MALAWI – The government of Malawi has given K6 billion (US$15.6M) to National Food Reserve Agency (NFRA), choosing the agency in buying maize for the 2023/24 Strategic Grain Reserve (SGR) replenishment instead of ADMARC.
According to All Africa, the decision by the government shows that NFRA has been mandated to purchase the strategic grain as opposed to using Agricultural Development and Marketing Corporation (Admarc) to procure the maize for NFRA on behalf of the government.
In a statement, David Loga, NFRA’s acting Chief Executive Officer said that NFRA has now opened its market to procure maize for the 2023/24 Strategic Grain Reserve (SGR) replenishment, revealing that the buying price would be K550 per kilogram.
“The buying price is K550 per kilogram and the procurement is on a first-come basis until the 30th September 2023 or upon reaching the targeted tonnage, whichever comes earlier,” read the statement.
This is the second time that the government is entrusting NFRA to buy maize solely according to Loga, adding that the fund will enable NFRA to buy 10, 822 metric tonnes of maize from farmers.
In 2020, Admarc and NFRA shared the SGR replenishment funds to procure the maize. However, in 2021, Admarc was given the whole amount and procured the maize for NFRA on behalf of the government.
This year, the government has followed the 2022 procedure where the ministry directed all the funds to NFRA to procure the SGR maize.
This is despite Admarc’s protest last year, arguing that that the decision will kill the corporation that the government ought to empower as it supports smallholder farmers.
RFRA is a government agency mandated to manage and maintenance of the strategic grain reserves thereby an important instrument for tackling food insecurity and providing emergency relief for vulnerable groups of the population.
Admarc on the other hand, is a government-owned corporation mandated to promote the Malawian economy by increasing the volume and quality of its agricultural exports, developing new foreign markets for the consumption of Malawian agricultural produce, and supporting the farmers.
In Malawi, maize is an important crop in the country’s economy and as part of the food component, contributes about 53 percent to the Consumer Price Index and an aggregate basket of goods and services that is used for computing inflation.
However, the country has been grappling with maize shortage following low production as well as a recent catastrophic Tropical Cyclone Freddy.
As a result, International Food Policy and Research Institute (IFPRI) reported that maize retail prices in the country hit a record high in the period between January and February 2023 underpinned by low production and acute shortage in the state’s reserve stocks.
However, the April harvesting season revived the country’s hope after maize prices eased by an average of 19 percent following a bumper harvest.
According to All Africa, there were concerns that the government was delaying the maize purchase exercise giving room to vendors to penetrate the market, therefore, the decision by the government to release funds is timely.