Millers warn of food shortages

Zimbabwe’s millers have threatened to stop producing the national staple maize meal unless the government allows them a 60 percent hike in its retail price, news reports said on Tuesday.

The millers complain they are being driven out of business by the government’s attempts to control the politically sensitive maize meal price.

They point out that the state-owned Grain Marketing Board (GMB) this year increased the price of maize by 63 percent, from an equivalent of US $79 per tonne to US $129. But the millers were last week allowed only a 20 percent maize meal price increase, with the promise of another 20 percent in September. The millers have demanded an immediate 61 percent hike.

Zimbabwe is struggling with inflation and interest rates of over 50 percent. In protest over price controls, imposed after food riots in January 1998, small-scale millers outside the capital Harare stopped production at the beginning of the month and have been accused of hoarding by the government.

According to economist John Robertson, at the heart of the problem is the government’s “interference with prices over the last couple of years.” Farmers have responded to low maize prices set by the GMB by switching to more lucrative crops. The government has had to make up the shortfall with expensive maize imports, and needs to import close to 400,000 mt of maize this year to meet domestic consumption requirements.

“It is clearly unsustainable,” Robertson told IRIN. “The only way out is to recognise that higher prices have to be paid for maize meal.”

The response from workers is likely to be still higher wage demands. “Wage demands of 50 to 60 percent may sound extravagant, but workers need that sort of increase to put them back to where they were a year ago,” Robertson said. “Average wages in the country have slipped by 70 percent since 1990.”
He added: “On the employers side it’s unsustainable. They’ll find it hard to pay because their turnover has fallen and their costs have risen.”