The Centre for Trade Policy and Development has observed with great concern that the recently announced purchasing price of Grain by the Food Reserve Agency is not cost-reflective and can hurt farmers.
The CTPD also notes that the current prices only highlight historic controversies associated with state intervention in agriculture.
Dr. Simon Manda, the CTPD Senior Researcher has further noted that these prices will not help to stimulate rural growth as it will erode opportunities meant to enhance rural income disbursements necessary for driving an agricultural transition, poverty reduction, commercialization and value addition.
He said these prices will discourage small-scale farmers and other rural producers to engage in agriculture.
“CTPD advised that if care is not exercised, the country risks failing to produce a stream of empowered rural producers capable of commercializing and even transitioning into diversified economic and livelihood avenues”, he said.
Dr. Manda said in addition, such low purchasing prices have the potential of depressing private sector actors who would even push their buying prices further down, undercutting what has been announced by FRA especially that the institution is associated with persisted delays in paying farmers.
He said with the growing public external debt now estimated at 11.2 billion US dollars of external debt, his Organisation is even more worried that payment towards procurement of strategic reserves may even take longer than the 5 to 6 months delays observed in the recent past.
Dr. Manda said Regional experiences such as from Tanzania have shown that it is possible to limit the extent of state intervention and stimulate private sector actors to provide competitive prices even better than is provided by our government.
He said the difference has been that the Zambian Government has been bold enough to carefully think through the benefits of private sector engagement in agriculture.
“Such efforts have seen cost-reflective prices prevail thereby expanding opportunities for local producers. In light of the COVID- 19 pandemic and the need to ensure availability of funds for the most vulnerable groups, CTPD urges Government to consider allocating part of the ten billion stimulus package recently announced by the Bank of Zambia to support procurement of grain by FRA as this will be critical in ensuring that our local farmers get their payments on the spot should they opt to sale their grain to the Agency”, he said.
Dr. Manda said this will go a long way in protecting small scale producers from the harsh economic hardships the country is currently going through.