Business News of Tuesday, 23 July 2013
Tonnes of maize are wasting away in barns and warehouses in the Northern Region following a glut in the market.
The Minister of Agriculture, Kofi Humado has announced that the various government warehouses are full, and the National Buffer Stock Company has stopped buying from the farmers.
The situation is having serious consequences on the stakeholders in the value chain especially in the northern region.
Instead of a happy feeling after a successful crop season, maize farmers in the Northern Region are rather being punished for a good job done.
Their improved farming methods last crop season paid off, but a glut in the maize market has left many farmers impoverished, in debt and uncertain about this crop season.
The National Buffer Stock Company has also stopped buying, prices have plunged and their produce are stuck in their barns and various ware houses rotting away.
Farmers in Womale in the Tamale Metropolis and its environs are frustrated about the situation too. They say the National Buffer Stock Company’s buying price is way lower than the cost of production.
It is offering to buy the mini-bag at only GHC 25 but the farmers are not ready to lose after toiling under the baking sun for months.
Tamale based farmer, Alex Bokuma said: “If you want people to take agricultural serious we need to have guaranteed prices below which the farmers will not sell…. If the cost of the product in the market is too low to the extent that the farmer will not even break even, that is when you subsidize so that the farmer doesn’t lose, to give him a reason to produce for the following year irrespective of the glut in the market. At least the farmer will make the profit otherwise the risk is too high”.
This is not only affecting the farmers; owners of warehouses are also incurring massive losses.
Muhammed Sumaila who is the Operations Manager for Safbam Processing and Marketing Company stated that his company is on the verge of losing about GHC500, 000 if they do not dispose their current stock before harvesting for this season starts.
They support farmers to produce and then they buy from them and sell to industries down south and also provide storage facilities for farmers.
The company’s warehouse about 15 kilometres from Northern Regional Capital Tamale is full of maize waiting to be purchased.
The maize have been kept there since December 2012 and “we have been storing for three months. If you have eleven thousand mini bags of maize at a storage of 50 pesewa per month that we are going to lose. If this had gone the place would be empty and we would have rented it out again to other users for us to generate income. But the produce are still stuck in here plus the fumigation cost that we do,” he added.
According to him, anytime the farmers fumigate, its costs them between GHC500 and GHC2, 000.
The Agric Minister, Kofi Humado admitted how the surplus maize in the system is hurting farmers.
The Minister said they [government] have been forced to export maize this year. “We are constrained and they are still holding on their stocks and we have been encouraging other private sectors people to try and create more space. But what we have done in the last few months but done very carefully is also to start an export programme. But before we did it we had to do a lot of calculations to ensure we don’t go beyond a certain limit and then when may be suddenly rainfall patterns become unfavorable then we are caught off-guard. So we have made provision for exporting 200,000 metric tonnes of maize, so it is a desperate situation”.
As things stand now, there is no solution in sight. The buyers want to take advantage of the situation and buy cheaper than the farmers’ cost of production. And they are adamant.