The Grain Millers Association of Zimbabwe sued the government for setting grain and soy purchase prices because it says the state policy will cause starvation.
The GMAZ and Zimbabwe’s Oil Seed Traders’ Association filed a joint constitutional application in the country’s courts 15 August challenging government’s right to set minimum prices, Tafadzwa Musarara, GMAZ chairman, said by telephone from the capital Harare today.
The minimum price, set on 8 August and backdated to April, will render all contracts void and violates Zimbabwe’s constitution, the association said. The government set the price for corn at $390 a metric ton and also regulates prices for wheat and millet. Corn price were $290 a ton to $350 a ton before the change, Musarara said.
“If contract farming is disenabled, as is the case now, corn production will be way below national requirement and serious food shortages for the staple crop will occur, which will lead to serious starvation and malnutrition,” Musarara said. Contract farming refers to output based on pre-season agreements between buyers and producers.
The law requires all companies and individuals buying grain to register with Zimbabwe’s Agricultural Marketing Authority for a $1,000 fee, he said.
“Zimbabweans who are in the informal business of rearing even 10 chickens, goats, pigs, beef or any other micro business will simply close down if forced to register,” Musarara said. The law will “over-regulate the day-to-day lives of millions of Zimbabweans who eke a living out of the grain value chain.”
Inflation
Raising the price of corn will create inflationary pressure and raise the prices of milk, corn meal, eggs and other foodstuffs by over 20 per cent, he said.
Zimbabwe, once the second-biggest corn exporter in Africa, suffered years of famine after President Robert Mugabe’s government in 2000 began seizing mainly white-owned commercial farms for redistribution to black subsistence farmers to make up for land appropriation during colonial rule.
Corn prices in the southern African nation began falling after farmers planted 18 per cent more of the crop before this year’s harvest, the Famine Early Warning Systems Network, partly funded by USAID, said 12 May.
Zimbabwe is expected to produce about 1.3 million tons of corn in 2014-15, up from 800,000 tons in 2013-14, according to the U.S. Department of Agriculture.
Bloomberg News edited by ESM
