June 28, 2019 / 3:04 PM / 22 days ago

Zimbabwe moves to keep a lid on maize prices after drought

HARARE, June 28 (Reuters) - Zimbabwe has banned farmers from selling maize to anyone other than the state Grain Market Board as the government moves to keep prices of the staple crop down after a severe drought cut output.

Under regulations published on Friday, any individuals or companies that buy maize directly from farmers could face up to two years in jail. The Grain Marketing Board will be the sole buyer of the crop and will then sell it to millers.

The southern African nation expects its maize output to drop 54% this year, to 776,635 tonnes, following the drought, which a U.N. agency says will leave 5 million people in Zimbabwe needing food aid.

In an official notice, the minister of lands and agriculture also banned farmers or any maize producers from transporting more than 250 kg of the crop from one area to another. Failure to comply would result in police seizing the maize.

“No person or statutory body or company or entity shall buy or otherwise acquire any maize from any farmer or producer otherwise than through the Grain Marketing Board,” the notice said.

Those who breached the regulations would be fined three times the value of the maize “or eight hundred (Zimbabwe) dollars ($121), whichever is greater, or in default of payment, to imprisonment for a period not exceeding two years.”

The government early this month doubled the producer price of maize to ZW$1,400 per tonne.

The new regulations immediately raised concerns that the controls will create a black market for maize, which will lead to shortages, and that the grain agency will likely sell at subsidised prices at a time when the government has said it wants to remove subsidies in the economy.

“It’s a very retrogressive measure, straight out of the manual on how to create shortages and price distortions,” an agriculture expert, who declined to be named, said. ($1 = 6.6 Zimbabwe dollars) (Reporting by MacDonald Dzirutwe; Editing by Susan Fenton)

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