With the first crop estimates showing maize output this year expected to jump by 35.9 percent to 3.2 million metric tonnes from last year’s 2.3 million, the Civil Society Agriculture Network (Cisanet) has advised the Agriculture Development and Marketing Corporation (Admarc) to accept reality and sale the maize in its depots at a loss or risk losing more by holding it.
In reaction to the hunger situation said to have affected 6.5 million people in the country, Admarc last year borrowed K22.4 billion for maize purchase of about 100 000 Metric Tonnes to sell in its markets.
Responding to an emailed questionnaire, Cisanet executive director Tamani Nkhono-Mvula said Admarc has to negotiate with government on reducing the maize price because if the maize is not sold this year, there are high chances it may not be sold next year as the harvest this year looks promising.
Nkhono-Mvula further added that the implication of continuing to sell the maize at higher price at Admarc when vendors have reduced the prices is that they will have a large carry over stock which will end up being too expensive to maintain.
Admarc is selling its maize at K12500 for a bag of 50 kilogrammes while vendors are selling the same at prices ranging between K10 000 and K9000.
Said Nkhono-Mvula: “Additionally if this maize is kept up to next year, the cost of keeping it will be too high, adding to the loss. Admarc has to also negotiate with the likes of World Food Programme (WFP) that are distributing relief maize so that they buy out the maize.”
He added that from what has happened this year, Admarc must
learn its lesson and begin to diversify in terms of its products.
“It must not only be a buying and selling entity of farm produce but also process them. In this case, Admarc could have processed this remaining maize into animal feed, corn flakes and other products which could have been sold or exported,” he said.
Nkhono-Mvula spoke of the need for the country to rework and rethink on methodologies used by Malawi Vulnerability Assessment Committee (Mvac) in doing crop estimates saying policy makers were highly misled last year.
“The supply of maize on the market has taken most of us by surprise because looking at the Mvac figures we were expecting the worse and it seems the decision to borrow money and import maize was made before making a thorough assessment of the available maize with the traders or even their ability to import.
The consequence will be too high if Admarc default payment of the loan beyond
redemption. Unfortunately it will be tax payers footing the bill as government made a guarantee for the loan, for Admarc to borrow,” he added.
Admarc was not immediately available to comment as its spokesperson Agnes Chikoko kept giving excuses.
But a visit to some of the Admarc depots in Blantyre reveals that the depots are now just operating as storehouses as no selling of maize is taking place.