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Thursday, 16 August 2012

Crop Marketing in Zambia

A recently parliamentary report (embedded below) on the state of crop marketing in Zambia observes  :
There is lack of a comprehensive policy and legal framework to guide proper functioning of agriculture marketing.....The cost of doing business in Zambia is very high. This is partly due to poor infrastructure,high interest rates and high transport costs. The infrastructure around the country is extremely poor. It is of the view that the developmentof infrastructure, particularly roads, is extremely important in increasing access to markets and reducing the cost of marketing
On FRA the lid is lifted :
The FRA maize floor price announced by the Government does not take into account the costof production by small-scale farmers. This makes the price of a 50 Kg bag in Zambia morelucrative than what is obtaining in the region and, therefore, encouraging commercial farmers,both from Zambia and other countries, to sell maize to FRA. Effectively, the Government issubsidising the price of maize for the sellers in the region.
It suggests that the solution is partly big government :
A comprehensive legal framework, to be called Agricultural Marketing Act, should besubmitted for enactment by Parliament as a matter of urgency. The Act should provide for the establishment of the Agricultural Marketing Council as a statutory body to advise Government on market related issues, to monitor and analyse the performance of the agricultural market, and to investigate and advise on all statutory interventions in the market
Thankfully, it is also partly about sorting out the FRA, along the lines we have previously suggested :
In order to prevent confusion, a separate buying organisation away from the FRA should be put in place. This will require the FRA Act to be repealed so as to allow it to purchase maize at competitive bidding from the market for strategic reasons....Functions of the FRA should be streamlined by maintaining its original responsibility of keeping strategic reserves...
 Parliamentary Report on Crop Marketing in Zambia

2 comments:

  1. Is anyone scared of the clause 'In order to prevent confusion, a separate buying organisation away from the FRA should be put in place'?

    Another NAMBOARD?

    ReplyDelete
  2. The problem is we can't decide whether or not the maize price is free market or not. The private sector can buy the maize if they have access to capital, the roads are passable, and prices are allowed to fluctuate seasonally. Tomato prices and cabbage prices go up and down but there are always cabbages and tomatoes. There is no Tomato reserve agency.

    ReplyDelete

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