Zambian farmer Margree Chilwesa is faced with a hard choice--he either has to sell his last season's crop on the cheap or eat it.
"Last year the National Milling Company was buying my grade-A soya at K1,900 ($2.5)/kg and K1,600/kg for the standard grade. This year grade-A fetches only K1,450/kg" says Chilwesa, who is based in Kanakantapa on the outskirts of the capital Lusaka.
This year he has produced 21 bags--or 1.5t--of soya and 50 bags of maize on his 20 hectare farm. But he says the market is flooded with produce from hunger-struck Zimbabwe, where contract farmers grow crops on large commercial farms of over 300 hectares each. In contrast, Zambia's small-scale farmers have an average farm size of two hectares.
"Who would listen to you even if your produce on the small piece of land was of high grade? The politics of economics defeats you," Chilwesa complains. His problem is that the market price for his crops has plummeted--fuelled by cheap imports--but he lacks adequate warehousing facilities to store the produce until the prices rise.
It's a double whammy that has hit not just Chilwesa, but millions of other small farmers like him in Zambia and elsewhere in Africa. As poor countries have lowered their tariffs on imports--often on the advice of international financial institutions--their markets have been flooded by cheap produce from abroad. Zambia recently lowered its import duty on mealie maize--the staple by-product of maize--by five per cent.
Imported products can be cheaper because they are produced more efficiently on large commercial farms. But sometimes they are simply 'dumped'--or sold below the cost of production--by producers in wealthy countries where the agricultural sector benefits from massive government subsidies. Either way, the worst hit is the small farmer.
An important aspect of the problem is food security. Because maize is the staple in Zambia there is always the looming threat of a food crisis. It is a familiar scenario: cheap or dumped imports trigger a fall in prices, leading small farmers to consume their maize rather than sell it cheaply to mills.
Mill-owners, in turn, tend to hoard their stocks hoping for a price rise. In a country with pockets of drought and ridden with poor transportation, sourcing maize from remote areas is a further problem.
As a result, the protection of vital food crops was high on the agenda of trade ministers from many developing countries...