Source: Govt plugs maize, wheat leakages | The Herald November 15, 2019
Elita Chikwati Senior Agriculture Reporter
Government has removed marketing subsidies for maize and wheat that were being enjoyed by millers through the Grain Marketing Board.
The subsidies will from January 2020, be targeted towards production of roller meal, cooking oil and the standard loaf of bread for vulnerable communities to afford basic commodities.
Grain millers will be free to buy maize and wheat at market prices from GMB or import their raw materials after the removal of the subsidy.
The move may see adjustments in the prices of bread and mealie meal.
Government had been buying grain from farmers at market prices and selling to millers at subsidised prices to enable consumers access affordable food.
Presenting his 2020 National Budget proposals yesterday, Finance and Economic Development Minister Professor Mthuli Ncube said the subsidies enjoyed by grain millers were open to abuse and a burden to the fiscus.
“The current subsidy policy whereby Government funds the procurement of grain at market prices and sells to registered grain millers at subsidised prices, has been open to abuse and placed a huge burden on the fiscus.
“At times the intended beneficiaries do not enjoy the benefits of the subsidy from Government thus a cost reflective tariff structure also serves the purpose of reshaping demand patterns in the effective and efficient use of scarce resources in the economy,” he said.
“To protect vulnerable groups of our society, Government will extend targeted subsidies on the production of roller meal, cooking oil and the standard loaf of bread.
“A reimbursement system will be implemented in order to extend the subsidy to the producers of roller meal, cooking oil and standard bread through tax set off arrangements and voucher schemes,” he said.