CUTS Calls on Govt to Review Maize Subsidy

Diggers News, August 14, 2019

The Consumer Unity Trust Society (CUTS) has called on government to revise the maize subsidy to millers following the continued escalating prices of mealie meal on the market.

And Makumba has charged that some millers are taking advantage of Zambia’s high-cost market environment and making a profit even when their cost of production may not have gone up.

In an interview, Tuesday, CUTS country coordinator Chennai Makumba observed that the government needed to revise its subsidized maize policy to millers because prices of mealie meal had continued escalating despite cheaper maize being offloaded for a good period.

She noted that low-income consumers needed to be the main beneficiaries of subsidized maize usually made available to millers through the Food Reserve Agency (FRA).

“I think we need to rethink the way we are providing subsidized maize to the millers. Research that has been done by our colleagues, for example IAPRI (Indaba Agricultural Policy Research Institute), has actually indicated that even after providing subsidized maize to millers, we don’t see a reduction in the price of mealie meal that is provided to consumers, and as an institution, therefore, we have requested a rethink in the way we are looking to subsidize the price for particularly low-income consumers that are supposed to be benefitting from this particular initiative,” Makumba said.

“The government needs to see how it can essentially put the subsidized maize on the market in a much more broad-based manner because, largely, when you see the subsidized maize going to these millers, which is a very small group of millers, and so, it’s essentially not being made accessible across the country, particularly in areas where it’s most needed. Essentially, to see more being able to access subsidized maize so that consumers are able to access it in a manner that is most beneficial to them has always been our position on this issue.”

She said there was need to spearhead interventions that meaningfully contribute to the welfare of the low-income consumers.

“A number of different key stakeholders have already spoken to the fact that, as a country, we find ourselves in a very dire situation where people, particularly from low-income groups, are being significantly negatively affected by this experience in hunger and, really, we need to see initiatives that are able to actually meaningfully contribute to their increased welfare. So, I think it’s important to ensure that whatever initiatives that we are undertaking,whether it is to provide subsidized maize on the market, it actually results in a decrease in the price of mealie meal so that the low-income consumers can benefit from it because if they are not, ultimately, the beneficiaries of this subsidized maize will be the millers themselves who aren’t really who we should be targeting with this intervention to,” Makumba argued.

She charged that some millers were taking advantage to make profits.

“I think that whenever you see the price go up, unfortunately, there are some people who may be benefiting and this is definitely not to say that all millers, but there may be some millers that potentially may be taking advantage of this situation essentially because the market price has gone up and their costs could not have gone up to the same extent, but because they have realized that they can sell their product at this price… Therefore, they’re able to increase their profit margin and so some millers may be doing that,” explained Makumba.

The price of a 25 kilogramme bag of breakfast mealie meal has in the past one month been trading as high as K125 in some parts of Lusaka from around K70 the same period last year.

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