Maize and soya bean farmers sold their crops below the government recommended farm-gate minimum prices of K200 per kilogramme (kg) and K300 per kg respectively, a new study shows.
The October 2020 International Food Policy Research Institute (Ifpri) study shows that about 75 percent of maize farmers and 90 percent of soya bean farmers sold their crops below the minimum farm-gate prices.
The study said this is despite that over 60 percent of maize and soya bean farmers were aware of the official minimum farm-gate prices.
Reads the study report in part: “These findings point to a widespread lack of awareness and enforcement of minimum farm-gate prices, and therefore, their limited usefulness in raising prices farmers receive for their crops.
“Rather than calling for stricter enforcement of minimum prices, we suggest encouraging greater competition at all levels of the market chain. This can be a more effective way to ensure that farmers get better prices.”
Ifpri figures show that for maize, the average price was K152 per kg with reported prices ranging between K50 per kg and K280 per kg.
For soya bean, the average price was K231 per kg, with reported prices ranging between K80 per kg and K400 per kg.
The results of this study are in line with findings from an earlier crowdsourcing study for pigeon peas and chick peas in the Southern Region between August and October 2019.
The study also confirmed that official minimum farm-gate prices are not enforced and are ineffective in guaranteeing minimum prices to farmers.
Minister of Agriculture Lobin Lowe said in an interview yesterday that since Agricultural Development and Marketing Corporation (Admarc) was crippled, vendors have been taking advantage of the situation to buy produce at below recommended prices.
He said his ministry is working on revamping Admarc to ensure that it buys farm produce in good time.
On his part, agricultural analyst Tamani Nkhono-Mvula said in an interview on Monday that although government sets minimum prices every year as an indicative threshold where the farmers can break even, without a practical enforcement mechanism these minimum prices are not necessary.
He said: “The minimum prices that the government sets give an average production cost after calculating the gross margins for each crop.
“The assumption, therefore, was that the average production cost for maize for 2019/2020 season was K200 per kg. At the end of the day, it is the producers, the smallholder farmers who are at the receiving end and are losers.”
Farmers Union of Malawi also earlier observed that on paper, the prices are higher than those offered on the market, but insisted that protection is needed to ensure that farmers benefit.
Farm gate minimum prices are usually calculated based on gross margin analysis that shows how much a farmer has invested versus what will be the likely benefit. n