Socialist Party President in Zambia, Dr Fred M’membe, has raised concerns about the state of the country’s strategic reserves, particularly those for maize, and the implications for food security in the country. In a statement issued recently, Dr M’membe emphasized the importance of strategic reserves as contingency holdings to mitigate against unforeseen occurrences or catastrophes.
Dr M’membe explained that when “business as usual is disrupted” by unplanned incidents, strategic reserves are used to minimize, not eliminate, the negative impact on the affected markets while actions are being undertaken to restore the status quo. He noted that some critical reserves held in Zambia include fuel, Bank of Zambia international reserves, and maize reserves.
According to Dr M’membe, the government buys strategic maize reserves during the maize marketing season, which are held by the Food Reserve Agency (FRA). In the past, the government bought 500,000 metric tonnes of maize out of the total maize production of 3.6 million metric tonnes in 2020, which translated to less than 20 per cent of total production at FRA dictated price per tonne.
Dr M’membe explained that the private sector, including milling companies for the production of stock feed, maize meal, and other products, absorbs the 80 per cent remainder of the production at prices dictated by the market, which is often higher than the FRA price, including export prices.
“The end result of this policy intervention is that we will deplete the food reserves to zero, and when a real natural calamity arises, we will have no fall-back position, and the country will be in serious trouble,” Dr M’membe said.
He went on to criticize the government’s recent release of maize from the FRA reserves, stating that it was a fallacy to assume that this could bring down prices, given that the stock released is insignificant to have a real price impact, considering that 80 per cent of the maize stock is in the hands of the private sector.
“This policy intervention has failed in previous governments and only goes to enrich the millers who will buy the maize at a discount from FRA and still sell at market prices. This policy measure is also unsustainable as the government does not have sufficient stocks to continuously provide market intervention on account of price increments,” he said.
Dr M’membe called on the government to aggressively increase maize production by providing a conducive environment at the policy level to incentivize farmers to grow maize. He also suggested increasing the strategic reserve ratio to at least 50 per cent of maize crop production to have an influence in the market.
Furthermore, he suggested direct subsidies on mealie prices, stating that this would not cause any harm as it is the country’s staple food on which the vulnerable depend. “Government should set up industrial milling plants to influence the performance of this market in the medium-term to have a real say in the maize market,” he added.
Dr M’membe urged the government to mechanize agriculture and move away from traditional hoe and ox-driven production methods by providing cheap, subsidized farming equipment.