01:57 am - Wednesday 21 November 2018

Malawi government set minimum prices for farm produce

By Amalawi - Wed Jan 16, 1:30 pm

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By Our reporter,

Malawi government has announced minimum prices for maize, rice, paprika and other crops to help farmers make informed decisions on types of crops they should grow in the 2012/13 agriculture season.

But Farmers Union of Malawi (FUM) president Felix Jumbe contended that setting prices is in conflict with market liberalisation principles which Malawi adopted in the 1990s.

He argued that in a liberal economy, prices are determined by market forces and minimum prices do not work.
“Malawi will face huge challenges in implementing the minimum price policy. It is inconsistent with free market concept for a country to impose minimum prices for commodities,” said Jumbe

Maize not affordable by average Malawians

Maize not affordable by average Malawians

But Economics Association of Malawi (Ecama) executive director Nelson Mkandawire argued the minimum prices are on a lower side, saying this may encourage some farmers to smuggle their produce to foreign markets where prices are better.

“The prices are low and government should revisit them. These prices are not realistic. This is why some farmers shun the local market opting for export markets. It is wrong to set minimum prices because Malawi embraced a free market economy,” said Mkandawire.

The Ministry of Agriculture two weeks ago released minimum prices to encourage farmers make proper decisions.
Maize, according to the ministry, is expected to sell at K60 per kilogramme from K35 per kilogramme last year whereas rice paddy is now at K110 per kg up from K60 per kg last year.

Price of polished rice has been put at K250 per kg from K90 per kg last year; wheat is now at K150 from K100, paprika grade A is at K350; chillies grade A at K450 per kg and dried cassava is at K60 from K34 per kg last year.

The ministry’s spokesperson said the minimum prices will help famers to take good care of their crops because each agricultural crop is variable as long as it is good.

“Marketing is about the buyers and farmers; hence, the ministry’s role is to ensure that all players along the value chain are properly sensitised, especially farmers. This early announcement will ensure that information trickle to farmers in time before they harvest their crops,”.

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