A half-billion dollar reason fromZAMACE's Brian Tembo on why you may not want to celebrate the bumper harvest just yet :
"The projected K2 trillion, expected to be spent on the close to two million tonnes from small-scale farmers, is above the budgeted K1.23 trillion allocated to the agriculture sector in the national budget.....But can the country sustain this kind of expenditure?...Whichever way you look at it, for the government to continue subsidising production and purchases, the US$400 million deprives the citizens of the much needed services and also goes to subsidise the region as we will store and sell at lower prices for the benefit of the region. There is a problem with this sort of business model. The other key issue is that the majority of the maize is smallholder grown and there are therefore quality concerns discounting our maize price on the international market further......
When it’s time to export, when you factor in the storage and transport and finance charges, we shall effectively sell our maize at a loss. The point is that the country only expects to consume 1.3 million tonnes of this commodity and we have carryover stocks from last season of over 800,000 tonnes and a bumper crop of three million tonnes! So the surplus will therefore be exported...The traditional destination is Zimbabwe. Zimbabwe will not buy maize until their lean season around September. So factor in storage and also note that they will not just look at Zambia but Malawi (cheaper source) and South Africa (much cheaper source). For export add a differential of about $60 to our price....."
We have previously touched on Zambia's broken maize marketing policies. Not sure when this madness will end but good to see Mr Tembo standing up for common sense.