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Sunday, April 29, 2007

Malawi doubles maize surplus
by Tadala Makata Kakwesa, 29 April 2007 - 06:48:49
Malawi expects to harvest 3.4 million metric tonnes of maize, up from 2.6 million metric tonnes last season, authorities say.
The current yield, which is above the 2.1 million national consumption requirement, means that the country will have a surplus of 1.3 million this year, more than double the extra grain chalked in 2006.
Apart from eliminating hunger, the private sector says the bumper harvest is also good news to local businesses since it will influence further slides to the national inflation rate.
Maize, Malawi’s staple food, controls 58 percent of the consumer price index and has a macroeconomic destabilising force if in short supply.
With low money supply, the Reserve Bank of Malawi should find space to slash the bank rate from the current 20 percent and allow the productive sector to borrow for expansion. Inflation currently stands at 8.6 percent.
Confirming the high production, Secretary for Agriculture and Food Security Patrick Kabambe said the figures are likely to be higher since the current ones are provisional.
Kabambe said government will sell part of the surplus to Zimbabwe while the private sector will be allowed to export the grain to any market of their choice.
He said Admarc will buy part of the maize while government will store some of it in community silos, some of which are in their final stages of construction.
“We are also encouraging industries to process the maize into, for example, animal feed, among other products,” said Kabambe.
In an interview, Finance Minister Goodall Gondwe said government intends to increase its food security budget and accumulate a two-year food supply.
He said Zimbabwe and other African countries, particularly ethanol producers, have increased their demand for maize.
Gondwe, who confirmed that government intends to sell 400,000 metric tonnes to Zimbabwe, said it was not true that government has barred the private sector from selling its maize to Zimbabwe.
“That’s not true, we have indeed said government will sell 400,000 metric tonnes to Zimbabwe but that doesn’t mean the private sector cannot do that, they are free to sell,” he said
In an earlier interview, the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) chief executive Chancellor Kaferapanjira said the private sector has been ordered not to sell maize to Zimbabwe, but that they should concentrate on other countries.
Kaferapanjira said the private sector has no problems with the government’s decision to go solo on the Zimbabwe market as long as it gets paid.
“We hope the government of Zimbabwe will pay our government, because that is the most important thing,” said Kaferapanjira who described the bumper harvest as good for the country’s economy as it will lower the inflation rate and interest rates. He asked government and the private sector to buy the farmers’ maize at reasonable prices.
“But the only disadvantage is that when there is so much maize on the market, the prices go down, so when the prices are too low, it acts as a disincentive to farmers who will not feel encouraged to grow more the following year,” he said.
The subsidy programme, computed to cost tax payers around K7 billion on average annually, has helped Malawi achieve food security over the past two years after years of starvation.

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