HomePoliticsGovt blamed for thriving black market

Govt blamed for thriving black market

Augustine Mukaro/ Blessing Zulu

GOVERNMENT is fuelling speculative trading of maize and wheat on the black market by increasing prices of the two commodities to millers

by an average 1 600% last week, agricultural experts told the Zimbabwe Independent this week.

They said the Grain Marketing Board’s decision to raise the selling price of maize from $9 600 to $211 756 and that of wheat from $30 100 to $366 584 would force millers to seek alternative ways to obtain grain.

“Government has targeted the wrong end of things,” a miller said this week.

“It should have increased its buying price as a way of encouraging farmers to bring in more grain. This would have increased its intake as well as killing off the black market.”

An industry source said millers would respond to the new price regime by going directly to farmers and offering them slightly higher prices thereby cutting off the already thin delivery currently going to the GMB.

“Millers and other grain dealers will offer gate prices of between $150 000 and $180 000 a tonne which will entice farmers,” the source said.

The GMB pays farmers $130 000 a tonne and it takes up to two weeks for farmers to receive payment. Grain dealers buying maize straight from farmers usually pay cash on the spot.

Industry sources said millers had already written to the Ministry of Industry asking to revise the prices for both wheat and maize products.

“Millers want to increase the prices of mealie-meal and bread by between 700% and 1 000%,” a source said.

Bread went up to $1000 a loaf this week. Under the proposal, a 5kg packet of mealie-meal would jump from $380 to $2 925, the source said.

Blue Ribbon Foods managing director Mike Manga confirmed that they had submitted proposals for price reviews to the ministry.

“We have submitted our proposals and it’s premature to comment,” Manga said.

Opposition Movement for Demo-cratic Change Agriculture spokesman Renson Gasela said the new selling price of grain would dry-up deliveries to the GMB whose prices have always been lower than those charged on the black market.

“Farmers are already selling their maize to millers for $250 000,” Gasela said. “The price of $130 000 is far too low to entice a farmer to sell to the GMB. Prices of inputs have gone up such that the two cannot be reconciled.”

Instead of solving the prevailing food crisis, the increases have resulted in prices of basic commodities, particularly mealie-meal and bread, going up sharply this week.

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