Govt buying Command Agriculture maize at $390/tonne only to sell it for $242.50/tonne

The government’s command agriculture program will increase the country’s budget deficit by nearly $120 million. This is due to the fact that the government will actually be losing money in buying the command agriculture maize.

The government, through the Grain Marketing Board (GMB), will be paying farmers $390 a tonne for the maize. Tafadzwa Musarara, chairman of the Grain Millers Association of Zimbabwe, told Reuters that his association had agreed to buy 800 000 tonnes of maize from the government for $194 million. This means that they will be buying each tonne of maize at $242.50 per tonne. At this price, the government will be losing $147.50 for every tonne of maize that it buys from the farmers and sells to the millers.

The 800 000 tonnes will cost the government $312 million to buy and when they sell it for $194 million to the millers there will be a deficit of $118 million which will be added to the national budget, which already has a deficit.

More: Reuters

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