Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN) Food, Agriculture and Natural Resources Policy Analysis Network (FANRPAN)

Maize Marketing Policy Strategy For Swaziland
For The Ministry of Agriculture and Cooperatives in Swaziland
February 2003


The maize marketing study was undertaken by the Food Agriculture and Natural Resources Policy Analysis Network (FANRPAN) to assist the Ministry of Agriculture and Cooperatives to formulate a new maize marketing policy strategy in order to address maize marketing problems that were facing the country.

Maize is the staple food crop in Swaziland. The current marketing policy for maize suggests that the National Maize Corporation (NMC)as a statutory organisation is the sole importer of maize and buyer of last resort. The National Agricultural Marketing Board (NAMBOARD) which is also a statutory marketing organization, issues maize import and export permits. During the 2002 maize marketing season, private traders inundated NAMBOARD with applications for permits to import maize into the country, which is contrary to current policy, which has conferred a monopoly to NMC to be the sole importer of maize.

During the 2002 marketing season, maize prices increased to unprecedented levels in the Southern African region, and in Swaziland, locally produced maize was priced at more than the prevailing SAFEX prices. The increase in maize prices affected consumers very negatively, which brought about a shift in consumption patterns in favour of other cereals, such as rice. The millers were also faced with the high maize prices and the biggest miller, Ngwane Mills stopped buying maize from the National Maize Cooperation (NMC) and purchased maize directly from farmers and also applied for an import permit from NAMBOARD so that they could import cheaper maize than NMC could supply. Prior to this, millers bought most of their requirements from NMC. Incidentally Ngwane Mills is also NMC's biggest customer, buying about 80% of NMC's maize stocks. During this period, Ngwane Mills withheld an outstanding payment due to NMC for maize bought on credit, due to conflicts regarding the maize price. During the season the price of local maize went up to E2060 per tonne, with Ngwane Mills and NMC competing for local maize and constantly bidding higher prices to out compete one another.

The net result of this situation is that these organisations began to experience serious cash flow problems and at one point, NMC stopped buying maize from farmers, and an unsuccessful attempt was made to export maize to other countries in the region, due to the current policy that maize cannot be exported yet Swaziland is in deficit position. The organisations resorted to lawsuits in order to resolve some of the conflicts. NMC took Ngwane Mills to court for failure to settle the outstanding debt, and Ngwane Mills took NAMBOARD to court for failure to issue them with an import permit. The courts ruled in favour of NAMBOARD in the latter case, whilst the first case is still pending.

Quite obviously the whole maize industry is in a crisis due to the current policies and there is need to address the inherent conflicts that exist in the policies for maize production as they may continue in the future seasons. In light of this, FANRPAN engaged the services of two consultants to assist in formulating the country's maize marketing policy strategy that would provide a lasting solution to these problems.

The objectives of the study were to:

  1. Provide a brief background on the agricultural sector in Swaziland and an overview of its structure and performance in the last five years;
  2. Examine current policy strategies and institutional framework for the agricultural industry;
  3. Undertake a detailed analysis of the maize industry in Swaziland, including an overview of the key stakeholders (traders, producers, exporters, parastatals, consumers, transporters, processors input suppliers, etc), as well as major constraints affecting the industry.
  4. Following interviews with key stakeholders, provide recommendations for addressing short-term policy constraints and long term restructuring of the maize industry.
  5. Using the short term maize and farm input supply studies undertaken in other countries (South Africa, Malawi, Tanzania, Zambia and Zimbabwe) and the Oxford Policy Management study (1999), make a comparative overview of marketing policies and strategies in the region.
The methodology employed was to conduct a desk study of available documents on the maize industry and the agriculture sector and conducting interviews of the key stakeholders including the Ministry of Agriculture and Cooperatives. A draft report with recommendations was presented to a stakeholders' workshop on 19th February 2003.

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