In the wake of low grain prices, delegates to a National Conference on the Future of Grain Markets in Malawi yesterday recommended the structuring of the grain market as is the case with tobacco.
The recommendations come amid controversies on the ban of the exportation of maize while prices on the informal market continue to tumble lower than the government-set farmgate price of K170 per kilogramme (kg) and the main buyer, the State-owned produce trader Agricultural Development and Marketing Corporation (Admarc) is failing to buy the produce from farmers.
At the same time, although other legumes and pulses fetch high prices on the international market, local farmers sell to intermediate buyers at low prices.
A position paper released on the sidelines the conference, organised by the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) and the African Institute for Corporate Citizenship (AICC) held at Chichiri Trade Fair Grounds in Blantyre, also recommended the revamping of the Farmers’ Marketing Board and introduction of the Crops Control Commission.
Reads the paper in part: “Grain marketing in Malawi should be restricted to an auction system that can be established just like in tobacco and upscaling of the warehouse receipt system. The economy and the agriculture sector on which it depends should adequately be protected from external shocks and unscrupulous behaviour.”
AICC acting head of programmes Driana Lwanda said they hope government would take up the recommendations from the conference that brought together government officials, the academia, agricultural civil society organisations and the private sector.
“As a nation, we have to explore how we can penetrate more into the national, regional and global markets. If we had a structured and well governed system, farmers and traders could not have been groaning the way they are doing,” she said.
AHL Commodities Exchange (AHCX) chief economist Ted Nakhumwa said if the grain market was formalised, it could be fetching more than Malawi’s largest foreign exchange earner, tobacco.
“Our projections show that with a formalised and structured market, Malawi would be getting $440 million [about K312 billion] annually, which is more than the $300 million which tobacco has raked in this year.
“Currently, we are earning only $70 million from the legumes as we can neither track nor validate sales, volumes and prices,” he said.
Director of planning in the Ministry of Agriculture, Irrigation and Water Development, Alex Namaona, said apart from grain tracking, it was important to increase value addition and agro-processing to mitigate pricing problems.
“Better markets induce production. The minimum prices we set help guide the market so that farmers are not abused,” he said.
