By Jervis Zimba ZNFU PRESIDENT
The Zambia National Farmers’ Union (ZNFU) would like to state that the press statement attributed to the Competition and Consumer Protection Commission (CCPC) over tomato and cabbage dumping is extremely irresponsible and must be condemned with the contempt it deserves.
To the best of our knowledge, the CCPC has a mandate and responsibility to ensure that entities compete in a level playing field and this aspect is premised on the Competition and Consumer Protection Act No. 24 of 2010 which allows the CCPC to investigate and prohibit abuse of dominant position specifically on selling of goods below their marginal or variable costs and a penalty is defined in the same Act.
The producers are concerned that the Commission has quickly jumped to the public gallery and concluded that the Union is advocating for restrictions in the market when the reverse is true. Our expectation was for the Commission to take keen interest in this development, conduct immediate investigations then issue a factual statement and measures to correct the anomaly observed in the market.
As a Union we are alive to the risks associated with predatory pricing and dumping on the economy. If predatory pricing is not checked, prices set low will drive out competitors and create a monopoly. Consumers may benefit from lower prices in the short term but will suffer in the long run after eliminating competition which would trigger a rise in prices and a decline in choice.
Such potential volatility should attract the eagle’s eye of the regulator, CCPC in this case, and guarded against. Dumping perpetrated by a few entities and gross distortion of commodity markets ultimately undermines the livelihoods of farmers. The Commission has the mandate and resources to correct this, and the ZNFU shall not be bullied into not reminding regulators to do their jobs.
The Union has been on record before sounding the alarm on other commodities in the past and the failure by relevant government institutions to act has only served to hamper the agriculture sector’s growth and the most negatively impacted are producers. We don’t want history torepeat itself under the New Dawn Administration. Failure to ensure that farmers compete in a properly regulated marketing environment only serves to compromise consumer welfare and the food security position of our country hence our call for immediate intervention in this matter is valid. The past has examples of production of commodities that collapsed because government entities failed to put in place the necessary safeguards to protect market integrity in a timely manner.
Safe to say that ours is a noble call which should be heard and acted upon by the competent authorities that are empowered by law. The Union needs not be preached to about value addition and promoting storage as we have championed this in other commodities. There are success stories on record which can be replicated if the price incentive remains right as it is a catalyst for remaining in business and increased production. It is not feasible to survive in business and increase production if one sells below production costs hence we remain adamant that CCPC should own the problem we highlighted and invoke remedial measures.