury had released K10 billion to State produce trader Admarc and NFRA to buy maize.
On Tuesday, he warned that his ministry will write Admarc a strong letter on the delay.
“Admarc already received the money. There is actually no explanation from us on the delay. We are actually writing them a strong letter on the same. We are discussing the same matter on how to proceed,” said Mwanamvekha.
Over the years, there have been concerns by farmers that the delays by NFRA to procure buy maize result in increased post-harvest losses.
Farmers also fear that unscrupulous commodity vendors take advantage of the delays by offering farmers poor prices.
As a result, government directed AHCX—which provides an organised market system through which a warehouse receipt system enables farmers to access quick cash while waiting for prices to improve—to purchase the maize on behalf of NFRA.
According to the second-round Agricultural Production Estimate Survey, maize production is estimated to have declined by 19.4 percent to 2.8 million MT this year from 3.5 million MT last growing season.