Maize price control unacceptable
Published On January 9, 2014 » 2939 Views» By Hildah Lumba » Opinion
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REPORTS of escalating prices of mealie meal, as well as complaints by consumers and talk of whether there could be some form of price control have all certainly been provocative.

The high cost of living, partly occasioned by the rising prices of mealie meal, has of late become a topical issue country-wide, and has predictably engendered a good deal of controversy.

Opinion is divided. While some traders link the hike in the price of the commodity to such recent developments as the Government’s decision to stop fuel subsidies, others point to fluctuations in the price of maize.

As of now, the Government, through the Food Reserve Agency (FRA) has maintained the floor price of K65 for a 50-kilogramme bag of maize. But FRA is selling the same commodity to the millers at K85.

However, there are reports that some individual farmers sell the commodity at more than this while some traders are said to have been sweet-talking the small-scale farmers from whom they have been buying the commodity at less than K65.

A free market economy par excellence which has, however, seen the escalation of mealie meal prices. The millers want FRA to sell its maize to them at less than K80, saying this is one way the price of the finished product may reduce.

FRA has refused, saying this will not compel millers to reduce the price of mealie meal. In any case, it has never happened in the country where the profit-making seems to be the norm. This has forced some consumers to suggest that the Government should intervene and effect some form of price control.

But taking this path is unacceptable by the Government that has a more cautious perspective, obviously fearful that the move would harm Zambia’s impressive economic performance recorded over the years.

Indeed, removal of price controls largely contributed to Zambia’s competitiveness leading to the country being considered 6th best to do business in Africa. This was in 2010, but since then, Zambia has continued to attract significant foreign direct investments (FDI).

Besides the removal of price controls, there has been, from a broader perspective, the easing of regional and global trade barriers which economists say has also contributed to an open trading regime and, consequently, spurred economic growth.

All these factors have maintained investor confidence in the country, seen as a key issue even after the Patriotic Front Government reversed the privatisation of Zambia Telecommunications Company (Zamtel).

Even with the sky-rocketing prices of mealie meal in nearly all parts of the country, a return to price control is out of the question. This position was reiterated in yesterday’s report that quoted Agriculture and Livestock Minister Bob Sichinga saying his Government was not going to apply price control measures for mealie meal.

The Government is looking for a mechanism to have the prices reduced, and become affordable by all, especially that maize remains the country’s staple food.

The Government has further banned the export of maize and put in measures to curb smuggling of the commodity to neighbouring countries, culminating early this week into the impounding by police of three trucks laden with more than 900 by 50-kilogramme bags of maize which were en route to a neighbouring country.

Surely, maize has not been in short supply in Zambia for a long time to warrant an excessive increase of mealie meal prices.

The Government is even looking at other food security strategies, one of which is to focus on expanding the area of planted land.

The Zambia Prisons Service has come up with theidea to set up buying depots in all provinces, increase the production capacity of its Kalonga Milling plant, produce more than enough food for inmates and sell the surplus cheaply.

Consumers would be attracted by cheaper mealie meal from prisons and shun expensive ones from other outlets, thereby forcing even these to reduce their prices as well. OPINION

 

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