14/08/2022
CCPC'S MISGUIDED STANCE ON TOMATO FARMERS SHOCKING
The Scoop Editorial: August 10, 2022
READING the reaction by the Competition and Consumer Protection Commission (CCPC) to a statement in which the Zambia National Farmer's Union (ZNFU) expressed worry over the foregoing in the tomato subsector, one would wonder what some people in these offices do to get paid.
The statement from CCPC was the most unpatriotic and disheartening piece of writing we have ever seen from a Government institution in a very long time and our appeal to the Minister of Commerce, Chipoka Mulenga, is to quickly clean up the mess at this institution and this must be done as a matter of urgency.
For those who don't know, here is the issue; the price for tomato has plummeted to record low levels in the past few months and the situation is worsening by the day. Price fluctuations in a liberal economy where the forces of demand and supply determine the equilibrium price are very normal and this has always happened year-in-year out but what is happening now is unprecedented where small scale farmers have lost value for their product. Tomatoes are just rotting in the fields and at Soweto Market due to lack of market.
But what has created this problem? Zambia, a few years ago banned the importation of tomatoes on account that we cannot continue importing the commodity from other countries when we can produce to meet local demand and even export. Because of the business opportunity created by Government for local farmers, some foreigners saw an opportunity just like the case was years back with petroleum transportation.
They did not only buy farms in Zambia, but they looked at loopholes of knocking out completely the local farmers from the equation and so, the first move was to produce more, at a loss so that when local farmers stop producing tomatoes, then they can now takeover the market, form cartels, and dictate the price.
The current problem has been caused by one Zimbabwean farmer who has come to Zambia, bought farms and started producing tomatoes at a very large scale just to frustrate the Zambian farmer. This is a calculated move. He and his friends are not making profits now but the whole idea is to become the only suppliers of the commodity in the long-run and cash in big.
What has created the current problem is that he grew a huge number of hectares of tomatoes which he has influxed on the market but he is not yet done. Just last week, he planted more hectares of tomatoes to further frustrate the local farmers so that they can be kicked out of business completely.
But that is not all. He is giving out plants to anyone who is Zimbabwean and has land to grow more tomatoes. He is even helping some of them with drip irrigation equipment so that they can paralyse the traditional tomato producers.
Currently, this man is supplying in all big, strategic markets such as Soweto, Copperbelt, and Kasumbalesa where the local farmers are selling and he is giving trucks and truckloads of his tomatoes to his fellow Zimbabweans so that it does not appear as though he is the only one supplying the market and causing the current problem.
This simply means traditional small scale tomato producers from Chisamba, Chongwe, Mumbwa, and many other areas across the country have technically been forced out of growing tomatoes. They and a huge number of their farm workers cannot continue producing and making huge losses. At household level, this will mean loss of disposable income while the farmers' investment is in limbo. Surely, can't CPCC see this?
To a carnal mind, this is a welcome development because the commodity is cheaper but you should wait until local farmers stop producing and leave the business to the Zimbabweans and see if Zambians will not pay through their noses for the commodity once they dominate the market to themselves and start dicating prices. To see such a hollow and unresearched statement from CCPC, boggled us.
The problem with most of us Zambians are very gullible. We take pride in attacking the very people that mean well for us and this is the reason why it becomes fashionable for misguided elements at CCPC to attack ZNFU and we are clapping for them. What we expected from CCPC is for them to investigate the matter, share notes with ZNFU, and then draw a conclusion from their findings.
What investigations did CCPC conduct before reacting to the ZNFU statement? How has their position helped local tomato farmers to realise their return on their investment? Does CCPC know that at the current price, no single farmer in Zambia is making a profit as a result of these selfish foreigners?
Does CCPC know that maize farmers are crying due to unfavourable prices? Are they aware that another cartel has hit the soya beans subsector where our farmers are making huge losses while crushers are out to make huge profits by buying the commodity for a song but make a lot of money through the selling of cake and cooking oil whose prices have remained high despite our farmers producing more? Do they know that our rice farmers are now parting away with K4 per kilogram of rice on top of being told to re-dry the commodity beyond the moisture content requirement? Is this what is defined as fair competition by these dwanzies? What really does CCPC stand for?
It is ignorance of the highest margin for CCPC to brand the call to foreigners to stop dumping tomatoes at Soweto Market as an afront to limiting access to markets to the various farmers that are producing to scale and that it is against the spirit of competition promotion.
Their claim that encouraging competition by limiting production will only serve to disadvantage the local economy and will subject consumers to higher price and that instead, stakeholders should be seen to encourage scaling up production, value addition and linkages including with export markets simply shows CCPC is economic with the truth over this matter.
They simply jumped to make this statement to defend the interest of some people within the institution who have vested interests and would rather support these cartels than puting national interest first. These are the people who should be removed from that institution.
Now, to prove that we are dealing with an ignorant bunch of individuals who have no clue about what their own law says, the Competition and Consumer Protection Act No. 24 of 2010 section 16(1) says an enterprise shall refrain from any act of conduct if, through abuse or acquisition of a dorminant position of marketing power, the act of conduct limits access to the markets or otherwise, unduly restrains competition, or has or is likely to have adverse effect on trade or the economy in general.
Such acts, according to 16(2)(g) include selling goods below their marginal or variable cost which is exactly what these foreigners are doing and this same Act provides that such an enterprise is liable to pay CCPC a fine not exceeding 10 percent of its annual turnover. This is exactly what is happening in Zambia right now yet we have a sleepy, docile CCPC which cannot only interpret its own provisions, but fails to investigate clear cases hinging on competition and only see it fit to attack another institution blindly without facts.
No one is against competition. No one is against overproduction of any product because we want this country to be self-sustaining in most of these sectors and the best this Zimbabwean should have done was to go into value addition since he has this huge investment power and then export the finished product. He would still have made huge profits while leaving the local farmers to supply the local market.
A classic example of such a responsible investment is that of Buya Bamba. When Government banned the importation of potatoes years ago, Buya Bamba saw an opportunity. They did not only venture into growing potatoes, but also into value addition by buying machinery. Today, all the chips produced in Zambia come from Buya Bamba. They are producing potatoes on a large scale but have you ever heard small scale potato farmers complaining? No. Why? Because they are doing the rightful thing. They have not destroyed the local farmer to become a dorminant supplier like this Zimbabwean is doing.
This is what President Hakainde Hichilema has been preaching about. Value addition. Even when this issue of tomatoes was brought up, he expressed concern over the development and again talked about value addition to protect the farmers but CCPC are acting to the contrary. They are simply abrogating the same law that talks about competition. So, in whose interest are they operating such that while the President is sympathising with local farmers, they come up with such a ridiculously nonsensical statement?
Ba Chipoka Mulenga wesu, you have a job to do at CCPC. Clean that Commission once and for all before those honchos plunge the agriculture sector into oblivion. We cannot tolerate that kind of cheeky attitude when our farmers are crying. That is being unpatriotic and a big shame. It is an afront to agriculture development in Zambia.
