THE Ministry of Agriculture said yesterday that maize price in some parts of the country had dropped to between 200/- and 170/- per kg in the past season.
Following the situation, the National Food Reserve Agency (NFRA) purchased a kg of maize at high price of between 350/- and 500/-.
"The agency purchases maize depending on the current market price in respective areas. The price is below average in some parts of the country, forcing NFRA to buy grains at above average price," the ministry stated in its response to Nkasi South MP Desderius Mipata (CCM).
According to the MP, production costs for an acre of maize is about 700,000/- whereas farmers expect to get 17 bags of maize.
Mr Mipata said production costs were too high compared to prices offered by NFRA.
"Most of the maize farmers are not reaping enough from their sweat. The government issued an indicative price for the crop-380/- per kg which is still low compared to actual investments in farms," noted the legislator.
"Mr Speaker, the price used for the 2018/19 season purchase is based on the market price of maize. The price also took into account other costs that farmers incur in production, thus making the price used by the agency higher than all other buyers in the markets of Tanzania at present."
However, the ministry insisted that the indicative price had taken into consideration all production costs.
It said maize price in the 2018/19 season was also determined by the market.
"The main criteria used to set maize price is based on production and market demand in a particular period.
Prices are not set depending on production costs," said the ministry, adding some farmers were still using traditional farming methods, thus they ended up earning low crop yield.
When purchasing maize from farmers, NFRA pays various crop levies such as the produce cess in accordance with the Local Government Authorities Finance Act, 1982.
The ministry said the grains purchased each harvesting season depended on the agency's capacity to store maize and actual budget set aside for the procurement of reserve food.
The agency's current food storage capacity is 251,000 tonnes countywide. NFRA purchases less than 2 per cent of the excess food produced in the country.
