The Zimbabwean government has increased the producer price of maize, one of the country?s most important staples. The move is intended to encourage farmers to grow more for the state-owned grain marketing board.
The state will now buy a ton of maize at 130 thousand Zimbabwean dollars up from the previous price of 28 thousand. The price for wheat, which was bought for 70 thousand Zimbabwean dollars, will now double.
The new prices were announced 26 March by Joseph Made, the Minister of Lands, Agriculture and Rural Resettlement.
The minister said the increase is not expected to affect the consumer price of maize meal.
Commercial farmers say the new price structure is good news George Hutchson is the chief executive of the Oil Seed, Grain and Cereal Producers' Association.
He says the move creates an incentive for farmers and says maize will now compete favorably with other crops.
Economic observers say the current food shortages in the country can be attributed in part to low producer prices and government controls. But they say the new prices should be able to encourage farmers to grow more maize and sell it to the state-owned grain marketing boards.
The boards, in turn, sell the commodity to millers at prices already subsidized by the state. Recently, government held discussions with farmers? associations at which the issue of producer prices was discussed.
The government of President Robert Mugabe says the new producer prices are part of its economic recovery program. It seeks to overhaul the entire economic system by engaging both the business and the labour communities in discussions.