The African Institute for Corporate Citizenship (Aicc says the grain sector needs a structured commodity marketing system if farmers are to realise maximum profits from their produce.
Aicc, an organisation that promotes development of business, in the agriculture sector, said the current grain marketing system where everyone is a buyer, leaves many grain farmers worse off.
Speaking on Tuesday at a press briefing in Lilongwe, Aicc head of programmes Driana Lwanda said Malawi needs a proper direction in grain commodity marketing, either by using an auction system or export mandate system.
“Through the auction system, multiple buyers compete in offering prices and that would be easier for the grain to be marketed and for farmers to make profits from their grain produce,” he said.
The export mandate system calls a single commodity exchange market or buyer.
A position paper on the future of grain markets in Malawi, adopted in August this year by 49 stakeholders in the agriculture sector, acknowledged that price fluctuations in the current market regime eats out 40 percent of a farmers’ average income.
Reads the paper in part: “The prevailing grain marketing compromises the potential that the subsector has in socio-economic development of the country. As farmers lose out, the nation also loses out on potential earnings.”
The establishment of an enforceable system guiding grain commodity marketing is billed as the viable way in boosting the grain sector in the country.
Already, the country has AHL Commodities Exchange (AHCX) and Agriculture Commodity Exchange (ACE) for Africa.
But the two platforms are not using the auction system that key players in grain sector are promoting, according to Lwanda.
Apart from the auction system, export mandate system is also mooted as another way to go with government as its staunch supporter.
If Malawi can adopt the latter, it means one of the current commodities exchange markets, AHCX and ACE, has to go.
The press briefing was held ahead of a public debate on Wednesday that brought together stakeholders in agriculture value chain to find solutions on how best Malawi can structure the grain marketing system. n