Government subsidises mealie-meal prices

GOVERNMENT has stepped in to subsidise mealie-meal production and pricing so as to ensure the commodity is accessible to every household.

Essentially, Treasury is paying about RTGS$10 for every 10kg of mealie-meal sold by retailers as a way of cushioning the consumer. 

Grain Millers Association of Zimbabwe (GMAZ) chairperson, Mr Tafadzwa Musarara, revealed this in Gweru last week at a consultative meeting where he warned retailers against overpricing and profiteering.

He said millers, retailers and Government were partners of a social contract to avail products that benefit the consumers.

“Given the sensitivity of the products like mealie-meal and bread, it becomes a security issue and we don’t want the products to be a political narrative. We don’t want the products to have inflated prices for the purposes of profiteering so as to politicise the economic situation and send people on the streets to demonstrate,” said Mr Musarara.

“We don’t want our products to be politicised and used as a political weapon to drive a political narrative because Government is paying RTGS$1 400 per tonne to a farmer and selling to us for RTGS$466 per tonne. So, Government is subsidising about  RTGS$834 per tonne and that makes it about RTGS$10 for every 10kg of mealie-meal on the market. It is, therefore, not called for to have retailers charge in excess of about RTGS$19 per 10kg.”

Mr Musarara warned retailers against profiteering after it emerged some of the leading shops were overpricing grain products. He said such acts of sabotage had the potential of creating chaos in society.

“Mealie-meal and bread, these basic commodities are security triggers and Government is doing all it can to make sure they are available to the retailers at affordable prices. You might have your own shop and making thousands of dollars through profiteering, which can cause social upheaval. 

“The amount the people pay for a product must be justified. The French Revolution, the uprisings in Sudan were all started because of the shortage or high prices in these basic commodities,” he said.

Mr Musarara said millers and retailers should sell basic commodities at recommended prices with agreed mark-ups, to provide relief to low earning households. 

He said agreed mark-ups have been set for the five key products. For instance mealie meal mark-up is 10 percent, rice 17 percent, self-raising flour 17 percent, salt 10 percent and sugar beans 17 percent. 

Mr Musarara said mealie meal for example had increased from about RTGS$6 to RTGS$19 in a space of 60 days when incomes have not risen at that rate. He said that there was need for retailers and millers to work together through self regulation.

“If we fail to self regulate we will force the Government to come in and control the prices,” he said. GMAZ has also resolved that their products will not be sold in forex. 

GMAZ accounts for about 25 percent of products on the market and has undertaken to avail these at a cheaper price for the benefit of the consumers who are protected by the Government.

Consumer Council of Zimbabwe (CCZ) chairman Mr Phillip Bvumbe said price monitors will continue checking if prices of these five basic products were sold at the agreed price.