Following the situation, National Food Reserve Agency (NFRA) purchased a kilogramme of maize at higher prices of between 350/- and 500/-.
“The agency purchases maize depending on current market price at respective areas, the prices were below average in some parts of the country forcing NFRA to buy the grains at above average price,” the ministry stated in its response to a question by Desderius Mipata—Nkasi South (CCM).
According to the Member of Parliament, production cost for an acre of maize is approximately 700,000/- whereas farmers expect to get between 17 and 17 bags of maize.
Mipata said the production costs are too high compared to the prices offered by NFRA.
“Most of the maize farmers are not reaping enough from their sweat, the government issued an indicative prices for the crop at 380/- per kilo which is still low compared to actual investments in the farms,” claimed the legislator.
Speaker, the price for the 2018/2019 season purchase is based on the market prices of maize. The prices also took into account other costs that the farmer incurs in production thus making the prices used by the Agency higher than all other buyers in the markets of Tanzania at present.
However, the ministry insisted that indicative prices have taken into considerations all the production costs. It said maize prices in the 2018/2019 season were also determined by the market.
“The main criteria used to set maize prices is based on production and market demand at the particular period. Prices are not set depending on production cost,” said the ministry adding that some farmers are still using traditional farming methods thus harvesting below expectations.
When purchasing maize from farmers, NFRA pays various crops levies such as the Produce Cess in accordance with the Local Government Authorities Finance Act, 1982.
The ministry said the amount of grains purchased in each harvesting season depends on the agency’s capacity to store the maize and actual budget allocated for procurement of reserve food.
The agency’s current food storage capacity is 251,000 tonnes countywide. NFRA purchases less than 2 percent of the excess food produced in the country, hence need for the private sector to venture into the business.