Ministry of Agriculture has raised farmgate prices by an average of 30 percent and barred foreigners and big traders from buying produce directly from smallholder farmers.
Minister of Agriculture Lobin Lowe yesterday announced the farmgate prices at a press briefing in Lilongwe, with maize price set at K220 per kilogramme (kg), polished rice at K700 per kg, unpolished rice at K300 per kg, shelled groundnuts at K740 per kg while unshelled groundnuts are at K450 per kg, among others.
Lowe said foreigners and big companies will not be allowed to buy the produce direct from farmers.
Said the minister: “Only Malawians will be the ones to go to the villages and buy from farmers and sell the produce to the big buyers in cities. Even the locals will need to get licensed to go and buy from the farmers.
“We do not want foreigners on the market. We have young Malawians who are into this business. It’s these Malawians who should be given licences and they will have to identify areas where they will be buying and selling.”
Lowe said government has taken this move to bring sanity in the market and farmers to benefit from their investment.
“The traders also should benefit, but most importantly it should be the farmer so that he should be able go again into production,” he said.
According to the minister, the local buyers can obtain an Agricultural Produce Buying Licence from the Ministry of Agriculture, Agricultural Development Divisions (ADDs) or from district councils.
He stressed that buying agricultural produce without a licence or below the set minimum price is an offence.
“I wish to request all district councils, local
leaders and security agencies in government to assist my ministry in enforcing these minimum prices.
“Buyers of agricultural produce should not be allowed to buy produce from our smallholder farmers below the set minimum prices,” said the minister.
Government has further set the price of cotton at K400 per kg, cassava at K110 per kg, soya at K480 per kg, sorghum at K360 per kg, finger millet at K480 per kg, pure beans at K480 per kg, white harricot beans at K500 per kg, mixed beans at K460 per kg, pigeon peas at K420 per kg, cow peas at K560 per kg, sunflower at K450 per kg, paprika at K900 per kg, chillies at K1500 per kg, sesame at K950 per kg and bambara nuts at K600 per kg.
The new prices are based on the cost of production, market forces, and price trends for the previous years and the need to provide incentives to growers.
On his part, Ministry of Agriculture Principal Secretary Sandram Maweru said following the announcement of prices, buyers can obtain licences and start purchasing the produce where it is ready.
He said the Agricultural Development and Marketing Corporation (Admarc) and National Food Reserve Agency (NFRA) are also ready to start buying produce from farmers.
“Following the change of financial year from July to April, Admarc and NFRA should be ready to start buying earlier,” said Maweru.
The PS added that the ministry will collaborate with police and other stakeholders in ensuring that buyers adhere to set prices, that they are licensed and are using weighing scales that meet standards.
Maweru further urged Malawians to report any malpractices in the produce market, adding government will ensure that the local industry has enough raw materials before any plans to export.
Last year, the local industry was deprived of raw materials for cooking oil as the country exported most of the crops used in cooking oil production, a development that affected cooking oil prices.
Meanwhile, Admarc general manager Rhino Chiphiko has said the farmgate prices are reasonable, adding Admarc was consulted on the same.
In an interview yesterday, he said the State-run grain trader is also preparing its storage facilities in readiness for the buying exercise.
Chiphiko observed that Admarc may be under pressure to compete with those offering high prices, citing soya which is already being bought at K800 per kg.
“Actually we need more money to be able to buy because out there the prices that have been set are high,” he said.
Asked when Admarc will start buying produce, Chiphiko said the institution is waiting for funding from government.
Government allocated K2.6 billion to Admarc in the cureent National Budget.
For maize, he indicated that Admarc will go on the market mid or end May when the grain moisture content, especially in the Southern Region, would have reached the required levela of around 13 to 14 percent.
Said Chiphiko: “Currently the moisture content is still high at around 18 to 20 percent in the Southern Region. In the North and Centre, it is around 20 to 30 percent. We need the moisture content to drop because we buy for storage. We cannot keep the grain with high moisture content.”
He disclosed government has not released money for buying maize yet, Admarc has been given a go-ahead to borrow from banks and they are in talks with banks to source about K36 billion.
On his part, Farmers Union of Malawi president Frighton Njolomole hailed the new farmgate prices, saying they are much better than last year.
However, he said there is need to ensure that those buying the produce adhere to the set prices or offer more.
“We need a lot of security to protect farmers. There are people who always want to exploit others. We do not want vendors who will exploit farmers,” said Njolomole.
He feared that some Malawians will connive with foreigners and big traders to buy the produce from farmers, which may still lead to foreigners and big traders benefiting.
Njolomole called on Admarc to start buying early, saying by now they should have invested in grain dryers and stop giving excuses of moisture content.
He also said government to release finances on time to enable Admarc start buying early.
In a separate interview, agriculture expert Tamani Nkhono Mvula also described the prices as fair, observing there is an increase compared to past prices.
“What is needed is good enforcement to ensure that the produce is being bought at those prices. There has been huge production cost this year. The rains came late, there were challenges do do with inputs but also the disasters,” he said.
However, he urged caution on barring big companies from buying directly from farmers, saying that will promote middlemen which will deprive farmers of maximum benefits.
“Let the market be open so that what these companies can offer to the middlemen can be paid to the farmers,” said Mvula.
Last year maize farm gate price was set at K150 per kg, polished rice at K600 kg, unpolished rice at K250 per kg, Soya beans at K320 per kg, shelled groundnuts at K480 per kg, unshelled K330 per kg, pure beans at K510 per kg, mixed beans at K410 per kg, pigeon peas at K240 per kg and cotton at K320 per kg.
The Ministry of Agriculture is mandated by law to set minimum farmgate prices for crops grown in Malawi. The exercise is in line with the Agricultural General Purposes Act 1987 Cap 65.05 of the Laws of Malawi.