Govt raises minimum farmgate prices
Ministry of Agriculture has raised farmgate prices for the 2022/23 produce marketing season with maize selling at K500 per kilogramme (kg) from K250 last season representing a 100 percent increase.
In a statement yesterday, Ministry of Agriculture Principal Secretary Dick Kampani said polished rice will be selling at K1 000 per kg, soya beans at K800 per kg, pigeon peas at K550 per kg, pure beans at K700 per kg and cotton at K580 per kg.
Last year, the farmgate price for rice was K700 per kg while pigeon peas went at K500 per kg and cotton at K580 per kg.
Kampani said traders seeking to buy the strategic crops will have to apply for a buying licence and have their weights and measures assigned and certified by the Malawi Bureau of Standards (MBS).
He said: “All agro-dealers, agro-processors and others who deal with commodities are requested to buy the stated crop commodities at prices not less than those stipulated.”
Reacting to the new prices yesterday in an i n t e r view, National Smallholder Farmers Association of Malawi (Nasfam) chief executive officer Bettie Chinyamunyamu said government has struck a balance in setting the prices in consideration of the rising cost of farm inputs and affordability.
She said: “This is a catch- 22-situation. If you consider maize, there was high cost of production to high fertiliser prices, which would attract high farmgate prices.
“But in Malawi, 90 percent of farmers also buy maize later in the season. So, high prices would mean a lot of suffering for most farmers in the lean season.”
However, Chinyamunyamu said it would be difficult to bring down prices in areas where produce, especially maize, is already selling above the recommended prices.
A snap survey by The Nation this week found that in some areas in the Southern Region, freshly harvested maize is selling at between K700 per kg and K1 200 per kg while beans prices averaged K1 500 per kg. Rice is fetching an average of K1 500 per kg and soya beans are selling at an average of K900 per kg.
In a separate interview, Grain Traders Association of Malawi president Grace Mijiga Mhango observed that although the prices are below the prevailing market ones, chances are they could get back to the recommended ones as the harvest season peaks.
She further observed that the cost of production for soya beans is much higher than that of maize; hence, there is need for the farm gate price of soya beans to be revised.
“We need to balance realistic prices based on cost-benefit analysis. For balancing inflation, we needed to have such prices and not according to market forces,” said Mijiga Mhango.
Consumers Association of Malawi executive director John Kapito said the current prices were fair considering the market situation.
He said: “We hope to see the same reflected on the market as fresh maize starts filling the produce markets.”
However, Kapito urged government to ensure that State produce trader the Agricultural Development and Marketing Corporation (Admarc) enters the market in good time to avoid having a lot of stock held by private traders.
This year, maize prices have escalated by over 200 percent with a 50 kg bag of maize selling at an average of K42 000 while government sells the same at K15 000.
The farm gate prices are based on the cost of production, market forces and price trends for the previous years and the need to provide incentives to growers.
Ministry of Agriculture is mandated by law to set minimum farm gate prices for crops grown in Malawi.
The exercise is in line with the Agricultural General Purposes Act 1987 Cap 65.05 of the Laws of Malawi.
