Farmers losing out on maize minimum prices
Retail maize prices declined by six percent to an average of K171 per kilogramme (kg), published International Food Policy Research Institute (IFPRI) figures showed on Tuesday.
In its Malawi Monthly Maize Market Report, IFPRI observes that retail maize prices remained highest in the South and lowest in the North.
Reads the report in part: “By the end of the month, retail maize prices for old maize declined in 13 markets and remained stable in 13 markets. The largest decline was recorded in Mitundu [21 percent].
“Towards the end of the month, prices in the centre remained higher than in the North by K13 per kg and 14 per kg lower than in the South.”
On average, however, IFPRI notes, retail prices of ‘new’ maize were K41 kg lower than for ‘old’ maize during April, K11 per kg lower than the previous month and were also lower than minimum farm gate price for maize (K150/kg) set by the Ministry of Agriculture and Food Security.
This means that for new maize, a kilogramme was selling at an average of K130, translating to K6 500 per 50 kg bag.
Ministry of Agriculture sets minimum farm gate prices for agricultural produce every year in accordance with the Agricultural General Purposes Act 1987 Cap 65.05 of the Laws of Malawi.
The minimum farm gate prices are determined by cost of production, market forces, price trends for the previous years and export parity price.
Consultations are also done with key stakeholders in the Agricultural sector.
However, Farmers Union of Malawi (FUM) president Frighton Njolomole earier indicated that the set farmgate price was low and does not reflect production costs that farmers incurred to produce the crop.
Njolomole said about half million farming households produced their maize without the subsidsed fertiliser, and therefore, K200 per kg would be ideal if farmers were to make profit from maize sells.
He said: “Results from our gross margin analysis indicate that farmers that did not use AIP will be able to breakeven at a price of K170 per kg. Any price that is above K170 per kg will, therefore, enable farmers to make some profits.
“However, considering that gross margin analysis does not include all costs, FUM would like to request government to raise the farmgate price of maize to at least K200 per kg.
“This would also act as a good compensation and incentive to medium and large scale farmers who use more inputs in their production matrix. This will in the long-term help to commercialize maize production.”
Minister of Agriculture Lobin Lowe earlier indicated that it is a wish of the government to see farmers getting rewards of their hardworking and this will only be achieved by a comprehensive enforcement of these minimum farm gate prices.
