The Indaba Research Agriculture Policy Institute (IAPRI) has called on Zambia’s Food Reserve Agency to sell maize directly to consumers instead of millers, to stabilise maize prices.
FRA should make maize grain available to non-traditional markets at market prices rather than large-scale millers.
“FRA should increase sales directly to consumers and hammer mill operators,” says IAPRI in its latest report titled ‘Rising maize grain, mealie-meal prices and government response’.
The institute believes this would relieve pressure on low income consumers.
Zambia is experiencing rising mealie-meal prices, with white mealie-meal being sold at around ZMK130 for 25 kg and ZMK90 for yellow meal.
Government recently intervened by negotiating with the Grain Traders Association of Zambia (GTAZ) to put 245,000 tonnes of maize on the market. The deal is expected to reduce prices to ZMK85 per 25kg for white and ZMK65 for yellow meal.
The institute believes the stabilising of prices lies in harnessing market based solutions, rather than paying subsidies to millers, or imposing blanket export restrictions.
“It not only leads to loss of government revenue and much needed foreign exchange, but might also result in food insecurity as informal transactions largely go unabated and maize stock subsequently dwindle,” warns the report.
Zambia currently has more than 700,000t of grain in reserve. 290,000t is held by the Food Reserve Agency (FRA) with the remainder in the hands of private grain traders.