ZNCC and the price madness
advantage of the September confusion and the festive mood to seek additional profit.
There is need to work together in interrogating the existing value chains. The major threat on the market today are middlemen who post huge margins than both the producer and retailer. We have experienced a bad value chain which has seen inconsistencies in the pricing culture.
The deeper analyst of value chains might not justify the price increases; we saw meat prices going up recently and even abattoirs could not explain the situation. However, there are cases where low production has exposed the final products to foreign currency realities.
For example, inasmuch as the whole of Sadc is a net importer of soya bean products, last season saw soya production at 30 000 tonnes for Zimbabwe, 119 000 for Malawi and 300 000 for Zambia. We are aware there is a programme to grow 700 000 tones of soya in the next seven years in Zimbabwe. Command soya bean production is definitely the way to go.
As the private sector, we are pushing for finalisation of the National Trade Policy. We saw noble policy interventions such as Statutory Instrument 64 being abused.
As business, we were supposed to do a proper audit or progress check regarding the impact of SI64. Some of the products which were put on the list could not be produced in significant quantities and this either created shortages or, at worst, a link or opportunity for smuggling. With SI122 in place, we continue seeing second-hand clothing at “Copacabana”, Mbare, Sakubva, Kudzanai Bus Terminus and many other places.
It cannot be business as usual as we continue to ignore such nefarious activities.
Lack of thorough research by both Government and the private sector created some of the shortages, hence recent price hikes. About five bodies govern the beef industry: the Department of Livestock and Veterinary Services; Rural District Councils; Agricultural Marketing Authority; Zimbabwe Republic Police; Environmental Management Agency and Ministry of Health and Child Care.
These Government departments are supposed to assist in developing the beef industry, but to the contrary, these have increased administration costs because of duplicate fees. In the end, all costs are passed on to the consumer and this ultimately raises the cost of meat. A one-stop shop for all processes required in the beef industry should be introduced.
As ZNCC, we are of the view that price controls cannot be an option whatsoever given the number of corporate tombstones we witnessed; notably during the price slash campaign of 2005. Such controls are not only limited to the goods market, but also currency markets given how Zimbabwe experienced acute foreign currency shortages when the then RBZ Governor, Dr Gideon Gono, began to fix the Zimdollar exchange rate to the greenback.
As espoused by President Emmerson Mnangagwa, we must allow market economy and enterprise to thrive and this can only take place without interventions to monitor prices. In the same vein, the Competition and Tariff Commission must be on alert to monitor price-fixing behaviour at this hour given the insatiable appetite by a number of market players to erode consumer surplus.
The message also extends to the RBZ where the bond note rate must be allowed to float than maintain parity with the greenback which we know is not sustainable. The price-monitoring function must not be a preserve of the National Competitiveness Commission. This will deepen buy-in from all the players.
Again, this can free the tension and mistrust associated with any investigation or monitoring exercise. In addition, given that the Commission’s predecessor is the National Incomes and Pricing Commission, it will be wise to try to ring-fence the new body’s role to purely competitive matters without extending a hand on pricing
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The legacy of the NIPC is damaging and our recommendation is for the NCC to avoid appearing like they are taking such a path because perception is reality.
On the beef industry, we feel the Ministry of Agriculture, Lands and Resettlement should consider crafting a Beef Industry Policy which governs the entire cattle value chain.
The policy should, amongst others, incorporate the following:
Direct and regulate the industry’s operations;
Streamline the various regulatory costs paid in the sector;
Focus on compliance encouragement and multi-stakeholder involvement to ensure the viability of the industry;
Clearly articulate how the regulating departments should interoperate; and Establishment of the one-stop-shop concept for various registrations, payment of fees and levies to lessen the burden on value chain players.
There is need for extensive farmer training programmes at district level so that farmers will be equipped with animal husbandry knowledge. This can be a better solution given the prevailing economic situation where government is constrained to recruit additional staff. Government should consider allowing private sector and NGOs to participate in foot-and-mouth disease controls (vaccines and education).
There is need for a downward review of the land tax for cattle farmers from the current US$5.
Generally, there is need for increased Government support in cattle production through pasture development, CSC resuscitation and re-engagement with the EU for market access.
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