By Buumba Chimbulu
THE Indaba Agricultural Policy Research Institute (IAPRI) has warned that trade restrictions such as an export ban raises smuggling costs and create price instability, thereby punishing the consumer.
IAPRI research director, Anthony Chapota, explained that export bans lead to market to price instability as most traders took advantage of the business opportunities where the neighbouring commodities were on demand in other countries.
“There is no need to keep grain in the country when there is a surplus. When you introduce trade restrictions such as an export ban, which is the desire to protect consumers, leads to price instability. For instance, in 2016, prices for maize in Kitwe were going at K85 for a 50kg and K175 for the same quantity in Kasumbalesa,
“People see business opportunities during trade restrictions and they always find a way of taking advantage of it,” Dr. Chapota said.
He was speaking yesterday in Lusaka at a stakeholders meeting.
Dr. Chapota said there was need to open intra trade to avoid piece instability saying price volatility was induced by Government policies.
He has since called on Government to continue fostering effective private sector market development through predictable and stable policies.
“There is need to moderate price volatility trough a well-managed trade regime. Decisions are made late and unpredictable prices end up punishing the consumers,” Dr. Chapota said.
Dr. Chapota also said unpredictability deterred private sector from participating in the market.
He, however, observed that large grain investments facilitated movement away from spot to structured markets for smallholder farmers through models such as pre-financing, contract farming and forward contracts.
Dr. Chapota observed that some of the innovations in the market had benefitted farmers.