Turn maize into forex spinner
Published On May 13, 2015 » 1906 Views» By Davies M.M Chanda » Business, Columns
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Policy analysis1MAIZE, like wheat, can become a big foreign exchange spinner for Zambia if its productivity is enhanced in the country.
Given the rising demand for the grain by some countries in the region and beyond, maize cultivation could just replace the faltering sectors in terms of export value if better handled.
According to Reuters, Zimbabwe plans to import 700,000 tonnes of the staple maize grain to plug a deficit after bad weather affected the crop from the current farming season.
It quotes that country’s Agriculture Minister Joseph Made as saying Zimbabwe had 150,000 tonnes of maize in stock and was looking to import to offset the shortfall.
Zimbabwe requires at least 1.8 million tonnes of maize annually and has over the years relied on imports from neighbouring countries, including Zambia and South Africa, to bridge the gap from local production.
Domestic output is expected to drop by 35 per cent to 950,000 tonnes this year compared with 2014, the United Nations Food and Agriculture Organisation has said.
Some other countries in the region are whetting their appetite for the crop which is a staple food for most people in southern and eastern Africa.
Outside Africa, Portugal has added to the demand and plans to import maize from Zambia to meet the growing demand for grain production in that country. Portugal honorary consul to Zambia, Eric Marques said this week that Zambia was becoming self-sufficient in maize production and was looking at ways of importing some from the southern African country.
Now that is remarkable!
The rising demand of the maize, however, provides an opportunity for the country to cash in on the commodity especially in the long-term, with careful planning and investments.
As I have said before, currently the Food Reserve Agency (FRA)’s major preoccupation is the purchase of the maize and some crops for strategic reserves.
This means that its targets in terms of how much maize to buy per year are always limited.
The situation is compounded by the fact it has limited storage facilities for maize and other crops deemed strategic.
Established under  the Food Reserve Act of April 1995 the FRA aims at becoming an organisation that efficiently manages sustainable National Strategic Food Reserves, ensuring National Food Security and Income through the provision of complementary and high quality marketing and storage services.
But to make business sense, the FRA should do much more and provide bigger market for at least maize.
Its mandate should change from the current one where it is considered the buy of the last resort to the first port of call for farmers.
As the buyer of the last resort, the FRA is only supposed to buy the amount of maize for strategic reserve to replace wasted stock.
For instance from the 2013/14  farming produce, the FRA had only budgeted for 500,000 tonnes of maize and the funds for that had been set aside.
The bumper harvest and the farmers’ continued reliance on the FRA for the provision of the market for, especially, maize could have resulted into most of the crop going to waste.
The private sector, either deliberately or otherwise, did not do much to procure the surplus thereby compelling the government to buy more than double of the planned amounts of maize.
This had its own implications in that the government did not have money in place to pay the farmers on time for the funds for the surplus maize. There is a general feeling that the FRA should be restructured while its mandate should be changed to make it capable to discharge the expected larger responsibility as the provider of the wholesale market for maize and other strategic crops.
Given the fact that the main target for the FRA market are the small scale farmers who benefit from the Farmers Input Support Programme (FISP) it would be logic for the FISP to be allocated to the FRA.
But still, to fully benefit from the rising international demand for maize, there is need to work on the productivity for the crop.
Previously, the FRA has been exporting maize at a loss due to low productivity among the local small scale farmers. For instance in 2011 the agency was exporting the commodity at about US$200 per tonne as compared to the $260 per tonne it purchased the same maize from the farmers.
The Zambian small scale farmers, who are on aggregate the main growers of maize, were and still are producing not more than 2.5 tonnes per hectare compared to an average four-five tonne per hectare recorded in the region.
The potential for maize is as high as eight-10 tonnes per hectare with good management.
Therefore, there is need to invest in raising the maize productivity to these levels as a way of ensuring that its export yields the desired profits.
For comments call: 260 0955 431442, 0977 246099 or email: jmuyanwa@gmail.com.

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