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Maize farmers opt for informal markets with higher price

Business Section

By Faith Shongwe - SWAZI TIMES-28-Jul-2009

MBABANE – Despite the fact that the local maize producers are currently receiving the highest maize price in the Southern African Development Community (SADC) region, many have opted to sell their maize in the informal market.

This was an observation made by Chairman of the Swaziland Grain Producers Association Bhizeni Tsabedze, who said most of the farmers they had talked to had said the price offered in the informal market was better than the price currently offered by the National Maize Corporation (NMC).

The regional maize market price has in fact gone down to approximately E1 600 per metric tonne but the NMC is currently paying local maize producers E2 000 per metric tonne. This is the price that was offered last season. Tsabedze said; “We normally go around the country visiting our members and what we found during some of these visits was that most of the farmers were not too happy about the price offered by the NMC and as such, they are selling maize to the NMC at the rate they would sell in previous years.

They complained of the high input costs and have opted to sell their maize in the informal market,” Tsabedze said. Elaborating he said; “The farmers prefer to sell their maize in the informal market because they are currently receiving approximately E50 for 17.5 kilogram of maize yet the price is far lower elsewhere.”

Discuss

He also said a meeting was held last week with the Maize Marketing Advisory Committee to discuss the maize price, adding that there would be another meeting to fix the maize price soon.

“The only thing that makes it hard for local farmers to survive is the fact that we tend to buy farm inputs individually, yet in other countries such as South Africa, farmers come together and buy farm inputs collectively.

If we would do this, we could probably reduce the high costs,” he added. When reached for comment, NMC Chief Executive Officer (CEO) Sifiso Nyoni referred all questions to Technical Manager Sipho Dlamini.

Dlamini said they had not received any formal communication from farmers concerning the current offered price.

Offered

“The thing with most farmers is that they do not seem to be happy with any price that is offered to them. What they need to understand is that we buy maize from them based on the actual weight of what is offered by the farmers and as far as we are concerned, our market pays well. What we have come to realise is that the informal market tends to estimate the weight of the maize offered,” Dlamini said.

Maize producer prices are regulated and gazetted by government in order to protect farmers when market prices fall below the minimum gazetted price. The NMC or any maize purchaser is not allowed to purchase maize from local producers at a price that is below the government gazetted price.


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