Mixed feelings about floor prices

LAST week’s article dwelt on calls from farmer union representatives who advocated for the introduction of floor prices at cattle auction markets in the drought stricken communal areas. This is a result of incessant calls from all stakeholders for Government to intervene in the looming catastrophe in Matabeleland South.

It was clear as daylight to everyone that the effects of drought would be devastating as early as February this year. Drought mitigation committee this and drought mitigation committee that has been formed and have since found their death with absolutely no action taking place on the ground.

As we approach the epicentre of the drought, some people are calling for what seems to be the only logical thing to do and that is floor prices. This call is directed only to the affected areas where vultures have descended.  Speculators are offering ridiculous prices at the auction markets and communal farmers have very little option.

There are mixed feelings about introducing floor prices at rural cattle auction sales in the drought stricken areas of Matabeleland South. Positive comments came from those directly affected by the drought. That is understandable given the reported low prices being offered at cattle sales. There are very few alternatives available to a communal farmer to sell livestock.

However, some people are sceptical about the introduction of floor prices. I really understand where the fear is emanating from. Zimbabwe went through a series of price control measures when the country was gripped by hyperinflation a few years back. Understandably, any call to introduce Government controls invokes unpleasant memories.

This particular call by farmer’s unions is directed at affected areas. Floor prices at cattle auction sales are not a new phenomenon; they were effectively implemented during cattle sales by cattle auctioneers. The Agricultural Marketing Authority came up with market related weekly price forecasts which were then given to cattle auctioneers to use at cattle auctions.

It meant that any animal that was offered less than the floor price was being bought at an unfair price. Each grade of animal had its own minimum price.

This idea was premised on the facts that almost at all times; buyers have knowledge to buy profitably, conversant with the sale procedure, and can understand the English language used at cattle sales. This significantly disadvantages the communal farmer who is not equipped to sell his animals profitably.

At times you feel pity for the elderly who are hypnotized and pounded to submission by a barrage of unfamiliar words like inferior ox, reject male etc.

Ironically, the issue of floor prices was started by the colonial government who thought of protecting communal farmers from the system.

Currently, the system has undressed, and continues to undress the communal farmer hence leaving him bare for the vultures to feast on him. Now that the colonial government could feel pity for the communal farmer, I don’t understand why our very own cannot feel the same way. Surely, charity has to begin at home.

Asymmetry of information is listed in economic texts as a fundamental cause of market failure. Before we even look at the issue of drought, asymmetry of information between buyers and communal farmers demands Government intervention. We cannot continually send our farmers to the slaughter pole where they are butchered for fear of introducing some form of control.

Therefore, it is not a secret that drought has compounded the effects of market failure. Already gullible farmers are in a worse state than before. People who are speaking from urban sanctuaries are completely oblivious to the situation obtaining on the ground. The familiar question is: why are they selling after all? The issue of drought is not a cattle affair only, it affects people too. Absolutely nothing came from crop production in Matabeleland South province this year. People need to sell their livestock in order to eat and live. They also need to buy stockfeed for their livestock in order to maintain them for next year and the year after.

The next three months are going to be the toughest for communal farmers in Matabeleland South. Gwanda and Beitbridge districts have begun reporting poverty deaths, a sad situation indeed. It takes a good heart to feel bad about the predicament of fellow human beings. However, I cannot pretend to think that we all have blood flowing in our veins, others have venom, and that explains this eerie quietude to human sufferings. Kwathuliseka kangaka, pho sithini bantu bakithi?

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