The Grain Marketing Board (GMB) will no longer sell grain to millers at subsidised prices because the programme was open to abuse and did not benefit the final consumer.
GMB has over the years been selling maize and wheat to millers at subsidised prices, and expecting that consumers will benefit in the form of lower prices.
The programme has been open to abuse with some unscrupulous business people defrauding Government by reselling the grain to GMB for quick profits.
In his 2020 national budget presentation, the Minister of Finance and Economic Development, Professor Mthuli Ncube, scrapped the subsidy programme, saying it is a waste of taxpayers’ money because the effect was not being felt by the final consumer.
“We noted with concern that government was losing millions of dollars by sustaining a grain subsidy programme at the GMB which was not benefiting the people. We have thus scrapped the arrangement and GMB will buy maize from farmers and sell maize to millers at market rates,” he said.
Wheat Board Member, Mr Givemore Mesoemvura said the move signals the return to market basics where companies need to implement sound policies for them to remain viable and not to survive on arbitrage opportunities.
“It is a welcome development as it eradicates the inefficiencies because the millers would benefit from arbitrage opportunities in the subsidy programme. You have other millers who were just reselling the grain back to GMB immediately after they had purchased it,” Mr Mesoemvura highlighted.
In the event that prices of basic grain products rise as a result of scrapping the subsidy programme, government will introduce a voucher system for vulnerable households.