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Citation Information

Type Working Paper
Title Who Gained and Who Lost from Zambia's 2010 Maize Marketing Policies
Author(s)
Publication (Day/Month/Year) 2011
URL http://econpapers.repec.org/RePEc:ags:midcwp:99610
Abstract
This paper examines the key features of the 2010/11 GRZ maize marketing policies and their income distributional effects on various stakeholder groups. Findings: First, the FRA announced a price of K65, 000 per 50kg bag on May 1, 2010 which was equal to import parity after adding own market price and costs. Second, FRA set purchase targets that were progressively increased during the course of the season as it became clear that FRA?s original purchase targets would not be sufficient to absorb the majority of the marketed surplus and therefore would do little to lift maize market prices. Moreover, much of the FRA?s maize is at risk of spoilage due to inadequate access to storage facilities and poor prospects of offloading Zambian maize on regional export markets. Second, despite the record maize harvest, the majority of Zambian smallholders did not produce a maize surplus in 2010. Third, because the FRA set its maize buying price at import parity, millers could obtain maize more cheaply from South Africa than from the FRA unless it relied on the Zambian Treasury to subsidize the FRA’s sale price. Key elements of the proposed alternative policies are: (i) FRA maize purchases and sales triggered when market prices fall below and rise above pre-established floor and ceiling prices, respectively; (ii) consistent government policies with respect to private sector exports (e.g., by setting and respecting an export quota); and (iii) other strategies to create a more enabling environment and build capacity for private sector participation in exports.

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