Wandile Sihlobo | Restricting maize imports during a pandemic? Bad idea.

Since the
pandemic started, several countries have adopted restrictive trade policy
approaches such as export bans and export quotas.

The
justification for such policies was consumer focused, as the countries needed
to ensure domestic food security during this pandemic. Fortunately, when International
Grains Council data
showed ample global grain supplies in the 2019/20 and prospects for a larger
crop in the 2020/21 production season; countries such as Russia, Cambodia and
Vietnam, among others, reversed these protectionist policies. These countries
had intended to restrict their wheat and rice trade.

Unfortunately, on
the African continent we continue to witness restrictive trade policy, although
the policies are producer focused instead of consumer focused as has been the
case in other continents.

Consider
Namibia, where the country’s Agronomic Board recently
announced that there will be a suspension of imports of maize
and millet from 01 June 2020 until the domestic harvest has been absorbed by domestic
millers.

The Namibian
authorities expect this ban to be in place at least until November 2020, which
is a period they expect the domestic supplies to last. The rationale provided
is that the policy will ensure that domestic farmers have a market for their
produce, which will support them during this pandemic.

But I can’t stop
to wonder if this policy is practical if one seriously considers Namibia’s
maize market as an example. Maize is one of the major staple crops in the
country, although largely dependent on imports.

Over the past
five seasons, Namibia’s maize production averaged 59 000 tonnes, according
to data from
the United States Department of Agriculture. This is a small fraction against
their average annual maize consumption needs of 216 000 tonnes.

The difference
is usually imported, which is the volume the Namibian Agronomic Board wants to
put a temporary stop on. The policy appears to be heavily producer focused at
the expense of the consumers that could benefit from competitively priced
imports.

With maize
import needs of about 72{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} of Namibia’s annual maize consumption, placing a
temporary ban on imports is not an informed policy option, especially during
the pandemic where the objective of the governments should be to get the most
affordable food to the citizens. Such affordable food, in the absence of trade
barriers, could be a reality this year.

What about SA?

South Africa,
which is a major maize supplier to Namibia is expecting its second biggest
maize harvest on record, about 15.2 million tonnes, according to data from the Crop
Estimates Committee.

This means as
soon as the harvest process gains momentum around mid-June 2020, South Africa’s
maize prices will likely fall to levels below R2 600 per tonne for both
white and yellow maize, where they are currently hovering around.

Such potential price
declines would be beneficial to the Namibian consumers. The Agricultural
Business Chamber of South Africa (Agbiz) currently estimates that South Africa could
have about 2.7 million tonnes of maize for the export market, up by 90{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} y/y.

From a Namibian
farmer’s perspective, the government is attempting to provide support through
trade policy, but that will most likely yield very limited success. There is no
certainty that the domestic maize harvest will be of acceptable quality to
attract millers.

Also, as best as
one can tell from Namibia’s aforementioned maize
production data, the country has not been self-sufficient in maize
production for over the past two decades. Therefore, to boost local maize
production and global competitiveness, the interventions would have to be
through increased investment in higher-yielding seeds, irrigation, expansion of
planting, and various more efficient farming techniques, rather than a
temporary ban on imports, which the Namibian Agronomic Board is currently
pursuing.

These
interventions are long-term and could be part of the post-COVID recovery
strategy for Namibia’s agricultural sector. In the near-term, the focus should
be to ensure that the citizens receive the most affordable and high-quality staple
food possible. If this means imported, as is usually the case, that should be
permitted.

Wandile Sihlobois chief economist of the Agricultural Business Chamber of
South Africa (Agbiz) and author of FINDING COMMON GROUND: Land, Equity
and Agriculture