Maize Marketing is political-CTPD

The Centre for Trade policy and Development has observed that Zambia will not see the potential benefit of Maize trade to the economy if the marketing process remains politicized.

In its submission to the Expanded Committee on Government Estimates and Revenue at Parliament Buildings on Thursday, CTPD said increased state intervention in the maize marketing process crowds out the private sector and eventually stifles growth.

“CTPD continues to argue that the use of regulatory mechanisms such as export bans to artificially lower State intervention in the maize market must be minimal and clarity on whether FRA should be buying maize above its target, particularly when research evidence shows FRA has incurred financial losses when exporting excess maize due to several other costs incurred by the agency,” it said.

It added that there is need to bring on board private sector participation in Maize marketing and limit the role of FRA in maize marketing to strategic reserves only.

“This will help address current challenges of delayed payments to farmers due to funding gaps created when FRA goes beyond set targets for purchase,” it said.

The organisation noted that the development of the agricultural marketing bill and its enactment is critical in addressing current challenges in agricultural marketing in Zambia adding that a specific budget line supporting the development of this bill should have been provided in the 2015 national budget.

It said institutional reforms of the FRA are proposed by CTPD to ensure that FRA is restored to its original objectives and that policy measures and incentive such as maintaining an open border policy be instituted to encourage private sector participation in Maize trade particularly for regional and international markets where Zambia’s Maize can compete favourably.

“Efforts to improve the policy and market landscape have led to the development of three key pieces of legislation although none of which has been implemented so far. These include the Agricultural Credit Act 2010, which provides inter alia the legal framework for the implementation of a warehouse receipt system. This would pave way for certified storage of agricultural commodities and inject operating capital into agricultural value chains to the advantage of all stakeholders. Another piece of legislation drafted is the Commodity Exchanges Bill that should allow for Government oversight and regulation of commodity exchanges and allow for the robust enforcement of trading rules, principles and practices.”