State produce trader Agricultural Development and Marketing Corporation (Admarc) says it is hopeful of meeting its target to buy about 300 000 metric tonnes (MT) of the staple grain, maize.
In a written response to a questionnaire on Wednesday last week, Admarc public relations officer Agnes Chikoko said to date the parastatal has spent K9 885 555 for purchasing about 60 000 MT of maize.
She said: “Purchases are progressing well and we are optimistic that we will be able to meet our target of 300 000MT.”
Admarc plans to spend K62 billion for the maize purchases. The parastatal received K12 billion subvention from Treasury and secured a K50 billion commercial loan to meet its budget.
However, in the course of buying maize, Admarc continues to face several challenges, including alleged corruption by some of its staff across their depots who demand bribes to favour certain individuals.
While acknowledging some of the challenges in the current maize purchase exercise, Chikoko said Admarc has engaged the Anti-Corruption Bureau (ACB) and police to bring to book perpetrators of the malpractices.
She said Admarc has been floating warning messages in both national and community radio stations, informing the public to report all forms of corruption through ACB’s toll-free line.
Besides the ACB, Chikoko said the public was also being encouraged to use Admarc’s toll-free line to report any corrupt practices as well as reporting to nearest police stations.
But our efforts to check on how many Admarc officials have so far been arrested proved futile as National Police spokesperson James Kadadzera did not pick up our calls on numerous attempts.
Admarc started buying maize on August 2 2021 at K150 per kilogramme (kg) from farmers who had one to 40 bags weighing 50 kg each before accommodating those with at least 41 to 100 bags from August 16.
Thereafter, Admarc started buying maize from farmers with between up to 200 bags from August 29 to September 11.
Farmers with over 200 bags are scheduled to start selling their maize to Admarc from today.
In an interview on Saturday, Lilongwe University of Agriculture and Natural Resources (Luanar) agriculture economist Horace Phiri said there is need for Admarc to sell the maize at a higher price to recover costs being incurred.
He said: “Admarc is incurring several costs in purchasing maize from farmers. These include the purchase price, personnel and administrative costs and transportation.
“For the corporation to cover its costs [break even], they need to sell at a price that is higher than the summation of these costs plus interest on borrowed funds.”
Phiri said the current purchase price of K150 per kg is higher than the average retail price of maize on retail markets which means selling on the domestic market will result in loses.
In a separate interview, Civil Society Agriculture Network (CisaNet) executive director Pamela Kuwali said there is need for alternative approaches to maize procurement other than through Admarc.
She said one of the possible alternatives could be through agreements with existing farmer groups or organisations that are already on the ground and are working with farmers.
Kuwali said: “CisaNet also appreciates the fact that Admarc was earmarked to be part of the Public Sector Reforms to improve its operations and financial performance which led to the development of the ambitious Admarc strategic plan, even though most of the planned reforms are yet to be implemented.
“CisaNet would, therefore, like to ask government to act swiftly on a robust plan to ensure that Admarc effectively performs its market function.”
She said CisaNet will continue to hold government to account on its commitment to facilitate Admarc reforms to improve market efficiency and profitability for farmer’s benefit.
On his part, agriculture policy expert Tamani Nkhono-Mvula, said: “It is unfortunate that Admarc sets huge targets when they seem not to have a good plan in place in terms of maize procurement.
“I don’t think it would make sense that while their target is 300 000 MT, in the month of September, only manage to buy 60 000 MT.”
Last month, Admarc general manager Rhino Chiphiko told the Parliamentary Committee on Agriculture that the organisation’s potential to perform is being hampered by commercial bank loans.
He said Admarc is directed to acquire expensive loans based on collateral agreement whereby all maize that is bought belongs to banks.
Chiphiko stressed that there is need to implement a turnaround strategy to enable Admarc venture into milling, cooking oil production, value adding for cotton, production of feed for livestock and other investments. He said the organisation needs about K410 billion for that.
Admarc was established in 1971 as a statutory corporation with two main portfolios agricultural development and marketing (buying and selling of smallholder produce).