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Alba Iulia
Thursday, August 13, 2020

There is no need to keep grain in the country when there is a surplus-IAPRI

Economy There is no need to keep grain in the country when there...

stack of over 14 000 x 50kg bags of maize bought by FRA at Chipoka Satellite depot in MbalaTHE Indaba Agricultural Policy Research Institute (IAPRI) has warned that trade restrictions such as an export ban raises smuggling costs and create price instability, thereby punishing the consumer.

IAPRI research director, Anthony Chapota, explained that export bans lead to market to price instability as most traders took advantage of the business opportunities where the neighbouring commodities were on demand in other countries.

“There is no need to keep grain in the country when there is a surplus. When you introduce trade restrictions such as an export ban, which is the desire to protect consumers, leads to price instability. For instance, in 2016, prices for maize in Kitwe were going at K85 for a 50kg and K175 for the same quantity in Kasumbalesa,

“People see business opportunities during trade restrictions and they always find a way of taking advantage of it,” Dr. Chapota said.

He was speaking yesterday in Lusaka at a stakeholders meeting.

Dr. Chapota said there was need to open intra trade to avoid piece instability saying price volatility was induced by Government policies.

He has since called on Government to continue fostering effective private sector market development through predictable and stable policies.

“There is need to moderate price volatility trough a well-managed trade regime. Decisions are made late and unpredictable prices end up punishing the consumers,” Dr. Chapota said.

Dr. Chapota also said unpredictability deterred private sector from participating in the market.

He, however, observed that large grain investments facilitated movement away from spot to structured markets for smallholder farmers through models such as pre-financing, contract farming and forward contracts.

Dr. Chapota observed that some of the innovations in the market had benefitted farmers.

3 COMMENTS

  1. Mr Chipota is cooking for his belly. The issue of farming in Zambia is not about the market price but the input prices. EG, a bag of fertilizer costs K400/50kg, Maize seed is K360 and K250/10kg.
    Now you count labor cost to cover a 1 lima will need K250.

    Peasant farmers are toiling to produce the maize grain only to profit the FRA who are selling on exorbitant prices to boarder and other African countries like Burundi, Rwanda Congo

  2. I fail to understand what research this man did. His thesis is lopsided. He’s a money hungry man who is not thinking of anything else but profit. They are variables at play in maize marketing. We talking about the countrys staple food here. Do not be to narrow in your perspective.

  3. Imagine these two families that stay close to each other. One family grows its own food and the other does not. One family has one child leaving at home and 5 others at boarding school. The other family that does not grow its food has all six children all living at home. It is always eyeing the food of the neighbor and can buy such food at any cost. The other family that grows food has a surplus before it considers the children away. Should it sell to the neighbor what it terms as surplus because the neighbor is ready to pay at any cost what happens when the other kids return? Dr Chapota’s analysis is faulty because surplus can be transitory. It is here today and not tomorrow especially when it pertains to food. A serious government plans ahead. It does not matter what the price in…

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