Commentary 25th April -1st May, 09

As the harvest season for the 2009 agricultural season commences, the Food Reserve Agency must quickly move into all outskirts of the country to purchase maize from peasant farmers. There is widespread news that most farmers have started selling maize at the fraction of the real market price out of desperation. If this process is not arrested quickly, we will create an environment of winners and losers.

Maize production is the most critical resource at the centre of poverty alleviation in Zambia. As the World Bank recently observed, the marketing of maize in Zambia is not efficient and will need the strong arm of government to ensure rural farmers receive a full reward for their efforts. The rural farmers are the target of exploitation by business people due to information asymmetry in that only the privileged few have access to full market information. It is on this basis farmers sell their produce at give-away prices such that at the end of the day, the source of empowerment becomes a perpetual curse for rural areas.

Poverty in rural areas is significantly high and most households are desperate for incomes. Most of them are in a hurry to find cash in order to educate their children. But the consequences of sailing maize cheaply are many. First, food security is significantly endangered. Second, the rural farmers will never invest in agriculture using self-generated incomes from agriculture. Unless agriculture becomes an enterprise that pays, rural areas will remain underdeveloped.

For this reason, the government will keep on committing huge amounts of resources subsidizing farmers through the Fertilizer Support Programme. A country never grows if agriculture fails to sustain itself for long periods of time.

Forth, the maize purchased by unscrupulous traders will be exported before the food reserves have been fully ascertained. This becomes national food insecurity. The solution for now is for government to immediately release money to the FRA so that the exercise of purchasing maize from farmers commences immediately. For now, it is very difficult for farmers to resist the temptation of offloading their produce at below-cost price if the government does not intervene by offering them a better marketing alternative.