Traders cash in on Admarc delay

Unscrupulous traders continue to cash in on maize trade following the delay by State produce trader Admarc to start buying the staple grain from farmers four months after harvest.

The development has riled agriculture stakeholders, including Farmers Union of Malawi (FUM), who argue that the situation is putting farmers at a disadvantage.

FUM president Alfred Kapichira Banda, in an interview on Tuesday, said it is unfortunate that Agricultural Development and Marketing Corporation (Admarc) is failing to buy maize in time, a situation that has given an advantage to unscrupulous traders to exploit the situation to their advantage.

But Treasury spokesperson Davis Sado, in an interview on Tuesday, said money for buying maize is factored into the K511.2 billion three-months provisional budget and will be disbursed soon.

Admarc spokesperson Agness Ndovi said preparations to start buying maize are underway, she added that Admarc wants to buy maize with the right moisture content.

But Kapichira Banda said in the absence of Admarc, farmers have been selling their produce at as low as K100 per kilogramme (kg) or K5 000 per 50kg bag, which is K2 500 shy of government’s recommended minimum price at K7 500 per 50kg bag.

He said it is sad that government seems to be watching while farmers are being duped, observing that by the time Admarc enters the market, most of the crop will have been sold to intermediate buyers.

“It is unfortunate that up to now Admarc has not opened its markets yet. We are crying because we are not finding returns from maize farming.

“If you add the cost of labour, inputs and equipment, you will see that prices we are getting from the vendors mean nothing to us,” he said.

While disowning the traders, Grain Traders and Processors Association of Malawi president Grace Mhango faulted the market structure for the prevailing low prices.

“It is true traders are buying at these prices, but they are not under our association. These are small traders who pay farmers low prices and they will soon sell to our traders at higher prices. 

“This is the dilemma with our market structure.  So, farmers will get low prices and the middlemen will get a lion’s share,” she said.

Agriculture expert Tamani Nkhono-Mvula observed that delay in opening markets means many smallholder farmers are not able to sell their produce at Admarc as is supposed to be the case, thereby transferring gains accrued to middlemen.

“If Admarc is given enough resources, in time they should be able to open the markets at least by May.

 “This means that Admarc will be able to enforce minimum prices which will make vendors offer more than the minimum prices,” he said.

National Smallholder Farmers Association of Malawi (Nasfam) chief executive officer Betty Chinyamunyamu said government must do more than just announce minimum prices to enable  smallholder farmers profit from their sweat.

“Government announced minimum prices at the begining of the marketing season. The process could have been enforced by Admarc coming in to buy in a timely manner,” she said.

In a written response on Tuesday, Admarc’s Ndovi said when Admarc buys the maize, it is stored for a long time until the next lean period, unlike vendors who buy maize and dispose it off immediately.

“When maize is bought with high moisture content, it discolours and gets rotten by the time we open the markets.

“We will soon publicise the maize purchases procedures for 2018/19 season,” she said.

Ndovi was non-committal on the amount of maize that the State grain trader intends to buy.

Maize, as part of the food component, impacts the country’s economy given that it constitutes 45.2 percent in the Consumer Price Index (CPI).

According to the Draft 2018/19 Mid-Year Budget, Treasury revised downward allocation made to maize purchase from K20 billion to K10 billion.

Last year, Admarc started buying maize in mid-August. This year’s maize surplus was estimated at 355 000 metric tonnes (MT) out of a total output of 3.3 million MT.