ZAMBIA – COMESA Competition Commission Director and Chief Executive Officer Dr Willard Mwemba says that there has been an increase in mergers and acquisitions in the agriculture sector but also in anti-competitive practices.
The COMESA Competition Commission is a regional body established under Article 6 of the Regulations made under the Treaty establishing the Common Market for Eastern and Southern Africa (COMESA).
The Commission’s core mandate is to enforce the provisions of the Regulations with regard to trade between Member States and promote competition within the Common Market through monitoring and investigating anti-competitive practices of undertakings within the Common Market and mediating disputes between Member States concerning anti-competitive conduct.
COMESA has indicated that abuse of dominance after mergers and acquisitions by companies in the agriculture sector have impoverished farmers and led to high cost of food in the region.
According to commission, big traders often suppress the price to farmers because they are dominant. So even if the farmer chooses not to deal with them, the alternative is wastage, and since they will not get anything, they are forced to sell at this suppressed price.
During the 8th Business Reporters Workshop and 2nd Annual Press conference held in Livingstone Zambia from 19th to 20th August, Dr Mwemba said that some companies are colluding to get undue advantage in the agriculture sector.
“There’s a reason why companies merge. One of the reasons is basically to enhance efficiencies and synergies but sometimes the reason may also be to make sure that they gain a competitive advantage by becoming dominant” noted Dr Mwemba.
“But in the quest to do so, sometimes companies by the dominance that they acquire end up abusing it in terms of making it very difficult for other business players, especially in the agri-sector, to operate in that market.”
The companies are also making it very difficult for the farmer, who is the most important stakeholder in the agri-value chain, by giving them very low prices.
“Now you agree with me that when you’re giving a farmer very low prices what happens is you make farming unattractive and when it becomes unattractive the produce keeps on going low and low and you exacerbate poverty,” said Dr Mwemba.
It is necessary for COMESA to regulate the activities in the agri-sector, he added, underscoring the importance of the commission intervening so that the markets work efficiently for the benefit of the farmer, the consumer and that of the member states and the economy at large.
The COMESA Competition Commission is working together with the Competition Commission of South Africa and the Competition Authority of Kenya.
They have been engaged in the International Competition Network special project on food where these matters are being discussed at global level.
The International Competition Network (INC), which involves almost all competition authorities in the world that network. Has the objective of pushing the food and agriculture issue and its importance to be known at global level.
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