Malawi will this year use the AHL Commodities Exchange (AHCX) to purchase maize from farmers to beat challenges that were faced last year.
Officials from the State grain reserve, National Food Reserve Agency (NFRA) and AHCX told the media in Lilongwe on Wednesday that AHCX has been contracted by the National Food Reserve Agency (NFRA) to procure 32 000 metric tonnes of white non-GMO maize.
In an interview, Treasury spokesperson Davis Sado confirmed that government has released K10 billion for the purchase of the commodity of which NFRA received K5 billion while State grain trader, the Agriculture Development Marketing Corporation (Admarc) got K5 billion.
Over the years, there have been concerns by farmers that the delays by NFRA to procure maize result in increased post-harvest losses. Farmers also fear that unscrupulous commodity vendors take advantage of the delays by offering farmers poor prices.
To solve the challenges, this year, government has directed the AHCX—which provides an organised market system through which a warehouse receipt system enables farmers to access quick cash while waiting for prices to improve—to purchase the maize on behalf of NFRA.
NFRA chief executive officer Nasinuku Saukira said his agency was currently looking for warehouses in Blantyre or Limbe, Mzimba, Mzuzu and Kanengo in Lilongwe to accommodate the maize.
“There had been concerns that we are delaying to start purchasing maize but [currently] we were looking for warehouses. The warehouses we are looking for must be those with a capacity to hold 5 000 metric tonnes [MT] and should be in very good condition. They must also have a weigh bridge. Once the exercise [to find warehouses] is completed we will start purchasing maize as soon as next week,” he said.
Saukira said they will initially purchase 32 000MT of maize but the figure might change according to supply and availability of funds.
On his part, AHCX research and communications manager Mark Ndipita, said maize will be procured from both smallholder farmers and traders at a fixed price of K150 per kilogramme (kg) including withholding tax.
He said traders can start submitting written expressions of interest to AHCX to supply a minimum of 30 metric tonnes and a maximum of 500 metric tonnes.
“AHCX has put in place mechanisms to ensure that there is independence, fairness, accountability and objectivity in the procurement of maize for the strategic grain reserve [SGR].
“AHCX has engaged the services of an Independent Procurement Committee [IPC] comprising various strategic stakeholders among them Anti-Corruption Bureau [ACB] for the oversight role, private sector representatives, and an independent audit firm to evaluate all submissions and recommend award of contracts,” Ndipita said.
Ndipita said AHCX is prepared to implement an efficient payment system that guarantees timely payments to suppliers.
“Payments for all delivered maize will be made within five working days after delivery through their registered bank accounts.”