The Ministry of Agriculture said yesterday that maize prices at some parts of the country dropped to between 200/- and 170/- per kilogram in the past season.
Following the situation, the National Food Reserve Agency (NFRA) purchased a kilogram of maize at higher prices of between 350/- and 500/-.
“The agency purchases maize depending on current market price at respective areas, the prices were below average in some parts of the country forcing NFRA to buy the grains at above average price,” the ministry stated in its response to a question by Desderius Mipata—Nkasi South (CCM).
According to the Member of Parliament, production cost for an acre of maize is approximately 700,000/- whereas farmers expect to get between 17 and 17 bags of maize.
The prices also took into account other costs that the farmer incurs in production thus making the prices used by the Agency higher than all other buyers in the markets of Tanzania at present.
However, the ministry insisted that indicative prices have taken into considerations all the production costs. It said maize prices in the 2018/2019 season were also determined by the market.
“The main criteria used to set maize prices is based on production and market demand at the particular period.
Prices are not set depending on production cost,” said the ministry adding that some farmers are still using traditional farming methods thus harvesting below expectations.
When purchasing maize from farmers, NFRA pays various crop levies such as the Produce Cess in accordance with the Local Government Authorities Finance Act, 1982.
The ministry said the amount of grains purchased in each harvesting season depends on the agency’s capacity to store the maize and actual budget allocated for procurement of reserve food.
The agency’s current food storage capacity is 251,000 tonnes countywide. NFRA purchases less than 2 percent of the excess food produced in the country, hence need for the private sector to venture into the business.