The government has said price guidelines for contracted farmers are not a form of price control, as the private sector will ultimately determine the prices based on supply and demand dynamics.
During a question and answer session in the National Assembly, Vangelis Peter Haritatos, the Deputy Minister of Lands, Agriculture, Fisheries, Water and Rural Development, clarified the government’s position.
He explained that the prices announced by the government are the rates that will be used by the Grain Marketing Board (GMB) when purchasing produce from the contracted farmers.
The Deputy Minister asserted that the private sector will still have the flexibility to set prices that align with market conditions of supply and demand. He said (via NewsDay):
We are not about setting price controls or anything to that effect. What we do, essentially, we announce a price for whatever is contracted to the government.
So, when we talk of the Presidential Input Programme or National Agricultural Programme, these are related to the government.
For us, we feel it is right to announce pre-planting prices as well as producer prices so that at least our farmers understand before they even go into that crop.
During price guideline implementation will bring [together] all stakeholders, farmers, input suppliers and also contractors.
We are the buyers of grain. We need to announce the prices and the hope is that consumers and the public take that as a guiding price so that our farmers can get similar prices.
Last month, GMB announced a new payment structure for grains, which will see farmers receive US dollar payments upon delivery of their produce.
As reported by The Sunday Mail, maize and traditional grains will fetch US$390 per tonne, with sunflower seeds earning US$713 per tonne, up from US$696.
The producer price for soya beans has been set at US$620 per tonne, up from US$580.
In the past, GMB paid farmers a mixture of US dollars and local currency for their crops.
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