JOHANNESBURG, 18 July (IRIN) - Zimbabwe's
slapping of price controls this week on maize is likely to push farmers
away from growing the staple next season, when President Robert Mugabe
faces a highly-charged election battle, economists told IRIN.
Concerned over a maize shortfall of 500,000 mt and the impact on prices in the second half of this year, the government on Monday reintroduced the monopoly of the state-run Grain Marketing Board (GMB) over the purchase of maize and wheat. As sole purchaser, the GMB has set its maize buying rate at Zim $7,500 per mt (US $136). In record sale volumes on the open market last week ahead of the expected legislation, maize was selling at Zim $9,329 per mt (US $170), the official 'Herald' newspaper reported.
"Many farmers will chose not to sell it rather than sell at that price," economist John Robertson told IRIN. "It's not enough to compensate for costs and a long way short of covering the cost of growing next year's crop." He said around Zim $11,000 was a more realistic price. Without that rate, Roberston added, "there will be a very serious drop in confidence among growers and that will very seriously affect next year's harvest. It is a matter of enormous concern." Zimbabwe's next harvest is May 2002.
But the government's immediate consideration is apparently short term and the cost of food to consumers. The price of maize meal and wheat flour has been controlled, to prevent a rise in food prices that in the past has sparked political unrest. According to the 'Herald', millers and private maize traders who ignore the new legislation have been warned that they will have their stocks confiscated or silos closed.
Zimbabwe's cereal harvest for 2000/01 is estimated at 1.57 million mt - down 27 percent on last years 2.15 million mt. Based on the forecast production, a combined FAO and government report in June estimated Zimbabwe's maize import requirement at 447,000 mt. "Given the substantial decline in gold production and the tobacco harvest, and much of the expected foreign currency earnings being pre-committed for fuel, other energy imports and the international debt servicing, government's ability to import maize is extremely limited," the report added.
With the IMF and key donors shunning Zimbabwe, the government will be forced into taking expensive loans to cover its import bill, analysts told IRIN. Meanwhile, inflation over the year has climbed to 64 percent, with economists predicting 100 percent by the end of 2001. The Zim dollar is already trading at close to 200 against the US dollar on the black market, as opposed to the official rate of 55 to US $1.
"What colours the whole thing is a presidential election taking place in the middle of a long deficit spell," Robertson said. "From December to June we will be eating imported maize, if we're eating at all. The imported stuff will be coming in at an enormously high price and greatly upsetting consumers. There will be a lot of social unrest and mileage gained by the opposition, and the government will react."
For more details see: http://www.fao.org/ES/giews/english/basedocs/zim/zimtoc1e.htm
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