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The Maize Price Spike of 2012/13: Understanding the Paradox of High Prices despite Abundant Supplies

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  • Sitko, Nicholas J.
  • Kuteya, Auckland N.
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    Abstract

    The 2012 harvest was, according to the Ministry of Agriculture and Livestock national food balance sheet estimates, a major surplus production season. However, by November the same year, Zambia started experiencing widespread maize meal shortages and skyrocketing maize meal prices. Responding to these shortages and price spikes, the government increased the price subsidies it provided on maize sold by the parastatal Food Reserve Agency (FRA) to large-scale maize mills and imposed de facto price controls on maize meal by threatening to revoke the business licenses of commercial maize mills if retail prices of a 25kg bag of maize meal exceeded kwacha rebased (KR) 50. Despite these efforts maize meal prices continued to rise, reaching as high as KR100 in some markets by February 2013.

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    Bibliographic Info

    Paper provided by Michigan State University, Department of Agricultural, Food, and Resource Economics in its series Food Security Collaborative Working Papers with number 171871.

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    Date of creation: Oct 2013
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    Handle: RePEc:ags:midcwp:171871

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    Postal: Justin S. Morrill Hall of Agriculture, 446 West Circle Dr., Rm 202, East Lansing, MI 48824-1039
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    Keywords: Agricultural and Food Policy; Demand and Price Analysis; Food Security and Poverty;

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    1. Mason, Nicole M. & Myers, Robert J., 2011. "The Effects of the Food Reserve Agency on Maize Market Prices in Zambia," Food Security Collaborative Policy Briefs 120766, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    2. Shenggen Fan & Peter Hazell & Sukhadeo Thorat, 2000. "Government Spending, Growth and Poverty in Rural India," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 1038-1051.
    3. Jayne, Thomas S. & Mason, Nicole M. & Myers, Robert J. & Ferris, John N. & Mather, David & Beaver, Margaret & Lenski, Natalie & Chapoto, Antony & Boughton, Duncan, 2010. "Patterns and Trends in Food Staples Markets in Eastern and Southern Africa: Toward the Identification of Priority Investments and Strategies for Developing Markets and Promoting Smallholder Productivi," Food Security International Development Working Papers 62148, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    4. Myers, Robert J., 2006. "On the costs of food price fluctuations in low-income countries," Food Policy, Elsevier, vol. 31(4), pages 288-301, August.
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    Cited by:
    1. Kuteya, Auckland N. & Sitko, Nicholas J., 2014. "Creating Scarcity From Abundance: Bumper Harvests, High Prices, And The Role Of State Interventions In Zambian Maize Markets," Food Security Collaborative Policy Briefs 171877, Michigan State University, Department of Agricultural, Food, and Resource Economics.

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