Maize meal controversy

Zimbabwe enters the second week of a maize meal production stoppage, divergent opinions are being expressed over the government’s economic strategy. While an analyst close to the government accused the country’s three major millers of “operating as a cartel”, an industry source condemned the authorities for “wanting to make business decisions that are unsustainable”. The analyst told IRIN that the 62 percent price rise demanded by the millers last week would mean that “people who don’t have money won’t be able to afford basic food stuffs.” She added: “The government is trying to keep prices down but they feel that the cartel is trying to undermine the economy.” Meanwhile, the industry source told IRIN on Tuesday that the macro-economic fundamentals in the country are not sound and need to be seriously addressed. “The government wants to make business decisions for industry,” adding that business cannot operate “like a welfare agency.” “If government wants food to be cheap, they must subsidise it,” the source said. “The government must remove price controls and let millers get on with their business.” He added that the millers were awarded a 19.2 percent rise in their retail price 18 months ago, but inflation has since rocketed and the state-owned Grain Marketing Board this year increased the price of maize grain to the millers by 63 percent. “For 18 months now the millers have been subsidising the consumers, which proved to be unsustainable, leading to last week’s decision to stop production.” On whether an increase in the price of maize meal would not lead to food riots as happened last year, the source said: “Already 74 percent of consumers who use maize meal don’t buy the product from the three major millers. They buy their maize from small farmers and take it to hammer millers for grinding. The price increase will, therefore, not affect the majority of consumers.”