Mealie Meal politics
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I have heard so many pronouncements on how mealie prices will stabilise due to potential higher maize production in the next farming arising from increased maize price paid to farmers which is expected to incentivise farmers to grow more maize in 2023/2024 season.
The point which is being missed is that the high mealie meal prices currently prevailing is not a function of supply and demand. The current prices are driven by high production costs for millers to produce mealie meal because the price of maize which is the single most input to mealie meal production has gone up. So even if production of maize grown by farmers is doubled the cost of production will remain the same as long as the maize price paid to farmers remains at the the same level.
To reduce the price of mealie meal we need interventions across the mealie meal production which addresses the farmer and the millers.
The cost of maize production needs to reduce by bringing down cost of inputs such as fertilizer and increasing production yield efficiencies per acre through mechanisation and providing technical support to farmers through extension officers.
This will result in reduced cost of production per tonne or 50kg bag of maize than presently is the case.
Then you can sale maize to millers at a reduced costs and consequently, reduce the price of mealie meal to the end consumer.
However, government has put themselves in a prisoners dilemma. Is it practical that the current maize prices to farmers can be reduced once the efficiencies I have addressed above are achieved? It is highly unlikely that farmers will accept a price lower than the current price next season.
So the only real possibility is that production increases and export excess maize and introduce mealie meal prices subsidies.
Otherwise I do not see mealie meal prices going down other than through government subsidies.
This is not a supply and demand issue, but an issue of high cost of maize production.
Fred M’membe
President of the Socialist Party
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Mealie Meal politics
The point which is being missed is that the high mealie meal prices currently prevailing is not a function of supply and demand. The current prices are driven by high production costs for millers to produce mealie meal because the price of maize which is the single most input to mealie meal production has gone up. So even if production of maize grown by farmers is doubled the cost of production will remain the same as long as the maize price paid to farmers remains at the the same level.
To reduce the price of mealie meal we need interventions across the mealie meal production which addresses the farmer and the millers.
The cost of maize production needs to reduce by bringing down cost of inputs such as fertilizer and increasing production yield efficiencies per acre through mechanisation and providing technical support to farmers through extension officers.
This will result in reduced cost of production per tonne or 50kg bag of maize than presently is the case.
Then you can sale maize to millers at a reduced costs and consequently, reduce the price of mealie meal to the end consumer.
However, government has put themselves in a prisoners dilemma. Is it practical that the current maize prices to farmers can be reduced once the efficiencies I have addressed above are achieved? It is highly unlikely that farmers will accept a price lower than the current price next season.
So the only real possibility is that production increases and export excess maize and introduce mealie meal prices subsidies.
Otherwise I do not see mealie meal prices going down other than through government subsidies.
This is not a supply and demand issue, but an issue of high cost of maize production.
Fred M’membe
President of the Socialist Party
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