ZAMBIA – The Food Reserve Agency (FRA) of Zambia has increased its maize purchasing price to US$7.02 per 50kg bag for the 2018 crop marketing season, from the previously set US$6.5.
Lusaka Times has reported that this follows a directive from President Edgar Lungu to revise the price that was announced by FRA Board Chairman Joe Simachela.
The Board Chair in a statement reiterated the commitment of the agency to provide a suitable market for small scale farmers as a way to deliver on the National Strategic Food Reserve.
Established in 1995 by the then government, the agency replaced the operations of the former National Agricultural Marketing Board (NAMBOARD) and Zambia Cooperative Federation (ZCF) and plays a significant role in national food reserves.
According to him, setting market prices adheres to the principle of holistic consultation of the key stakeholders in the agricultural sector in the crop marketing chain from production to consumption.
In its strive to ensure consumer satisfaction, the agency pledged to purchase the maize within the confines of the 2018 budget allocation while mitigating possible risks that may rise to dissatisfaction on the price of the final product, mealie meal.
Soya will be purchased at US$13.03 while that of a 40kg of paddy rice will stand at US$7.02.
He further noted that FRA prices did not reflect government floor prices thus farmers could negotiate for better prices with other market players buying a larger quantity of the commodity.
FRA will enter the market on 1st August 2018.
Effects on market prices
FRA, the government food reserve marketing board impacts maize market prices as it buys maize at a price that typically exceeds wholesale market prices in major maize-producing areas.
The purchased maize is then exported or sold domestically at prices determined by market or administratively.
These activities are entirely attributed to an increase in the average level of maize market prices in Zambia and also a reduction in variability of the prices.