MDC says new maize price is a prescription for disaster


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The Movement for Democratic Change today said the new maize and sorghum price set by the government at US$390 a tonne is a prescription for disaster because it will be cheaper for traders to import cheaper grain from the region rather than to buy locally.

The party said, besides, Zimbabwe was the only country in the region with a grain deficit. All other states had surpluses with Zambia holding stocks in excess of two years of consumption.

Prices in these countries were also way below the new price set by the government, the party said, adding that the government must allow local farmers to use genetically modified seed.

“So long as the Zimbabwe government continues to deny Zimbabwean farmers security of tenure acceptable as security for bank financing, and continues to undermine land prices through its arbitrary and politically motivated land invasions, farmers will be unable to finance their activities on a sustainable basis,” the MDC said in a statement.

“These problems are compounded by the continued failure of government to get to grips with the ongoing banking crisis associated with the near total absence of liquidity. These fundamental problems are compounded by the refusal of the State to allow new GMO crop varieties to be provided to Zimbabwean farmers so that they can compete with their regional counterparts.

“The consequences of this ill advised action by Government are far reaching – the State does not have the money to buy the crop at these inflated prices and the private sector will not be able to do so without running the risk of buying stocks that are overpriced. This means that the maize that remains on farms will not be sold this winter compounding their difficulties in financing the next crop.”

Zimbabwe does not allow genetically modified foods in the country but they have been getting into the country somehow.

 

Full statement:

 

Thursday, 21 August 2014

 Statement on the new regulations controlling the marketing of grain in Zimbabwe

 

On Friday the 15th August 2014, the Ministry of Agriculture through the Agricultural Marketing Authority issued regulations that seek to control the price at which traders will buy Maize and Sorghum in Zimbabwe. The price of both products was set at US$390 per tonne.

No restrictions were placed on the importation of grain based products which will continue to be freely available on local markets at market prices. In addition the new regulations override contracts between growers and end users that have already been concluded and those that cover production in 2013/14 season.

It must be noted that all regional States except Zimbabwe have significant surpluses with Zambia holding stocks in excess of two years consumption. Prices in these regional markets are well below the price established in the new regulations. Zimbabwe continues to import half its domestic needs for maize and all its needs for wheat.

So long as the Zimbabwe government continues to deny Zimbabwean farmers security of tenure acceptable as security for bank financing, and continues to undermine land prices through its arbitrary and politically motivated land invasions, farmers will be unable to finance their activities on a sustainable basis.

These problems are compounded by the continued failure of government to get to grips with the ongoing banking crisis associated with the near total absence of liquidity. These fundamental problems are compounded by the refusal of the State to allow new GMO crop varieties to be provided to Zimbabwean farmers so that they can compete with their regional counterparts.

The consequences of this ill advised action by Government are far reaching – the State does not have the money to buy the crop at these inflated prices and the private sector will not be able to do so without running the risk of buying stocks that are overpriced. This means that the maize that remains on farms will not be sold this winter compounding their difficulties in financing the next crop.

In addition, the regulations create an almost impossible situation for the country's grain traders and millers and it is likely that they will lose the market share to imports of finished products from neighboring States. For consumers, the news is equally dire, they will face higher prices and disrupted supplies for the most basic foods that they need on a daily basis.

For the past two decades Zimbabwe has been in the grip of a national crisis in its agriculture industry. These new regulations confirm that the present administration simply does not have any idea as to what to do about resolving our deep seated economic problems. Reckless measures that seek to solve the viability problems of farmers locked in a no win situation on farms they cannot operate, will simply compound our problems. Zimbabwe deserves better.

 

Information and Publicity Department

Movement for Democratic Change

Harvest House

Harare

(49 VIEWS)

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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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