IAPRI against FRA proposed changes
THE proposed amendments to the Food Reserve Agency (FRA) Act are underpinned by assumptions that cannot be empirically justified, the Indaba Agricultural Policy Research Institute (IAPRI) has observed.
The institute said any attempt to adopt the amendments would have a telling effect on the commitments from the Government to reduce its involvement in the agricultural sector,
In its review of the proposals of the food reserve act chapter 225 of the laws of Zambia on the prosed move of FRA’s mandate from that of a strategic reserve institution to that of a trader and exporter in the market place, the institute noted that despite the apparent reasoning that the move will make agriculture private sector-led, transparent and predictable, the proposed amendments will take the country in the opposite direction.
The institute further argued that FRA’s move risked being another National Agricultural Marketing Board (NAMBOARD) experience which rendered the board to miserably fail to balance the two roles, leading to it being scrapped off.
“The proposed amendments to the FRA Act are deeply concerning. Taken, they move the FRA’s mandate from that of a strategic reserve institution to that of a trader and exporter in the market place, this flies in the face of commitments from the Government to reduce its involvement in the agricultural sector, and specifically maize markets. “The buzz words in all these documents is that agriculture will be private sector-led, transparent and predictable yet, the proposed amendments to the FRA act will take the country in the opposite direction.
“The FRA’s proposals are underpinned by assumptions that cannot be empirically justified. The proposals suggest that the FRA can both stabilise prices while at the same time become commercially viable,” reads the report in part.
The institute also noted that it was wrong to assume that FRA would continue raking in huge profits as a result of its departure from its current mandate due to fluctuations in agricultural productivity as determined by weather patterns.
Meanwhile, IAPRI has proposed, among other things, that as an initial step towards having an effective stabilisation policy, Government should review the country’s strategic grain reserve requirement, including its size and procurement modalities.
It said in collaboration with stakeholders, Government should put in place clear trigger mechanisms for FRA grain purchases and releases for effective price stabilisation.
“To allay the concerns of the private sector about FRA’s future involvement, the government should revert to the original FRA mandate as set in the 1995 FRA act of maintaining strategic grain reserves for the country and confining the agency’s procurement activities in outlying areas of the country where the private sector finds it difficult to operate.