Bulawayo, Zimbabwe
May 2, 2007
Source:
IRIN News
The Zimbabwean government has raised the price of scarce
maizemeal by almost 600 percent to stimulate production, but a
consumer watchdog is warning that it will make the staple food
unaffordable.
Agricultural minister Rugare Gumbo announced this week that the
retail price for maizemeal would go up by 570 percent to support
a 680 percent increase awarded to maize farmers.
The official Herald newspaper quoted Gumbo as saying that the
state monopoly, the Grain Marketing Board, would now pay maize
producers Z$3 million (US$120 at the parallel market exchange
rate) per metric tonne (mt), up from Z$52,000 (about US$2) per
mt, and sell grain to millers at Z$3.1 million (US$124) per mt
to "stimulate maize production to levels of national sufficiency
in terms of food security".
As a result, the official retail price of a 5kg bag of maizemeal
soared from Z$3,200 (US$0.12) to Zim$21,874 (US$0.87), an
increase of 583 percent. This is in line with maize prices on
the parallel market, where the commodity is readily available.
"For the price of maizemeal to go up by such a high percentage
is unheard of," said Comfort Muchekeza, a spokesman for the
Consumer Council of Zimbabwe (CCZ).
"It spells doom for consumers, who are already battling with
inflation of 2,200 percent and a [monthly] consumer basket of
about a Zim$1 million (US$40). It's actually a blow that will
send many consumers tumbling, especially considering that wages
are low and prices of other consumables continue to soar almost
on a daily basis."
Most families with six members consume a 20kg bag of maizemeal
every month, which will now cost Z$78,988.57 (US$3.15) instead
of Z$11,800 (US$0.47), while average salaries range between
Z$200,000 (US$8) and Z$500,000 (US$20) a month.
"The increases will definitely push up the required amount of
money a family needs to spend on basic foodstuffs per month. We
realise that many families are living in abject poverty and
could barely even afford the previous prices," Muchekeza added.
Gumbo defended the increases, saying they were meant to cushion
farmers and cover a deficit that has sent alarm bells ringing in
the southern African country.
"We know the bearing it has on consumers, but there is
absolutely nothing we can do about it. We realised, after
increasing the producer price for maize grain, that there was
need to balance the scale by increasing the price of maizemeal,"
Gumbo told IRIN.
"We hope farmers will take advantage of this lump-sum offer to
venture into maize grain production to feed the country. We are
currently facing a deficit, and for the perennial shortages to
go away we need to empower our farmers."
Consumers told IRIN the increase in the price of their staple
food was a slap in the face. "I earn less than Z$200,000 (US$8)
and have a family of five. The current food basket stands at
about Z$1 million (US$40) and already I have difficulties
providing for my family. Now that maizemeal costs this much, I
really don't know how we will survive; now we need the grace of
God," said Nonsikelelo Dube, in Bulawayo, Zimbabwe's second
city.
Economic analyst John Robertson concurred with the CCZ and
consumers, pointing out that while the increases were a windfall
for farmers, they were a nightmare for consumers.
"Obviously farmers are happy, but what is most apparent is that
consumers are the most affected. The increases in both grain and
maizemeal will help push inflationary pressures that will lead
to more suffering for the masses," he told IRIN.
The government has already declared 2007 a drought year and the
United Nations Food and Agriculture Organisation and the World
Food Programme are undertaking an assessment of the country's
agricultural system and food aid requirements.
This year's maize harvest is expected to be less than 600,000mt,
only about a quarter of the country's annual national
requirement of 2.4 million mt. |
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