Challenge to Harare’s minimum prices

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Brian Latham Harare

THE GRAIN Millers’ Association of Zimbabwe (GMAZ) was challenging the government’s minimum prices initiative because it was problematic and would lead to food shortages, the group said yesterday.

GMAZ and Zimbabwe’s Oil Seed Traders Association had filed a joint constitutional application in the courts on Friday challenging the government’s right to set minimum prices, GMAZ chairman Tafadzwa Musarara said.

The minimum price, set on August 8 and backdated to April, would render all contracts void and violated Zimbabwe’s constitution.

The government initiative set the price for maize at $390 (R4 130) a ton and also regulates prices for wheat, rapoko and millet. Maize prices were between $290 and $350 a ton before the change, Musarara said.

The price of maize has fallen 10 percent this year on the Chicago Board of Trade.

“If contract farming is disenabled, as is the case now, [maize] production will be way below national requirements 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 agreements between buyers and producers.

The new law required 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 would “over-regulate the day-to-day lives of millions of Zimbabweans who eke a living out of the grain value chain”, he said.

Raising the price of maize would create inflationary pressure and raise the prices of milk, maize meal, eggs and other foodstuffs by more than 20 percent. – Bloomberg

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