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Malawi: Press Statement on Maize Procurement by Government

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Malawi
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Govt. Malawi
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BY Hon. KONDWANI NANKHUMWA, MP, MINISTER OF AGRICULTURE, IRRIGATION AND WATER DEVELOPMENT AT MINISTRY OF AGRICULTURE, IRRIGATION AND WATER DEVELOPMENT CONFERENCE ROOM

16th AUGUST, 2019

INTRODUCTION

I wish to welcome you all to this press briefing on maize procurement by Government to ensure that the country maintains adequate stocks for national food security.

Maize Procurement Exercise

Ladies and Gentlemen, members of the press, the Ministry of Agriculture, Irrigation and Water Development annually conducts Agricultural Production Estimates Survey. The objective of the survey is to assess the country's agricultural production to inform planning and policy direction for the nation.

Ladies and gentlemen, I am pleased to inform the nation that the results of third round Agriculture Production Estimates Survey (APES) indicate that maize production is at 3,391,924 metric tons, representing 24.7 percent increase when compared to the 2017/18 final round estimate of 2,697,959 metric tons.

Distinguished members of the press, ladies and gentlemen, according to the country's Strategic Grain Reserves (SGR) guidelines, it is recommended that the SGR size should be 217,000 MT, which comprise of 95,000 MT buffer stock, 8,000 MT emergency stock, 76,000 MT safety net stock for non-emergency response and 38,000 MT stabilization stock.

Ladies and Gentlemen, these stocks are kept by governments two statutory institutions namely ADMARC and NFRA. I wish to underscore that the stabilization stock forms part of what ADMARC sells through its outlets across the country. In light of this, ADMARC is buying maize from smallholder farmers using funds from a commercial loan amounting to MK2.5 billion. ADMARC opened its markets across the country from 10th July, 2019.

Members of the press, Ladies and Gentlemen, you are aware that every year government releases minimum farmgate prices for different crops upon factoring in the cost of production for each crop. Accordingly, this year's maize minimum farmgate price was set at MK150 per kilogram.

Ladies and Gentlemen, Government is aware of some maize buyers/traders/middlemen who started procuring maize lower than the minimum set Government farmgate price of K150/kg. Government condemns such traders for exploiting farmers and foiling government's motive of incentivising agricultural production of smallholder farmers. However, you may have noted that the country has experienced an increase in maize prices.

Ladies and gentlemen, the price rise has been worsened by declining stocks from previous season held by smallholder farmers, which resulted in increased demand for maize across the country. This is unlike the previous year, when the country had a carry-over stock of more than 500,000MT and the majority was held by the farmers. These stocks reduced the immediate maize demand on the market for that year hence cushioned any price surge across the country.

Ladies and Gentlemen, members of the press, in addition, the SADC region has been heavily affected in terms of maize production with our neighbouring countries' such as Zambia, Mozambique, Zimbabwe experiencing a reduction in their production figures. This also pushed prices as traders were trying to get hold of the grain hoping to exploit the international markets.

Ladies and Gentlemen, you are aware government uses its two parastatals namely NFRA and ADMARC for purposes of food security in this country. These institutions are key to stabilize maize prices when the commodity is in short supply and to ensure availability of the commodity in consistent and adequate amounts throughout the country at all times.

Ladies and Gentlemen, maize being the staple food for most Malawians, it has compelled Government to take extra measures that will ensure that the domestic grain is procured to meet the required stocks for the country's preparedness in case of any eventualities.

Ladies and Gentlemen, members of the press, to ensure that Government has enough stocks for such purposes, government has directed that ADMARC maize buying price be revised from K150 per kilogram to K180 per kilogram for all maize delivered to rural markets. In addition, government has also directed that if the maize is being delivered to ADMARC depots the price will be K200 per kilogram.

Ladies and Gentlemen, to complement maize procured by ADMARC, Government has also directed that NFRA enters the market as soon as possible to replenish the SGR. NFRA will be buying maize from all Malawians at a maximum price of K200 per kilogram.

Ladies and Gentlemen, government has taken such steps to avoid any previous scenarios whereby Malawi maize flows to neighbouring Mozambique and Zambia through informal cross border trade.

I would like to assure the country that we have enough maize stocks for every Malawian and that the country is food secure. I will continue monitoring the procurement process and provide regular reports to ensure that we secure the minimum requirement for national food security for both ADMARC and the Strategic Grain Reserve.

With these remarks, I would like to thank you all members of the press and that you will be informed of any progress that is being made on the exercise.

I thank you All