Create price stabilisation fund to contain maize pricing volatility – EAZ

stabilisation

The Economic Association of Zambia (EAZ) has called on government to create an agricultural stabilisation fund to contain maize pricing volatility. This is as the Policy Monitoring and Research Centre (PMRC) recommended a slew of measures for de-regulation of the maize market.

EAZ President Chrispin Mphuka said the creation of a price stabilisation fund will act as a relief for farmers when grain prices fall. “Price variations will always be there in the agricultural sector due to market fundamentals, and the long-term solution is the proposed fund which will help to modulate prices,” Dr Mphuka said.

Zambia this year recorded a bumper harvest of 3.6 million tons but the prices for the crop have dipped due to higher production in the Southern African region. The Food Reserve Agency (FRA) provoked national outrage among farmers and stakeholders when it announced that it will buy white maize at K60/50kg.

So incensed are the farmers that the Zambia National Farmers Union (ZNFU) has urged producers to hold back their crop whose prices was reported to have dropped as low as K35/50kg.

Meanwhile PMRC executive director Bernadette Deka says government should consider controlling how much is produced to prevent the current situation where the price dropped below the equilibrium. “Government can give out production rights or pay people not to produce as a way of controlling how much is produced,” said Deka in a statement issued in Lusaka today.

According to Deka, it is also prudent for government to re-direct resources from FRA to other key drivers of growth in the agricultural sector, including livestock and fisheries production. “These measures should ultimately lead to de-regulation of the maize market, and save government resources that can be re-directed to other agricultural sectors,” Deka said.

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