Who Gained and Who Lost from Zambia's 2010 Maize Marketing Policies?

Zambia's record-breaking maize harvest of nearly 2.8 million metric tons (MT) in 2010 is a major achievement and a testimony to what input subsidies, output price incentives, and favorable weather can do to elicit a major supply response. Maize-growing smallholders harvested more than in previous years and so have more to eat. Public markets are currently well stocked with maize grain, to the benefit of urban consumers and maize-buying rural households. Farmers who were able to sell their crop to the Food Reserve Agency (FRA) at K65,000 per 50-kg bag, a price well above market levels, have clearly benefited from the bumper crop and FRA‟s involvement in maize marketing. The FRA‟s high buy price and purchase of nearly 900,000 MT of maize are also likely to have put upward pressure on market prices for maize. As a result, farmers who sold maize to private sector buyers may have benefited indirectly from the FRA‟s activities. However, the policies adopted by the Zambian government (GRZ) to handle the 2010 maize bumper crop have produced both winners and losers. This paper examines the key features of the 2010/11 GRZ maize marketing policies and their likely income distributional effects on various stakeholder groups: large-scale farmers, three categories of smallholder households (net sellers of maize, net buyers of maize, and those that neither buy nor sell maize), urban consumers, millers, traders, and government. We then propose a set of alternative policies GRZ could use to manage future maize bumper crops and explore the likely distributional effects of these policies on the various stakeholder groups.

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FSRP Working Paper

 Record created 2017-04-01, last modified 2017-08-25

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