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Grain millers must put food security before profits!

05 Jun 2020 at 19:19hrs | Views
The government, through a recent Statutory Instrument (SI) 119 of 2020, suspended customs duty on maize and flour for six months with effect from May 22 to November 21, 2020.

The SI allows "any and all entities" to import the commodities. This is a welcome development as it helps ease the maize meal shortage. The move is pro people and will help ensure that demand for maize meal is met.

It is disheartening to note that the Small to Medium Millers Association of Zimbabwe have bemoaned the long-term negative impact on the milling sector.

SMMAZ is behaving in an anti people manner, where they want to prioritise profits over food security.

Millers are failing to meet demand which has increased due to the Covid-19 pandemic and the lockdowns thereof.

SMMAZ should put the people first, and ensure that the food security question is adequately answered before seeking profits.

The Small to Medium Millers Assosiation of Zimbabwe stated that GOVERNMENT was yet to settle outstanding subsidy payments to grain millers, a situation threatening the viability of the struggling sector in the face of inflationary pressures.

While it is understandable that government is under pressure to meet its financial obligations, SMMAZ has to understand that the same government they are pressuring receives its funds from the people.

There has been little economic activity due to the Covid-19 lockdown.

SMMAZ as a business grouping should leverage on their strengths and help mitigate the food shortages without becoming a burden on government and the people.

The question then arises, does SMMAZ have the capacity to import their own grain?

Can SMMAZ help the people towards food security or they are after profit and nothing else.

SMMAZ wrote to the Minister of  Industry and Commerce. In this letter SMMAZ sought a review of regulations on the importation of maize and wheat. In the letter SMMAZ states that :

"We would also want to draw your attention to the fact that most SME millers, whose interest we represent, have had outstanding subsidy payments due to them by the government being eroded by inflation, with some payments currently still outstanding since February this year. SME millers have lost up to 60% of their working capital. "

"This is the sacrifice that your local SME millers have made to ensure support for the government's subsidy programme. In light of all of this, SI 119/2020 inevitably seems to suggest that this was all in vain. SI 119/2020, in its current form, inevitably deciphers the last rites no your local SME millers."

Small Millers are not being fair on their customers, neither are they being fair on the tax payer. We are currently in a difficult situation where everyone has to make do with what is available.

If SMMAZ and its members care about their market share then they have to create bankable structures that will allow them to service demand profitably without making life difficult for the ordinary man on the ground.

Mr Davis Muhambi argues that the importation of wheat and flour "should be limited only to business entities that are in the milling industry to safeguard the viability of SME millers, jobs and livelihoods, which this country will still need when the situation changes for the better."

No sir, your suggestion goes against the Zimbabwe is Open for Business mantra. SMMAZ needs to rework its business model and take into cognisance the prevailing macro economic factors. Market restrictions are definitely not good for business.

Government did well to review the Statutory Instrument in light of the demand and supply economics. SMMAZ wants a situation where only a few have access to import permits and this becomes the breeding ground for shortages and corruption in the Grain importation sphere.

Government should not grant the SMMAZ request, as the request will worsen food shortages. If SMMAZ have the capacity and resources then they should import their own grain and make profit out of it without hindering others from doing the same.

Pembe Ncube is the Secretary for Eye on Food Security Zimbabwe

Source - Pembe Ncube
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