Increase in maize prices will likely benefit farmers, but…

21Nov 2019
Dar es Salaam
The Guardian
Increase in maize prices will likely benefit farmers, but…

AGRICULTURE ministry experts and policy makers are pondering what to do about maize prices, especially in urban areas.

The ministry has expressed concern as the prices have shot up once again with a 100-kg bag now going for well up to 107,000/-, up from roundabout 65,000/- last year.

This situation had led to the conducting of a couple of surveys on food security so as to compare their results on the basis of sampled areas and findings, assuming that their methods would be similar.

A deputy permanent secretary raised some pertinent issues when launching discussion on the surveys, challenging researchers to find out why prices were rising despite bumper harvests.

As the DPS called for extensive discussion on why maize prices have kept sky-rocketing despite there being substantial reserves, the real issue lay underneath. It was likely that there is demand beyond our borders.

He remarked that people living in urban areas had started complaining about the price hikes, but would not fall into guessing the bad answer.

While prices have led to pervasive concern, it may well be that a more likely factor behind the problem is that at the middle of the dry and warm season prices usually shoot up. So, with prices already rather too high, the situation could become all the more unmanageable at the turn of the year.

The point is that if the prices continue rising, the government will have to find answers, which was a key part of the remarks by the DPS, which should serve to prepare mindsets for that situation.

Still he pointedly rejected suggestions that the government should move to close territorial borders to control the sale of Tanzanian maize outside the country so that its local prices diminish, as the country just could not keep closing and opening the borders.

True, the issue is not exports as such but rather how to control the prices, for instance if there are artificial shortages in view of sharper rises at the turn of the year. It is this latter point that investors will be waiting for, as intermittent border closures ruin agro-sector investment prospects.

It is likely that this point will elicit supportive elucidations from researchers from the likes of Tanzania’s own Economic and Social Research Foundation (ESRF) and the Alliance for a Green Revolution in Africa (AGRA), who conducted the two studies.

The background for conducting the studies was widespread opposition to exports of maize last year, which is habitual among some administrators.

These think that planting maize is a duty for farmers, while scarcely paying attention to price swings as a determinant of investment decisions. Rising maize prices stimulate investments in the crop, and eventually prices drop.

Ministerial data show that maize production in Tanzania stood at 6.2 million tonnes during financial year 2017/2018, up from 6.6 million tonnes the previous year.

This sort of diminishing output is surprising in that there was no drought during this period except for some areas, but there may have been no price incentives.

In that case, witnessing price hikes would mean that more maize would be grown the following year, or other crops like cassava would have a greater uptake.

Thus, while border closures may touch off or precipitate price stability, they could also reinforce stunting in the agricultural sector stunting, which would be a boomerang effect.

This points to the need to exercise as much caution as we can muster in dealing with the delicate issue of the supply, distribution and pricing of foodstuffs.

Top Stories