Changing grain markets call for new storage practices
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CTA. 1995. Changing grain markets call for new storage practices. Spore 58. CTA, Wageningen, The Netherlands.
Permanent link to this item: http://hdl.handle.net/10568/47105
Responsibility for the marketing and storage of maize is shifting from government-sponsored marketing boards to the private trading sector. This change has implications for producers, who may encounter new problems with the storage and marketing of...
Responsibility for the marketing and storage of maize is shifting from government-sponsored marketing boards to the private trading sector. This change has implications for producers, who may encounter new problems with the storage and marketing of the crop, and for traders. Assistance may be required during this transitional phase. Major changes are occurring to the way that maize is being marketed in many countries in sub-Saharan Africa. After several decades of influence over maize pricing, procurement, storage and distribution by government-subsidized grain marketing organizations, encouragement is being given to the private sector to participate in the maize trade. The reasons for the change are not charitable. Governments are having to face up to the high costs of subsidizing the grain sector and running parastatal bodies. Many marketing cooperatives too have found their access to credit for the purchase of grain curtailed because they have been unable to meet repayments on earlier loans. Likewise governments have been unable or unwilling to continue to underwrite the cooperatives' debts. Under structural adjustment policies, governments have been encouraged to divest much direct responsibility for grain marketing and to create an enabling environment for the private sector. The degree to which the private sector has been able to participate has depended very much on the commitment made and the strength of the economy. For example, Ghana has always had a very strong private sector, Tanzania has moved fast and government intervention has declined rapidly. Zambia has faced difficulties during its rapid transition phase, whereas Zimbabwe has been pursuing a more cautious and structured approach. Difficult decisions have to be made over how to ensure fair producer and consumer prices whilst reducing the subsidy to the marketing board. Pressure on farm storage The immediate effect for many small-scale farmers, with perhaps less than ten or twenty bags of maize for sale, has been that the guaranteed market has gone. Whereas previously, soon after harvest they were able to sell surplus grain locally at a guaranteed price and be fairly sure of payment, they now find that none of these factors applies. Sale at harvest may attract low prices, but if they forego immediate sale, they have to make provision for holding the grain for longer, with added risk of spoilage and loss. Traditional storage methods, whilst adequate for the safe-keeping of local varieties of grain, are less well-suited for the higher-yielding varieties of some grains, particularly maize, which are very susceptible to insect damage in store. Some donors consider that the solution to rural storage problems lies in the provision of a communal or village storage building. The intention is that surplus grain shall be stored in a safe place and marketed from there, or be sold back to the villagers. Unfortunately, such systems rarely seem to run well in practice; there are too many practical and operational problems to be overcome. Indeed, adverse experiences in much of Africa point to the inadvisability of recommending this as an option. Development of grain trading Until liberalization policies were implemented, there was little or no opportunity for legalized trade in grains and, with pan-territorial and pan-seasonal prices, there was no real inducement for a private trader. Now, in the enabling environment, opportunities exist. However, many entrepreneurs face initial difficulties: finding the money to purchase grain, the means of transporting it and ways of establishing storage facilities. In the short-term, the pattem of business tends to be one of rapid turnover of stocks, preferably supplying identified markets so as to avoid all interest, storage and doublehandling costs. Grain trading therefore tends to focus solely around transporting from an accessible area of surplus production to an identified market. Hopefully this pattern will change as grain trading becomes more established and competitive. The long-term technical solutions are not difficult, but in the short-term there are problems to be overcome. For the producer, advice on how, when and where to sell might seem unnecessary, but it must be sought by those inexperienced and uncertain of the free market. Seemingly simple things, like obtaining a grain bag or arranging transport to a market, prove very difficult to resolve when cash is required in advance and the producer has none. For many farmers, sale may not be possible and may not even be sought immediately after harvest, and some provision of extra storage will be needed. The options are to extend and improve the capacity of traditional storage or to find temporary storage for bags of grain, often inside the house. Use of either method for more than a few months will require treatment of the grain with insecticide. For this, safe and effective pesticides must be available locally. Those farmers who live a long distance from markets are now at a disadvantage because high transport costs will erode their profits. One option for them is to replace maize as a cash crop with alternative crops of higher value and lower bulk such as oil seed and pulses. Extension support In the past, extension services have struggled to provide adequate support to farmers for post-harvest matters. Usually there are few storage experts and their research and extension support activities are underfunded. Post-harvest extension is now faced with a new challenge and demands for additional information. Producers would like to know where to deliver their grain to receive the best price and they need to know when is the best time to sell. Some wait at the farm hopefully for a buyer; others wait at the nearest roadside, sometimes for days on end. Ministries of agriculture must meet these new demands to support the dynamic process of liberalization. The challenge for extension workers is to serve farmers' interests with appropriate marketing and storage advice. This requires a new initiative but, if successful, it will raise the impact of the service significantly. Further reading: Practical implications of grain marketing liberalization in Southern Africa proceedings of a Workshop held in Harare, Zimbabwe, 18-20 October 1994 edited by J Conway and P Tyler NRI, Central Avenue, Chatham, Kent ME4 4TB, UK