President Lazarus Chakwera has come out to justify his decision to subsidize maize prices at ADMARC.
Recently, the produce marketer opened up its markets and announced it will be selling the grain at a subsidized price of K160 per kilogram.
This has turned economic heads, as it entails that ADMARC would be selling at a loss, because it bought the grain at K200 per kg from growers using a loan.
ADMARC has itself been struggling financially lately and asked for the government bailout.
But addressing the nation last night, President Chakwera disclosed that the move is aimed at cushioning those who are losing income-generating activities due to the Covid 19 pandemic.
“Although this may incur financial losses on our part, it will ensure that those who are losing income-generating activities under the current pandemic conditions and state of national disaster are guaranteed food at an affordable price,” said Chakwera.
In most cases at such a time private traders make a killing by selling maize at high prices, most of which they also use poor people to procure at ADMARC depots for resell.
The president stressed that it is important to ensures that the people that suffering the hard hitting economic impact of the pandemic are being protected.
“This will also protect them from predators in the private sector who are bent on exploiting the pandemic for profit,” Chakwera added.
But earlier, an agriculture economist Tamani Nkhono Mvula warned the government against increasing subsidies arguing that it may put pressure on the Treasury.
ADMARC has also recently helped AHL Group with a bail out to aid the firm settle salary arrears for its workforce.