Maize farmers risk losing between K40 billion and K48 billion in sales revenue if State grain agencies continue to leave them to vendors’ exploitative K500 per kilogramme (kg) buying price, instead of the recommended K900 per kg.
This is because Treasury is yet to release at least K120 billion to National Food Reserve Agency (NFRA) and Agricultural Development and Marketing Corporation (Admarc)—with each allocated K60 billion—to purchase between 100 000 metric tonnes (MT) and 120 000MT.
If funded, Admarc and NFRA would purchase the maize at not less than K900 per kg, which is K400 higher than what vendors filling the vacuum since harvests started in March this year are offering farmers desperate for buyers.
Three weeks after Treasury spokesperson Williams Banda signalled government’s readiness to initiate funding processes, NFRA and Admarc are yet to enter the market.
In separate interviews yesterday, agriculture policy experts and farmers representative warned that the delay is also threatening commercial agriculture, restocking of strategic grain reserves and future food security.
Agriculture policy expert Tamani Nkhono-Mvula said prolonged delays risk undermining efforts to transform maize from a subsistence crop into a commercially viable enterprise.
meeting: Mbilizi. | Nation
“While low prices may not immediately reduce total maize production because many smallholder farmers grow maize mainly for household consumption, the situation could undermine efforts to commercialise maize production,” he said.
Nkhono-Mvula said many farmers currently selling the grain at depressed prices are doing so out of desperation rather than market choice.
“They are selling because they are under a crisis where they need immediate resources at household level. At the end of the day, that is going to lead to poverty and food insecurity,” he said.
National Association of Smallholder Farmers in Malawi (Nasfam) chief executive officer Betty Chinyamunyamu echoed the concerns, saying that traders buying maize below the gazetted minimum price are exploiting vulnerable farmers while undermining future production.
“When traders buy maize at prices far below the minimum price, such as the reported K500 per kilogramme against the gazetted K900, they are not only undermining the law but also exploiting vulnerable farmers,” she said.
Chinyamunyamu said prevailing prices in some areas are below production costs, leaving farmers unable to recover investments or finance the next growing season.
“Any farmer selling at that price will struggle to recover production costs, let alone generate enough revenue to reinvest in the next farming season,” she said.
Chinyamunyamu warned that sustained low prices could force some farmers to reduce cultivated land, cut fertiliser and improved seed use or abandon maize production altogether.
Minister of Agriculture, Irrigation and Water Development Roza Mbilizi was not available for comment as she said she was in a meeting while government spokesperson Shadric Namalomba could not be reached.
The Nation sought clarification on the delayed entry of NFRA and Admarc into the maize market despite earlier assurances, enforcement measures against traders buying below approved farmgate prices and the possible implications for food security, strategic reserves, future maize production and pressure on scarce foreign exchange reserves.
A fortnight ago, NFRA chief executive officer Bruce Munthali said the agency intends to increase maize stocks from 82 000MT to 150 000MT to strengthen national food security.
“We want to make sure that food is affordable. We will work on bringing down food-driven inflation,” he said.
But in a separate interview at the time, Admarc board chairperson Gray Nyandule Phiri acknowledged that procurement remains tied to funding availability.
Admarc is targeting purchases of about 40 000MT of maize and rice this season.
Meanwhile, Grain Traders Association of Malawi president Grace Mijiga-Mhango has urged the two State agencies to move quickly to shield farmers from exploitative pricing.
The stakes are high for a country where maize remains the dominant staple and backbone of household food security.
Reserve Bank of Malawi projections put this season’s maize harvest at about 3.3 million MT, up from 2.9 million MT last year, but still below the estimated national requirement of 3.5 million MT.
The anticipated production rebound follows relatively favourable growing conditions after seasons disrupted by weather shocks and food shortages that forced government to import maize last year.
