THE government has set a record maize producer price of 500/- per kilogramme for Mbozi and Makambako districts in a bid to ensure that the National Food Reserve warehouses are fully stocked.
The Deputy Minister for Agriculture, Food Security and Cooperatives, Mr Adam Malima, told the 'Daily News' in a telephone interview that the measure is aimed at improving welfare of farmers and also as a security mechanism in case of food insecurity.
"We have been forced to do this because maize production hasn't been as good as last year and also of the challenge where private buyers are offering higher prices than that set by the government," he explained.
Earlier, the Parliamentary Public Accounts Committee (PAC) Chairman, Mr John Cheyo, told the Department of Cooperatives in the Ministry that he was encouraged by the new price and that efforts should be encouraged to sustain it.
Mr Cheyo whilst questioning the department on the status of the food situation in the country deduced that since the increase in prices, only 900 tonnes of maize had been bought and showed there was problem in the availability of food in the country.
He told the ministry's Permanent Secretary, Mr Mohammed Muya, that it was evident that more food had been exported than what was in the food reserves and that being a business venture, no one was condemning the move.
Querying on the Commission of Cooperatives, the PAC members raised concern over its set up, structure and the person in charge of the commission. Mr Muya admitted that the formulation of the commission was still in the process and due to a number of challenges; the formation had taken over two years.
"For a commission that has yet to be set up, one that hasn't yet got policies and regulations, it is against the law to be receiving money, 13.8bn/- for the past two years, when something was yet legal. I suggest it remains being a department until everything is in place for the transformation into a commission," Mr Cheyo suggested.
The PAC committee also inquired on why there were perpetual payments of debts by the government on behalf of cooperatives and what the department was planning to do about it so as to relieve the taxpayer of this burden.
The committee cited that between 2010 - 2011, the government had paid 11bn/- as debts for cooperatives undertakings though 7bn/- had been returned with 3bn/- pending.
Mr Muya explained that much as cooperatives were autonomous associations of persons who voluntarily cooperate for their mutual social, economic and cultural benefit, the decisions by parliament usually makes the government the guarantor of their business. He said that when the government committed itself towards a certain venture, it had no choice but to honour it and pay back the debt.
Mufindi South lawmaker, Mendrad Kigola (CCM), said that the loss of funds that eventually leads to the government paying the debts had to be as a result of theft and questioned what action had been taken to those cooperatives that cause losses.
The Assistant Director of Cooperatives Department, Ms Restituta Kahewanga, defended that the aspect of theft in the case of debts was ill placed because all debts are scrutinised before they are passed.
"There are many reasons that bring about the loss of funds when cooperatives venture into a business like in the case of the global financial crisis and issue of lack of markets, the department is currently addressing the issue of markets," she said.
Mr Cheyo told the department that before cooperatives were created, the department should have clear strategies on how they will operate and efforts should be put into having effective pricing policies.