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| National |
| NFRA justifies grain sale |
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by
Denis Mzembe, 18 July 2003
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09:38:46
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The National Food Reserve Agency (NFRA) has said it will only sell the 100,000 metric tonnes of maize in its stocks internationally to avoid depressing local grain prices.
The agency is inviting bids from international companies to import 100,000 metric tonnes white maize located at Kanengo silos, Limbe and Luchenza depots.
In an interview on Wednesday, NFRA general Manager Patrick Makina said there is currently excess availability of maize in the country and Admarc is in the process of procuring the grain from small holder farmers.
“So if we locally release the 100,000 metric tonnes the market would not only collapse but our farmers would also be affected because of the slump in prices. They would sell their maize at a loss,” he said.
The result, he said, is that farmers would be dissuaded from growing more maize in the next season.
“In fact it would be hard for them to afford farm inputs,” he said.
The maize NFRA is selling, Makina said, is part of the commercial maize government imported for commercial purposes.
“Otherwise we are still maintaining the 100,000 metric tonnes in the Strategic Grain Reserves to cushion the country against any future food shortages,” he said.
Makina said he expected the 100,000 metric tonnes of maize would be sold to countries such as Zimbabwe, Tanzania and others that are currently on the verge of experiencing food shortages.
A recent independent audit report on the sale of maize from the Strategic Grain Reserves says NFRA is currently heavily overstocked with maize.
The report published by Economic Resources Limited and Ernst and Young says in addition, substantial carryover stocks are held by Admarc and smaller but significant quantities by government, World Food Programme and private traders.
“The resultant vast market overhang could easily lead to a price collapse hitting the poorest along the lines of the sequence of events of 1999, the knockout effects of which have been severe.
“It is the view of the consultants that these surplus stocks must be ring fenced from the market,” the report says.
It suggests that to minimise losses and immediate and active export exercise be undertaken to countries such as Zimbabwe and Ethiopia.
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