Millers must refrain from arbitrary price increases: Mutorwa

14 Jul 2015 10:30am
WINDHOEK, 14 JUL (NAMPA) - The Ministry of Agriculture, Water and Forestry (MAWF) has called on millers to refrain from “arbitrary price increases” of controlled agronomic products such as maize, wheat and mahangu.
This was after local miller Namib Mills announced a price increase of four per cent effective as from 13 July on its maize, wheat, pasta and mahangu products, according to a local daily, The Namibian on 29 June 2015. It stated that the price increase was a result of the increase of levies on the products from 0,95 per cent to five per cent, as announced in the Government Gazette issued on 12 February 2015.
Minister of Agriculture, Water and Forestry John Mutorwa in a media statement issued on Monday assured consumers that all measures will be taken to ensure that they are protected from “arbitrary” price increases by millers or any other traders of controlled agronomic products.
“The ministry on 12 February 2015 indeed gazetted increases in import levies of grain from the previous 0.95 per cent to five per cent. This was done to address an anomaly whereby local grain produces were paying a higher levy (1.4 per cent) than grain importers (0.95 per cent), a situation that discourages local production, which is a major national food security objective.
“Also, it was important to not only ensure that local producers are promoted, but also to consider levy structure in neighbouring countries and avoid dumping into the Namibian market,” he stressed.
Mutorwa raised the concern that the 21 per cent (17 per cent plus four per cent) on the adjustment levies are not proportionate to the four per cent levy adjustment and therefore not justifiable. He also warned that other costs of production such as labour and energy did not increase by similar amounts to justify such wholesale increases in prices. The ministry also noted that the media reports cited decreased grain supply internationally as another possible contributor to these price movements.
“Again, the magnitude of these price increases cannot be justified by the actual international price changes,” the minister said.
With a view toward protecting consumers from price increases during the current drought period, the ministry has asked millers to provide guarantees that in case the five per cent levy was to be lowered, there would be no further unjustified price increases. The millers declined to provide such guarantees. Mutorwa cautioned that this creates the impression that even if the levy was waived, consumers may be subjected to more arbitrary price increases by millers.
He added that the ministry has implemented several measures to protect consumers, farmers and millers in the grain sector. This is in consideration of the fact that the subsector would not survive the international market forces given the agricultural resource endowment of Namibia.