The Food Reserve Agency (FRA) has announced K65 000 as the maize floor price for a 50 kilogramme bag of maize for the 2009/2010 marketing season.
The agency has also announced K60 thousand as the rice floor price for a 40 kilogramme bag for this year’s marketing season.
FRA Board Chairman, Costain Chilala says this represents an increase of 18 percent for maize and 15 percent for rice.
Mr. Chilala announced at a press briefing in Lusaka that the FRA will this year buy 110 000 metric tonnes of maize an 1200 metric tonnes rice at a cost of K200 billion.
He also said the rice and maize price for this year’s marketing season are as a result of consultations with various stakeholders on grounds of production, supply and demand factors affecting the food balance sheet.
Mr. Chilala also said FRA will buy most of its maize from outlaying ares as directed by president Rupiah Banda early this year.
He however said farmers should use the floor prices as guidelines when negotiating with buyers.
Meanwhile, the agency has announced that it will only buy maize and rice from farmers this year.
Mr. Chilala said the withdrawal from buying other crops such as cassava is as a result of non availability of a market and processing plants for the crops.
He said the agency has embarked on a country wide rehabilitating its silos in Kitwe, Chisamba, Monze, Ndola, Lusaka and Kabwe which have beeen vandalised over time.
The FRA Board Chairman said the first rehabilitated silos will soon be commissioned in Lusaka.
[ZNBC]
You will see how unscrupulous businessmen will turn this price tag around soon.
The Zambia Nation Farmers Union (ZNFU) where opting for a floor price of K80,000 but K65,000 is not bad. This is better than last years floor price which was
k38,000 for Maize and
K50,000 for Rice.
This will surely encourage people to engage in farming and will give our rural community who worked hard in giving us this bumper harvest a good livelihood.
This will also enable farmers to pay for expenses and will give farmers a negotiating base when dealing with unscrupulous businessmen.
You know, Zambia has ZAMACE (zamace /com), which is it’s own commodities market. All the government would need to do to guarantee any farmer the market price, is to put into law that all maize must be traded through ZAMACE.
Farmers in all parts of the country would be paid exactly the same, especially if transportation was done by a state agency, on a cost only basis.
This would: 1) guarantee a high price for farmers, 2) massively increase the volume traded at ZAMACE, 3) put Zambia on it’s way to develop it’s own commodities markets, which should also include copper, cobalt and other minerals.
There is so much a country so rich in natural resources could do to directly benefit from those resources, without the corrupt interference by the major powers local politicians.
So called Free market economist, on what do you base your opinion that K65 000 is not bad? You are as shortsighted as your govt and their communist FRA. I would want to see the FRA go into Maize growing so that they know how much it costs to produce a bag of maize. We cannot have a weird situation where a buyer comes into your shop and sets the price. Apparently in Malawi the price of Maize ranges from K75 000 to K85 000. My advice to people in Eastern Province is to sell their maize to Malawi. They will get a good price for their sweat.
Lets wait and see
So now the government should buy the maize from the farmers kabili.
#4 I agree, this free market something is a pure communist who just smoked a few puffs of capitalism but forgot to inhale and he is now walking around thinking he is high on free market economy. Why should a farmer wait for a floor price, why can’t he be allowed to export his maize where ever he wants ..where it will give him top money. Scrap this floor price nonsense. Those people you call unscrupulous businessmen are critical to capitalism, we call them speculators and they guarantee those farmers a market and do you realise that those unscrupulous businessmen incur a risk? And the price of maize they buy could even fall below the price they pay for if they wrongly calculate the supply/demand side of the equation. These are the people who manage risk and don’t demonize them.
#7ctd.. At the Indaba, there was a lady who from IMF, I can’t remember, who basically said the agriculture marketing system in Zambia is a total joke and govt needs to do something about at, and I hope this was in the Indaba. A farmer needs to know the price of his produce, have the contract singed before he even drives his tractor onto the field and he should leave the worry of the price movements to the speculators or people you call unscrupulous businessmen. Let those take that risk. Govt needs to set up a robust farming market. Study the the Chicago Board of Trade to get an insight in what am talking about. Profit is an important element in a free market economy. And yes, so is Loss. Profit is telling you you are doing things right and a Loss is telling you you doing things wrong.
I don’t think speculators making money off assymetry in price information between them and the farmer is capitalism.
The farmer does all the work and takes all the risk, so why should anyone else profit off his labour?
Let the farmer and real entrepreneur (not speculators) take care of capitalist side, and let the state take care of the infrastructure – the commons. The state can transport his produce to market at a cost only basis, and let all maize be sold through a national electronic market, like ZAMACE.
That would create the maximum price discovery, take the middlemen out of the transaction and increase the farmers incomes.
So called Free market economist, on what do you base your opinion that K65 000 is not bad?
I base it on last years floor price. K65,OOO is way better than last years floor price which was K34,000.
You are as shortsighted as your govt and their communist FRA.
If you have ever seen my conversation with wiseman-reborn, you would know that I am against the FRA system. I am for a market system where everything including transport systems is privatized. The govt must have no hand in the production, transportation and distribution of food and must not pass any laws forcing one into making obligations they don’t want. [tbc
still on You are as shortsighted as your govt and their communist FRA.
In this case, I support the FRA because they are buying maize from inaccessible areas and have set a negotiating price for farmers who are not part of cooperatives. The FRA has told the farmers how much maize it will buy, A farmer can still go above or below the floor price. The FRA has just set the price it will buy maize at and the negotiating price. No one is forcing the farmer to do anything. The floor price is the negotiating price. The ZNFU can still sell maize to Malawi if it wants to and you can blame govt about high mealie meal prices due to maize shortages since the only reason you come on this blog is to criticize everything the govt does even when it is good.
One more thing mbulawa . Next time you are talking to someone, please have some respect when you are airing your views even if you do not support the persons views. You have shown great immaturity on the post you made. You are behaving like a kid.
Show some maturity when talking to people. Name calling will take you nowhere.
#4 I agree, this free market something is a pure communist who just smoked a few puffs of capitalism but forgot to inhale and he is now walking around thinking he is high on free market economy
Mbulawa, maybe you can help me out. All I can see in the above comment are Ad Hominems. How am I supposed to reply to a comment that is void of any intelligent argument. Please help me out here.
Why should a farmer wait for a floor price, why can’t he be allowed to export his maize where ever he wants ..where it will give him top money.
In this case, the floor price is the negotiating price. The farmer can still sell at any price he/she wants. The negotiating price is to give[tbc
Why should a farmer wait for a floor price, why can’t he be allowed to export his maize where ever he wants ..where it will give him top money.
In this case, the floor price is the negotiating price. The farmer can still sell at any price he/she wants. The negotiating price is to give farmers who are not part of cooperatives a price range to work with. Without that, they cannot negotiate a price that will cover their costs. In a perfectly competitive market, a producer cannot pick the price, he or she receives the price from the buyer which is why it is essential that producers form cooperatives so as to have bidding power. OPEC is an example of that.
A farmer needs to know the price of his produce, have the contract singed before he even drives his tractor onto the field and he should leave the worry of the price movements to the speculators or people you call unscrupulous businessmen.
Ok this wont work. Prices change all the time. We either need to adopt one of these two methods. The method mrk has suggested of having a commodities exchange market or the other method of auctions. I support the auctions method because a commodities exchange like a stock exchange has got transfer costs (paying brokers), an auction method is better and has worked for produce like tobacco.
Just to add one more thing, no one is forcing the farmers to grow maize. If the farmers don’t think maize is fetching them the price the want, let the grow other products like wheat, cotton, chillie,etc. These clearly fetch a better market price than maize and are not part of the FRA floor price system. After all, we are in a free market economy.
I do however request that Mbuluwa and Chinondo apologize immediately to me for the insults they have lashed my way. I will check back later for the apologies.
Ndelima bane unomwaka.I don’t want to listen to Father Frank Bwalya!!!
Free fimo fimo learn 2 ignore certain comments you are crowding LT wth your replies. Anyway a bag of fertilizer costed farmers k190, 000 them sellin maize at k65,000 is not fair. I wud rather sell my maize in malawi where the price is reasönable.
Free Market Economist,
Insults are part of the internet. Just look at it this way – if they can’t counter your argument, you have won. 🙂