By Phephile Motau
The country’s prominent millers are accused of using cartel-like clandestine tricks to collapse the NMC so they could capture the lucrative white maize market for foreign interests at the detriment of emaSwati.
The Eswatini Financial Times has reliably established from its well-placed and impeccable sources that the millers have allegedly concocted a way of rendering the National Maize Corporation (NMC) a useless institution which fails to deliver on its mandate.
They execute this covert stunt by ensuring that the NMC always stays with no maize stock in its silos most of the time by buying all the maize the corporation imports to store it in their private storages.
The sources allege that the millers “do not even wait for the trucks to finish offloading as they buy all of the maize available and store it in their silos, leaving the NMC without any stock to sell to emaSwati or the small-scale millers” After doing this, the Eswatini Financial Times have been made to understand that after they have observed that NMC has run out of stock, they then sell the maize to the public and the small-scale millers at escalated prices, imperilling the over 1.2 million emaSwati relying on the subsidies.
According to our sources, the ringleaders in this modus operandi are those millers which are subsidiaries of South African companies which are also in the business of maize production.
“After buying the whole maize from the NMC, they then approach the National Agricultural Marketing Board (NAMBoard), a custodian of maize import permits) seeking permits to import white maize straight from their farms,” the source said.
The source added: “Over and above rendering the NMC a failed institution, the millers bring cheap maize imports from their farms and come sell it at an uncompetitive price, thus disadvantaging local smallholder farmers who charge higher prices.”
“What would happen to the liSwati who has planted maize at such high costs? Are people not going to say they cannot buy a ton of maize for E4 000, yet the farmer has spent the same to produce that maize,” the source wondered.
The sources went on to say, the accused millers, did this so that at the end of the day people will say there is no maize at NMC, therefore they should be allowed to source their maize from SA. In January, the media reported that the millers unanimously complained about a shortage of maize at the NMC.
“The millers are always strategic and when the NMC prepares to sell the maize, they come with theirs which they had stocked in their silos and sell it at lower prices,” the source alleged.
“With this intention, they want to paint a picture that the NMC is failing. The moment people understand that the NMC does not stock enough maize, they will push that it should be bought from South Africa.
The Principal Secretary in the Ministry of Agriculture Sydney Simelane said there are restrictions on how much white maize can be ordered and under what circumstances. Simelane stressed that there are millers who buy maize from the NMC and after the maize stock is depleted, they issue permits for them through the NAMBoard to go buy from SA.
Simelane observed that millers are shrewd businesspeople as they try by all means to sidestep any restriction that will prevent them from making money, adding that such could be either good or bad.
Simelane said: “Their sole intention is to import maize from South Africa and not buy any from the NMC because maize is cheaper in the Republic”.
“They are hellbent on ensuring that they source maize from their farms in SA,” Simelane said.
Against this backdrop, the PS said as an eye for the government, they had a problem with that. The first problem is economies of scale as Simelane said South Africa is far bigger than Eswatini and they afford to produce a lot of maize and sell it at cheaper prices.
“In Eswatini we cannot afford to do that, the moment we give them that leeway, we are killing the local farmers completely, yet the country wants to be self-sustainable in producing food,” he said.
He said this is the reason why import tariffs and levies are critical. He said the government and the NMC were not profit-oriented, but the millers are hence the brewing problems because the government has the interest of emaSwati at heart.
The NMC’s CEO Mavela Vilane has told this publication that despite millers being their key customers, they are describing the organisation as irrelevant.
Vilane said some of the millers are of the strong view that the NMC is a stumbling block and an unnecessary monopoly that is making white maize and related products too expensive to be affordable by the consumer.
“They think if the NMC could not be there, they could be sourcing maize from South Africa at far lesser than what they pay today. That is their own perception, it could be a reality, but they’ve got their own interests,” he said.
According to Vilane, another thing that adds salt to the wound is NMC’s financial challenges. The CEO disclosed that the NMC buys on credit from its main supplier, Rand Agri, and sells on credit.
“We have a credit limit; for example, we cannot take maize above E11 million on credit. We take the maize and bring it to our silos. The millers have a huge farm, from which they produce their own maize and bring it to our silos for storage at a cost, as we also provide that service,” he said.
Vilane said once they bought this maize, they sell it to millers on credit and give them 30 days to pay, yet the NMC’s supplier has not given a time-bound payment period. The NMC storage will then run dry.
The CEO said instead of the millers paying the NMC, they will then shout and want permits to go and import maize.
“They go and source from their own farms. This has been a challenge and it is part of our strategy to fix it. We will not give millers permits to import maize, yet they have money to pay us. We also are reviewing the payment period as we get bad publicity once our storage runs dry,” he said.
Vilane conceded that the millers are also their stiff competitors. He said during the local harvest season, they offer harvesting services to farmers, but the millers offer a more lucrative price to them. “The farmers then take their maize and sell it directly to them because they promise prompt payment, resulting in a majority of the maize from local farmers going directly to the millers,” Vilane said.
Against this breathtaking backdrop, one of the milling companies came out guns blazing to defend their shenanigans, saying the price of white maize at the NMC is too expensive, and the service is not always reliable.
This miller who spoke to this publication is from one of the milling companies with a base in South Africa, however, he pleaded that the name of his company should not be disclosed for fear of victimisation.
In an interview on Wednesday, the miller said the price of maize at the NMC is E6 720 per tonne, compared to E4 132 in South Africa. He said after adding their transport costs, the prices soar and become pricier by over E2 000.
The miller went on to say that when they have bought maize from the NMC, the price of maize meal becomes inflated, which affects the consumer.
According to the miller, currently, the price of a 10kg maize meal and that of rice are the same. “Usually, the price of maize meal is cheaper than rice and when consumers have to choose between buying rice and mealie meal, they will choose rice, which will be bad for our business,” the businessman said.
Furthermore, the businessman observed that if the maize could be freely imported from South Africa, the price of 25kg of maize meal would be E50 cheaper than the current price.
He said they would like to be allowed to import maize from South Africa and they are even willing to pay a certain tax to the government because they believe the price would still be cheaper.
Backpedalling to the unreliability of the NMC, the businessman the service at the corporation is very unreliable as they sometimes find that they cannot purchase maize because the machinery is not working or due to other reasons.
He said just last week, he could not purchase the amount of maize he required for his daily needs. He said he was not sure if other millers ever purchased the whole stock from the NMC, as he could not do that. He said he usually sends a particular number of trucks to buy at the NMC, but on other days, he just manages to get one truck which is equivalent to 30 tons.
The miller said sometimes they wait at the NMC, and a truck from SA comes through with maize, then they buy the whole stock from that particular truck because they need the maize to continue with their business.
“What is inside those silos is not known to us. I cannot say that we have purchased all the stock from NMC,” he said.
When asked about the possible solution to these challenges, the miller said in South Africa, companies like the NMC concentrate on providing storage for millers and charging them a particular price. He said the millers could stock their maize, store it NMC, and get it as and when they need it.
The Eswatini Financial Times has also learnt that small-scale millers have also complained about the big millers’ perceived unfair business practice of allegedly finishing off the maize stock at NMC.
This was said by the Chairperson of the Ministry of Agriculture Portfolio Committee Nkhanyeti Ngwenya. He said the millers approached them and they arranged a meeting which was attended by the Minister of Agriculture Jabulani Mabuza and the millers.
Ngwenya said their discussions uncovered that the NMC had financial challenges, and hence it could not source enough maize on time. Ngwenya said other companies ordered their maize even before it is planted and because the parastatal has financial challenges their maize runs out.
Ngwenya said it was true that the bigger companies bought the maize as soon as it arrived at the NMC and the smaller companies find that it is out of stock. He attributed this to desperation on the part of the big millers as they are afraid that the maize might run out when they need it.
“The financial challenges of the government company are being dealt with and we believe all this will be fixed,” he said.
To fix the financial challenges of the NMC, the Ministry of Agriculture has applied that the government give them a financial bailout of E20 million.