20101016
IPS

Lusaka — Buoyed by government's fertiliser subsidy, Zambia's farmers produced 2.8 million tonnes of maize in the 2009/10 growing season. Initial delight over the increased harvest - up from 1.8 million tonnes the previous year - gave way to worry as farmers realised they could be stuck with most of the crop.

The country's small-scale farmers have almost no direct access to markets, depending on the national Food Reserve Agency to buy their maize. Maize is bought by the FRA as a national strategic reserve to guard against food insecurity in the country.

Since May, the FRA has taken delivery of more than 697,000 tonnes of maize from farmers at a fixed price of $260 per tonne. At that price, the agency owes farmers a total of $180 million, dramatically exceeding the agency's $20 million budget for purchasing maize this year.

The maize is sitting in FRA satellite depots dotted throughout the country, but many farmers are still waiting to receive their payments. Before the latest harvest, Zambia's storage depots already held almost 300,000 tonnes of maize from the previous season, bringing the total maize available in the country to 3.1 million tonnes.

Philemon Kamwi, a small-scale farmer from Shang'ombo district in western Zambia, fears his crop will go to waste with the onset of the rains in October. "We still have stacks of maize lying around within the district, more than 40 tonnes," he worries.

Due to delays in payments by the FRA, some farmers resorted to selling maize to vendors at village markets for prices as low as $100 per tonne. Others began bartering maize in exchange for goods, such as groceries or bicycles. The farmers need money immediately, yet are fully aware that at such a low price, they only recover the costs of producing the maize.

Easing the pressure, a group of banks, led by Standard Chartered of Zambia, in October agreed to loan the FRA $140 million to support purchases of maize, but Zambia's agricultural minister, Peter Daka, concedes that the record maize harvest has posed several challenges, including transport, storage and selling the maize.

Government expects that two thirds of the FRA's stockpile will be consumed domestically, but government is trying to sell large amounts to neighbouring countries. But there is a hitch: because everyone is aware of Zambia's dilemma, FRA could struggle to sell the crop at competitive prices.

FRA spokesperson Mwamba Siame, told the press that the agency is negotiating the sale of 160,000 tonnes of maize to Namibia, Zimbabwe and the Democratic Republic of Congo. She said she was not able to disclose for how much the crop would be sold for.

"FRA will have to offload this maize at a much reduced price, which will just recover costs" to the detriment of the national economy, said Noel Nkoma, president of the Economics Association of Zambia (EAZ), at a press briefing in Zambia's capital Lusaka.

Government must steer a careful course to secure the best possible price for its surplus, both to service the loan and to safeguard farmers' incomes and next year's harvest.

Boyd Lyambai, chairperson of the Zambia Small-Scale Farmers Network stresses the fact that farmers need a decent return on their grain harvest to be able to invest in the next planting season.

"Our members need the money to buy input [for the next farming season] and cultivate the land. They need money to adequately plan ahead. We hope that the FRA will move fast to empower the farmers with the finances."