Call for a subsidy policy

GOVERNMENT should urgently come up with a subsidy policy to guard against opportunistic tendencies by millers who buy maize from the Grain Marketing Board at subsidised prices and resell it to the same parastatal for more.

Zanu-PF legislator for Wedza North, David Musabayana, said this while contributing to Parliamentary debate following the announcement by Government last week that it had increased the producer price of maize from $726 to $1 400 per tonne.

Musabayana expressed concern that the gap between the producer price of maize and price at which the millers were buying from the Grain Marketing Board (GMB), has become a “bit big”.

This, he noted, creates arbitrage opportunities where some millers buy from the marketing board and resell to the parastatal for a higher price.

“We also need to move fast especially the Ministry of Finance and Economic Development, to come up with a subsidy policy to ensure that we protect value from our commodities like maize, soya and wheat. 

“I am saying so because the gap between the producer price of maize and the price that is sold to millers is now a bit big which is almost RTGS$1 000,” said the legislator. 

“This will encourage opportunistic behaviour where some millers may not mill the product but recycle it and resell to the Grain Marketing Board as a selling product.”

At present, the milling industry is buying maize from GMB at $726 a tonne with a 38 percent subsidy. 

The Grain Millers’ Association of Zimbabwe president Mr Tafadzwa Musarara would not be reached for comment yesterday as his phone was not being answered. 

Announcing the new price after Tuesday’s Cabinet meeting, Government said the maize producer price of US$242 per tonne must be paid in RTGS dollars but at the prevailing interbank market rate.

“So, we are calling upon the Ministry of Finance and Economic Development to move fast and come up with a subsidy policy that focuses on paying or crediting subsidies at the point of sale and not at input level,” said Musabayana.

Meanwhile, farmers have welcomed the new producer price of maize and anticipate using their proceeds to buy inputs for the next farming season as soon as they get payment for their deliveries to GMB.