Government is currently subsidizing the maize the Agricultural Development and Marketing Corporation (Admarc) is selling despite that the institution borrowed funds from commercial banks to finance the purchase of the grain locally.
Starting Monday October 24th Admarc has been selling maize at K250 per kilogram from K110 last year following a directive by President Peter Mutharika that the grain marketer should sell the grain at the same price they were buying.
Admarc purchased about 100,000 tonnes of maize from local growers at a cost of about K22.4 billion, which according to the institution’s Chief Executive Officer (CEO) Foster Mulumbe, was borrowed from commercial banks.
Initially, Admarc was expected to be selling the grain at K312 per kilogram inorder to incur profits to finance the loan interests, but government opted to subsidize the price to K250 to ensure Malawians are able to buy the maize.
The development means that tax-payers are being forced to pay for subsidy on the commercial maize, which initially was supposed to be sold at a profit.
“Our intended price, if we are to consider the bank interests, was to be at K312 per kilogram but government is giving us K62 per kg to ensure we sell the maize at the same price we were buying from growers,” revealed Mulumbe during a Sunday Round-Table program on Capital Radio.
A 50 kilogram bag which was last year, during the same period, sold at K5,500 is being sold at t K12,500 representing about a 127% increase.
The current price has attracted mixed reactions from consumers with opposition politicians arguing that it is not affordable considering the current economic situation.
However, Admarc Director of Operations Feckson Kantonga indicated that the current price is fixed, meaning there is no hope of it going down any time soon to accommodate the opposing views.
Mulumbe said the 100,000 is being stocked in about 1,200 Admarc selling points across the country ready for sale out of the required 400,000 metric tonnes.
“Last year during same period we procured about 56, 000 metric tonnes but this time around we procured the 100,000 metric tonnes locally, and we expect to buy the remaining quantity from outside the country,” added Mulumbe.
Mutharika revealed recently that government is yet to purchase the remaining 300,000 tones from Zambia, Brazil, and Romania and the negotiations already took place.
Meanwhile, government has started distributing relief food to about 6.5 million affected by the food shortage the country is experiencing.Follow and Subscribe Nyasa TV :