• TABLE OF CONTENTS
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 Front Cover
 Title Page
 The uses of maize
 Factors influencing the decision...
 Government regulation of maize...
 Marketing channels
 Price equilibrium in rural and...
 Seasonal price variations and producers'...
 Summary and conclusions
 Bibliography
 Copyright






Title: Maize marketing and distribution in southern Zaire
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Full Citation
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Permanent Link: http://ufdc.ufl.edu/UF00080054/00001
 Material Information
Title: Maize marketing and distribution in southern Zaire
Physical Description: 20 p. : ;
Language: English
Creator: Mwamufiya, Mbuki
Fitch, James B
International Maize and Wheat Improvement Center
Publisher: International Maize and Wheat Improvement Center
Place of Publication: Mexico City
Publication Date: 1976
 Subjects
Subject: Corn -- Marketing -- Congo (Democratic Republic)   ( nal )
Corn industry -- Congo (Democratic Republic)   ( nal )
Genre: international intergovernmental publication   ( marcgt )
bibliography   ( marcgt )
non-fiction   ( marcgt )
Spatial Coverage: Congo (Democratic Republic)
 Notes
Bibliography: Bibliography: p. 20.
Statement of Responsibility: Mbuki Mwamufiya and James B. Fitch.
General Note: Supported by International Maize and Wheat Improvement Center, U.S. Agency for International Development, and the Oregon Agricultural Experiment Station.
 Record Information
Bibliographic ID: UF00080054
Volume ID: VID00001
Source Institution: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: oclc - 04031828

Table of Contents
    Front Cover
        Front Cover
    Title Page
        Page 1
    The uses of maize
        Page 2
        Page 3
        Page 4
    Factors influencing the decision to sell maize
        Page 5
        Page 6
        Page 7
    Government regulation of maize markets
        Page 8
    Marketing channels
        Page 9
        Page 10
        Page 11
    Price equilibrium in rural and urban markets
        Page 12
        Page 13
        Page 14
        Page 15
    Seasonal price variations and producers' share
        Page 16
        Page 17
    Summary and conclusions
        Page 18
        Page 19
    Bibliography
        Page 20
    Copyright
        Copyright
Full Text



















MAIZE MARKETING AND DISTRIBUTION

IN SOUTHERN ZAIRE


Mbuki Mwamufiya and James B. Fitch






















MAIZE MARKETING AND DISTRIBUTION


IN SOUTHERN ZAIRE



Mbuki Mwamufiya and James B. Fitch







1976


Dr. Mwamufiya recently received the Ph.D. from
Oregon State University, and Dr. Fitch is Assistant
Professor in the Department of Agricultural and Resouce
Economics at Oregon State University.
Support for this research was received from
CIMMYT, the U.S. Agency for International Development,
and the Oregon Agricultural Experiment Station. The
authors are particularly indebted to Don Winkelmann
for his continued support and comments. Frank Conklin
and Carl. O'Connor also made useful comments on an
early draft of the manuscript. Naturally, responsibility
for any flaws in the final product remains solely with
the authors.











Recent dramatic increases and shifts in Zaire's population have had
significant influences upon both the supply and the demand for basic foods,
with profound effects being registered on maize in urban Shaba and in the
Kasai regions. Urban demand for food, such as maize, increased rapidly
(Table 1), not only as a result of population increases, but also due to
investment and income distribution policies which favored urban areas
[12, pp. 2-6]. These factors present a problem of developing an
expanded production system, together with a distribution system capable
of delivering more food to the growing urban market. This paper focuses
on the marketing of maize and is directed to improving the understanding
of factors which influence the nature and effectiveness of the marketing
process.

Information presented here is based on a study of the production and
marketing of maize in the districts of Tshilenge, Gandajika, Mwene-Ditu,
and Kaniama, in south-central Zaire. This included a 1974-75 survey of
299 producers interviewed in their villages, a separate survey of 93 pro-
ducers who were selling their maize in rural and urban markets of the Kasai
Oriental region, and the analysis of the retail price shares received by
various marketing agents in each of three different types of rural-urban
market channels. These results are more fully discussed in an Oregon State
University Ph.D. thesis by one of the authors [12].

The Uses of Maize

In the four districts where surveys were conducted, farmers were
found to allocate the maize harvested among consumption needs, seed for
future plantings, gifts, payment to outside labor used for harvest, bartering,
and sale. Table 2 shows that home consumption was found to be a universal
use, and that setting maize aside for seed was nearly so. On the other
hand, very few farmers used maize for animal feed, to pay hired harvest
labor, or as a gift to the village chief. In all districts, except Kaniama,
producers reported using maize for bartering more frequently than for sale.
Over all four of the districts surveyed, 65 percent of the producers did
report selling maize. The survey also showed that for those producers who
do sell maize, sales average 29 percent of total production.


-2-








Taole 1. Production, Import, Export, and the Urban Demand of Maize in Zaire
(1950-1974)

Tons


Year Produced Traded Export

1950........... 336,635 68,000 17,748

1951..... ..... 313,289 69,000 23,938

1952........... 305,640 55,000 207

1953........... 327,100 76,000 4,577

1954........... 321,670 80,000 20,443

1955........... 325,419 81,000 8,443

1956........... 315,245 103,000 2,984
1957......... 330,330 119,357 14,204

1958........... 320,222 115,751 15,119

1959........... 332,690 97,961 8,863

1960........... *

1961............ 250,000F- *

1962........... 226,0001 0
1/
1963........... 252,0001 0
1/
1964........... 237,00-- 0

1965........... 232,030-1 0

1966........... 270,000-1 0
1/
1967........... 297,000- 0
1/
968 ........... 250,000- 103,000 0

1969........... 350,000- 100,000 0
1/
1970........... 75,00- 90,000 0
1'
1971........... 306,000-' 130,000 0

1972........... 433,000- 135,000 0

1973........... 477,0001/ 114,480-2/ 0
1/ 2/
1974 ........... 524,000I- 125,7602 0

SOURCEi: [1-6, 9. p. 58; 14, p. 55].


information not available.

oI/ r t m
- Ai'.tiors,' estimated.


----


-3-


Urban
Import demand

50,252
45,062

54,793

71,423

59,557

72,557

100,015
105,153

718 101,350

8,002 97,100
*

*

38,837 *

81,888 *
73,356

45,144 *

74,355 *

68,632 *
57,677 160,677

69,600 169,600

87,500 177,500

106,962 236,962

108,450 243,450
2/ 60 /
146,378-2 260,858

170,000-L 295,760-


------------ ---








Table 2. Uses of the Maize Harvesi


District

Type of use Kaniama Mwene-Ditu G;
.------perc(nt of producers

Consumption............. 100.0 100.00
Save for seed........... 99.1 100.0
Barter or sell.......... 80.6 86.6
Barter................... 47.2 83.3
Sell ................. 70.8 66.7
Barter bu' do not sell.. 9.8 19.9
Sell but do not barter.. 33.4 3.3
Gif to v: age chiefI. 20. 2 4.5
Pay hired harvest'- rs. .. 17.0 7.6
Feed animals............ 9.4 0.0
SOURCL: "[12, p. 3231.


andajika Tshilenge
reporting use--------
100.0 100.0
97.1 96.2
86.8 78.6
79.4 77.4
72.1 50.9
14.7 27.7
7.4 1.2
4.5 1.9
11.8 15.1
7.4 9.4


In consumption, maize and cas,.ava flour are mixed with boiling water

in the cooking of a thick paste ca led "fufu", "bidia", or "nshima", which
serves as the basic food in the su vey districts. Maize is also used in

the preparation of "tshibuku", "tchorst", and "cinq cent", which are three
alcoholic beverages produced by villagers. Tshibuku and tchorst are cheaper
than beer and many use it because of its unique taste, or as a substitute
to the more expensive beer.


All farmers interviewed in thc study districts acknowledged using maize
in the preparation of fufu. Of those interviewed, 87 percent said they used
maize throughout the year. Some 81 percent reported eating fufu twice a day.
Most households of the study area nix maize flour and cassava flour in the

preparation of fufu, but the propo-tion of maize flour actually used varies
depending upon availability. Whero, the average area planted in maize is
larger, such as war the case of fa-mers in Kaniama and Gandajika districts,
farmers tend to use more maize flour in the preparation of fufu than farmers
in districts where the average mai.;e area is smaller, such as was the case
of the districts of Mwene-Ditu and Tshilenge. Nevertheless, the survey also
showed that regional preferences for maize flour in fufu do not coincide
exactly with patterns of availabilLty [12, pp. 159-161].


The strength of preference fo- using maize flour in the fufu mix is

important in determining whether o- not a producer will sell maize, but the
following n;alvsis shows that seve al other factors also influence the
decision to sell.









Factors Influencing the Decision to Sell Maize


Discriminant analysis was used as a means of isolating those factors
fihich distinguish between producers who sell maize and those who do not
sell. Discriminant analysis is a special technique of multivariate statistics
whi'h- is similar to multiple regression analysis [13, pp. 434-467j. In

this case, it was used to determine whether or not there was a significant

stat; cal relationsiii- between certain variables which were hypothesized
to inrdfence a farmer's propensity to sell maize and a special "dummy"
variable -hic'! ws; coded one for farmers who sold maize and zero for non-
seller -


Re.s Its of the discriminant analysis are summarized in Table 3. All

explanatory variables which were retained in the analysis after the preliminary
variable selection procedures are shown in the table. Averag- values for
the variables are shown for both maize sellers and for non-sellers. Table 3
then lists the standardized weights for each variable in the final discriminant
function. Those variables which are statistically significant at the ten
percent level, based on a partial F-statistic, are marked with an asterisk (*)
in the table.


Three variables had a significant and positive association with the group
of farr.rs who sold Taize: (i) ownership of a bicycle or radio, (ii) length
of participation in a government supervised production scheme, and (iii) total
area planted to crops. The ownership variable was taken as a sign of'modernity,
2/
although a radio might serve as a source of improved information- and a
bicycle might also be representative of the improved transportation from which
the owner benefits. Participation in one of the government-sponsored production
sch -ies, CAKO or TABAZAIRE, signifies access to government extension workers,


1/
Sale of maize was chosen as a means of identifying those farmers who
participat-e in the marketing process. It might be argued that maize which
is bartered also ends up in market distribution channels. The decision to
use sale and not bartering in this analysis is admittedly somewhat
arbitrary.
2/
-Nevertheless, there are few, if any, regularly scheduled agricultural or
marketing news programs for the areas surveyed. None of the farmers inter-
viewed listed the radio as a primary source of information.















Table 3. Means for the Discriminating Variables and The
Discriminant Function


caria; /S. __/S;:___

FamriIy size (members) ...........

A e of the re spondents ..........

&'n ership of bicycle or radio..

Number of yevrs under a
supervised government
pr-oduction scheme a/..........

Years of formal education......

Total area planted (1/100 Ha)..

Size of the village (people)...

Listance to market (km) ........

'epa planted with maize
(1/lu O Ha)......................

oo i.on of maize flour
1 fufu mix b/ .................

"OURCE: [12, p. 167].


Mean value for variable

Group 1 Group 2
(sell) (not.sell)

4.71 9.38

45.91 42.84

0.52 0.38


1.14

2.52

170.41

931.83

9.71


75.60


1.88


0.85

3.06

131.27

1295.78

10.21


57.45


2.08


eir Weight in the


Standardized
coefficient
in final
discriminant
function

-0.3C'4

0.106

0.326*



0.236*

-0.288*

0.296-

-0.533*

-0.311*


0.247


--0.322*


.-I /
-' uch schemes included CAKO and TABAZAIRE.
b/
Farmers surveyed were asked how iany handfulls of maize flour they would
prefer to put in a batch of fufu requiring five handfulls of flour.


undic.ates significance at the 10 percent level, based on a partial F-test.







3/
as well as a certain amount of assistance from government-owned machinery.
Th' positive influence of total area planted to crops is taken to mean that
the larger an area a farmer is able to crop, the more likely he will be to
have surplus left over for sale. The fact that total area planted to maize
was not significant in distinguishing among maize sellers and non-sellers
is perplexing. In view of the high correlation between total crop area and
the total area in maize variables (r = 0.55), however, this is probably
just a ..ac of the former masking the significance of the latter.

o'our vairiables had a significant negative association with the group

of farmers who sold maize: (i) years of formal education, (ii) size of
the village, (iii) distance to market, and (iv) relative degree of maize
flour used in fufu mix. Contrary to the results of the analysis, the prior
expectation was that education would have a positive effect on the decision
to sell maize. The negative loading for education may be a reflection of
the fact that the more highly educated are both younger and (consequently)
have larger family size. We speculate that it is the combined effects of
these factors, rather than education per se, which mitigate against the
decision to sell maize. The effect of village size was also contrary to
expectation. It is known that producers in larger villages plant more total
maize than those in small villages [12, Table 4.13]. Results of the dis-
criminanr analysis nevertheless suggest that farmers from large villages
4/
fall less frequently into the maize seller category.-

The negative effect of distance to market on the decision to sell maize
was expected. as was that of the relative degree of maize used in fufu mix.
The latte- variable was included as a proxy to indicate the preference for
maize in consumption. Thus, a stronger preference for consuming maize weakens
the propensity to sell maize.


3/This assistance comes in the form of tractorized plowing for either tobacco
(TABAZA1EE) or cotton (CAKO). There is not direct mechanized support for
maize pFr se. Nevertheless, improved tillage for cotton or tobacco may
have a residual effect on maize production in subsequent rotations.
4/A different result might have been obtained, however, had both barter and
sale been used as the indicator of marketing. See footnote 1 above. Of
the four districts surveyed, Tsilenge has the highest population density
and the highest average village size [12, pp. 63-64]. Yet, Table 2 shows
that Tsilengc relies more on bartering alone (i.e., farmers who barter
but do no! sell maize) than do the other districts. On the other hand,
Kanim.r, which ranks lowest in terms of population density and village
I-e, ~canks highest in terms of farmers who sell but do not barter.









Government Regulatlon of Maize Markets


Government efforts to regulate the marketing of maize are focused
primarily in price policies which affect the market for maize flour as
well as that for maize grain. In addition to these price policies, which
are imposed by the national government, many regional and local (municipal)
governments have established regulations on the purchase of maize by licensed
traders operating within their jurisdictions [12, pp. 203-204].


Potentially of most direct ef:'ect on farmers is a floor price which
is to apply to the purchase of mai::e grain at the farm level. However,
great confusion exists on the concept and application of floor prices.
While top officials know what the :loor price is supposed to be,- this

understanding does not seem to be !;hared by the many local and regional
officials who would normally be expected to enforce it. Many of these
officials in fact call it "the official price", "the government price",
and even "the official maximum price" [12, p. 255], a clear indication of
the degree of misunderstanding. This confusion undoubtedly contributes
to an almost universal lack of awareness of the floor price policy on the
part of farmers. Of the 299 farmers interviewed in four different districts
in 1974-75, only six percent knew cf the existence of such a government
policy, and less than two percent could state the actual floor price in
effect at the time [12, p. 256].


A second set of maize price policies is aimed at the milling process.

On one hand, a ceiling price is set for the delivery of maize grain to
flour mills, whereas, on the other, a ceiling is set on the wholesale price
of flour produced by the mills [12, pp. 250-253]. These ceiling prices tend
to reduce the incentive for traders to collect maize from the more outlying
villages -- those lying 30 to 40 or more kilometers from the main roads and
railroad tracks. Thus, one result of the ceilings policy is a decreased
incentive for farmers -- especially those who are more distant from market --
to produce maize [12, pp. 257-263].


-The official floor price was foul Makuta per kilogram during the study
period in 1974-75. There are 100 Makuta per Zaire, the basic monetary
unit, and the official exchange rate was U.S. $2.00 per Zaire.


-8-






Because of the price ceilings and due also to slow response in changing
these ceilings as conditions of national supply and demand for maize change,

there tends to be a large differential between the delivery price of locally

produced maize and the price which flour mills must pay for maize imports
(Table 4). The existence of this differential suggests that substantial
reduction in imports (Table 1) and savings in foreign exchange might be
obtained merely by permitting the domestic mill delivery price to rise, thus
stimulating the local production and supply of maize.


Table 4. Delivery Prices of One Ton of Maize and the Price of Maize Imported
by the Kakontive Flour Mill in LikasiFob at Zambian Border


Price in


Zaire's Per


Ton


1967 1968 1969 1970 1971 1972 1973 1974 1975

Imported maize.............. 35 38 42 42 42 40 68.8 a/ 78
Domestic maize.............. 25 32 32 32 34 37 63 63 63


SOURCE:
a/Import
- Import


[ll].
price not available for 1974.


Local and regional officials frequently intervene in the maize market in a

more direct fashion. These actions often have the effect of restricting trade

between towns and regions. These interventions are usually motivated by seasonal
shortages in local markets. In Shaba, a regional ordinance banned the export of

maize beyond the regional boundary, and in 1975, the Kasai Oriental government

was considering a similar edict as a form of retaliation. Licensing of traders,
as required by local and regional governments in Kasai Oriental, Kasai Occidental,
and Shaba, may also be designed to restrict trade. In the latter two regions,
in 1975, the issuing of such licenses was contingent on the trader indicating
which districts maize would be bought from, as well as on his agreement to sell
to a designated flour mill. While such moves are evidently intended to secure
local supplies in the short run, they tend to limit the number of maize traders,
and thus to limit competition in maize trade. Furthermore, by promoting dis-
parities in maize prices among regions, these policies are likely to lead to
an inefficient allocation of resources in the production of maize. A pattern

whereby some districts produce "too much" maize, while others produce "too
little", will thereby be perpetuated.

Marketing Channels


Farmers in the study districts sell maize in bulk, typically still on

the cob, and in small loads which are measured out in a variety of unstandardized


-9-


~-------









containers. Many farmers sell their maize at home in their villages,

.hil~r others take it to rural and urban markets where they sell to assemblers

-;ho r-ollect for later sale to other intermediaries or to consumers. The
discriminant analysis demonstrated that farmers who are located closer to
organized markets show a greater p-opensity to sell maize.


.ise are a number of different types of maize buyers who work in the

various u:al and urban markets an(. directly in the production areas. Small
scale buyers who operate in isolated villages and in rural markets are
referred to here as local assembles. Buyers operating between rural and
urban markets are called rural and urban assemblers. Truck-owner-licensed-

traders operate all the way from rmote rural markets to the centrally

located urban markets. Data from :he various study districts, shown in
Table 5, indicate that from 29 to 52 percent of the farmers sell most of

their maize to local assemblers an: local consumers. From 20 to 64 percent
sell to rural and urban assemblers, and 7 to 21 percent sell directly to
licensed traders.

Table 5. Proportion of Producers Selling Maize to Different Categories
of Buyers

District

Type of buyer Kaniama Mwene-Ditu Gandajika Tshilenge
-------------------percent--------------------

Local consumers and
local assemblers........ 50 37 29 36

Rural and urban
assemblers.............. 20 44 64 39

Licensed traders......... 19 12 7 21

Others (not specified).. 11 7 0 4
SOURCE: [12, p. 182].


Table 6 lists sales according to their location. In most districts,

farmers tend to sell at home in their village. But in more densely populated
districts, such as Tshilenge, Gandajika, and Mwene-Ditu, there is a tendency
for farmers to take their maize directly to rural and/or urban markets.

M,.y direct sales by producers were also observed in the town of Mbuji-Mayi.


-10-







Table 6. Proportion of Producers Selling Most of Their Maize in Designatuc.
Locations

District

Location of sale Kaniama Mwene-Ditu Gandajika Tsiii
-------------------percent-----------_ .

Village (at tome) ............ 67 64 33

Along main road.............. 1 5 5
Rurii. market ............ .... 27 11 17

l.inan ...ar, .... ........... 0 20 43

1her answer s.............. 5 0 2
SOURs! ,. .! 182].



ii .t ,,ore densely populated districts, numerous buyers are acti

rural na.,kLr ;, particularly during the first two to three months after

maize harv st., Because of bad roads and limited transportation service

most of ilIe ',aizc bought by these small-scale rural assemblers has to i.

carried in iiad loads to shipping points or other markets. This n:eatn.

the activicie of most rural assemblers are restricted to areas with,

distances of main roads and some secondary roads.


Truck-owner-licensed-traders who buy maize are unspecialized sea:o!
buyers who deal mainly in the buying and selling of consumer manufacrun

goods. These traders can devote larger sums of money to maize purchase

and can reach more remote markets and villages. Nevertheless, their cl;
are also limited by the poor road network. Thus, the number of tradei,

ascemi bier, who reach the more remote villages is limited, and this apr

to limit the competition for the purchase of maize in such areas.


The marketing chain nearer to the large consumption centers involv,-

numerous intermediaries. During the survey, this was especially evident

in the FMbuji-MHai-Gandajika interurban link. The high price of maize ;

consumption centers, the prospect of positive retail margins, and higl

c- urban unemployment in these cities have induced many to enter the miy,
retailing business. Because of limited working capital, these retailcih-

run very s~mll-scale operations. Thus, as maize travels in from the coI,

side it is frequently split into smaller loads and handled by numerous

ret.-ilers.


-11-









The degree of competition among maize suppliers in rural and urban
markets depends upon the seasonal variation in supply. In the three to four
months following harvest, many producers and assemblers are active in both
rural and urban markets, and this results in a competitive environment which
undoubtedly helps to keep prices down. As the period after harvest lengthens,
however, wholesale supplies become dominated by urban and rural assemblers
as well as truck-owner-licensed-traders, and the degree of competition in
the maize market decreases gradually, particularly at the wholesale and
semi-wholesale levels.


Analysis of a subsystem of the marketing chain in the Mbuji-Mayi and
Gandajika areas indicates that most maize producers do not store maize for
speculative purposes, to gain from seasonal price variations; rather, most
producers sell maize to assemblers and traders, and it is this group who
often store for future sales. The same analysis also indicates that as
producers become rare in the market, competition among sellers is gradually
affected [12, p. 220], and by July or August, the wholesale supply of maize
grain is dominated by few truck-owner-licensed-traders who, in some cases,
run an integrated operation from the wholesale to the retail level. This
pattern of supply may be responsible for some of the price increases noticed
in the last months of the marketing season [12, p. 223].


Price Equilibrium in Rural and Urban Markets


Three rural markets and two urban markets were selected for the purpose
of investigating price formation, seasonal price variations, and intermarket
price relationships [12, pp. 190-191]. The three rural markets surround
Gandajika City, which has a population of 60,000. Nsona lies 10 kilometers
west of the city, Kamanda 21 kilometers south, and Kaseki 18 kilometers east.
The urban markets of Mbuji-Mayi, a town of about 342,000 people located
85 kilometers northwest of Gandajika City, and markets in Gandajika City itself,
were also examined. Maize producers in the Kamada, Kaseki, and Nsona pro-
duction areas can sell their maize in their respective rural markets, or take
it to the Gandajika market where maize is sold either to consumers or assemblers.
Some of the maize which reaches the Gandajika urban market is subsequently
shipped to the Mbuji-Mayi metropolitan urban market. During the period of


-12-











high shortages of maize grain, some maize can also move from the Mbuji-Mayi
metropolitan urban market to the Gandajika regional urban market, as was
observed in October through December 1974. Seasonal price variations for
the period of December 1974 to December 1975 are listed in Table 8 for rural
and urban markets.


Price figures in Table 7 indicate that the price of maize grain declines
in all markets up to February, as many producers and assemblers literally
invade rural and urban markets following the first maize harvest. The price
of maize then rises until April, then declines in May and June, with the
coming of the second harvest of maize. The price of maize subsequently
rises to a peak high in October or November, then declines in December, with
6/
the forthcoming maize harvest in late December and in January- The simul-
taneity of seasonal price changes in all markets suggests that there exists
a relatively good flow of information on supply and demand between the markets
studied here. Presumably, price changes in the metropolitan market in
Mbuji-Mayi are transmitted to the regional urban markets in Gandajika, then
onto the non-isolated rural markets at Kamanda, Kaseki, and Nsona.


Under perfect competition and perfect information in the spatially
located rural and urban markets studied, maize prices would tend to move
toward equilibrium. Equilibrium prices for Gandajika and any trading rural
markets, as well as equilibrium prices for Mbuji-Mayi and Gandajika, would
differ by the cost of transferring maize between trading markets. A price
differential above the transfer cost of shipping maize from one market to
another trading market would indicate that marketing agents could benefit
from shipping more maize from their own markets to other trading markets.
The following section investigates the performance of the urban rural link.


Performance of the Rural Urban Link

The concept of parity price and price spreads [7-10; 12, p. 227] is
used to investigate the effectiveness of the rural urban link for rural

6lDiscussions with various marketing agents indicated that the pattern
observed in 1974-75 was similar to that of other years in the markets
studied here.


-13-









markets located in geographic areas accessible from urban consumer centers.
th
By definition, the parity price, P, of maize in the i relative to the
ik'
th th
k market is the retail price of maize in the i market, P., less the cost
th th
of shipping it from the k to the i market, Tki. The price spread of
th th
miaize between the i and the k markets is then defined as the parity

price Pik, less the retail price o. maize in the kth market, Pk. In theory,
a substantially positive price spread would provide a potential opportunity
for assemblers or producers to make more than normal profits while a negative
spread would be a disincentive and would serve to reduce the volume of trade
between the kth and the ith market;:.


The price figures used in this analysis are those in Table 7 for Gandajika,

Kaseki, Kamanda, and Nsona. Transportation costs were based on information
provided by lorry transporters operating between Kaseki and Gandajika, and
between Kamanda and Gandajika. Foi Nsona, where no lorry transporters were
operating, transfer cost was estimated by placing a value on the time required
to walk from Nsona to Gandajika. Figures 1 through 3 present retail prices

of maize for the three rural markets and the parity price (P ) between these
ik
markets and Gandajika.


Figures 1 through 3 indicate that shortly after the first maize harvest
in February and March, and in the period following the second maize harvest
in May and June, there is a positive price spread, indicating that producers
lc,.-ld benefit from selling maize directly in the Gandajika urban market.

Producers and assemblers could benefit by an even greater amount from
selling directly in Gandajika market during the period of July or August
tc October or November.


An observation of market attendance in February and March 1975 indicates

that producers did respond to price differentials taking their maize directly
to the Gandajika or the Mbuji-Mayi urban market [12, p. 191-202]. The
figures indicate that response was nearly sufficient to eliminate the
positive price spread. Evidently the response was weaker during September
and October, when general scarcity and high prices were experienced. During
this period, the price spread became quite large in all three markets.


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Table 7. Retail price of maize in six markets of southern Kasai Oriental.-

Urban Rural
Mbuj i-May i Gandajika Kasoki Kamanda Nsona
Zaire Bakwadianga
Maize
Month flour Maize Maize Maize Maize Maize Maize

1974 December 6.7 7.5 6.5 5.9

1975 January 13.3 13.8 12.2 5.3 4.4 4.8 3.9

February 12.6 8.5 8.1 4.7 3.6 2.9 3.0

March 14.8 8.7 7.8 5. 5 5.3 4.8 5. 1

April 14.7 11.0 11.8 8.8 7.3 8.1 6.7
May 11.7 7.3 7.2 7.5 7.2 4.9 7.9

June 14.8 8.9 8.6 7.2 6.7 5.9 6.7

July 14.4 10.7 9.9 9.4 9.2 8.5 7.7

August 24.6 24.5 19.3 18.5 14.6 13.3 9.4

September 20.1 16.1 16.7 11.1

October 38.4 26.1 28.4 25.8 27.6 31.7 26.2

November 34.6 29.3 31:6 28.4 29.8 29.9 31.1

December 30.0 28.6 27.0 20. 1 20.3 26. 1


a Makuta per kg.
SOURCE: [16, p. 222].


D J F M A M J J AS ON D
MONTH
Fig. 1. Price spread for maize
between Nsona and Candajika
markets, December 1974-December
1975. Source: 16, p. 228 .


D J F M A M J J A S O N D
MONTH
Fig. 2. Price spread for maize
between Kaseki and Gandajika
markets, December 1974-December
1975. Source: 16, p. 229 .


D J F M A M J J A S ON D
MONTH
Fig. 3. Price spread for maize
between Kamanda and Gandajika
markets, December 1974-December
1975. Source: 16, p. 236 .


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The high price of maize in the last two trimesters of the year and
the positive price spreads during the period of August to October suggest
that farmers could benefit from stcring their maize and spreading their
sales over the second semester of the year. A related analysis of storage
,nd maize protection practices in the districts of Tshilenge, Gandajika,
and Mwene-Ditu and Kaniama shows difficulties with molding and sprouting
and substantial transfer of weevils from the field to the grainery [12,
pp. 105-106]. Thus, a better system of maize storage and protection could
help farmers to successfully spread their sales over the maize season.
The extreme seasonal variation in price observed during 1974-75 suggests
that storage may be profitable, although final determination on that must
be subject to further investigation. If successful, storage facilities
could serve to stimulate the production and selling of more maize.


Seasonal Price Variations and Producers' Share


The share of the retail price received by maize producers depends on
the degree of competition in the maize market and the cost of transferring
maize from the production site to tie retail market. Over time, the share
of the seasonal price variations received by producers depends on when
these producers get their maize in '-he market. An analysis of the components
which make up retail price indicate,. that, in the rural-urban link between
the Gandajika urban market and the ]Kamanda rural market, producers received
';7.5 percent of the retail price in February-March, 1975 (Table 8).


Table 8. The Share (%) of the Retail Price Each Marketing Agent Received
Per 60 kg Sack of Maize Shipped from the Kamanda Producing Area
to the Gandajika Urban Market, February-March, 1975 a/

Marketing agent Percent
Retailer.................... 14.8
Urban assembler............. 2.2
Transporter................. 27.3
Rural assembler............. 3.3
Village assembler........... 4.9
Producer.................... 47.5
SOURCJE: [12, p. 232].

-i/ sed on wholesale or bulk sales prices in the Kamanda area, and retail
,:ices in the Gandajika market. These data are not directly comparable
to Figure 3, which is based on retail prices in both markets.


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The analysis also indicates that producers who were able to get their maize
to the Gandajika market and convey it to Mbuji-Mayi were able to capture

a larger share of the retail or wholesale price [12, pp. 239-243] (Table 9).


Table 9. The Share of the Retail Price Received by a Producer or Rural
Assembler for Taking His Maize to Mbuji-Mayi and Selling It as
a Retailer

Cost items and Retail Wholesale
Cost items and
return to capital Bakwadianga Zaire Zaire Bakwadianga
----------------percent--------------

Cost of maize.................... "54.5 50.4 54.5 58.4
Transporter...................... 16.3 15.1 16.3 17.5
Storage.......................... 1.4 1.3 1.4 1.5
Food ............................. 13.4 12.4 13.4 14.3
Return to management & capital... 14.4 20.9 14.4 8.3
SOURCE: [12, p. 243].



The single factor which most affected the producers' share was the cost
of transporting maize, particularly between rural markets and urban markets.
The lower share of transportation in transactions involving urban markets
may in part result from greater competition among transporters between urban
markets. The high share of transportation in the study area contrasts
with the situation in Northern Nigeria, for example, where Hays and McCoy
found that transportation accounted only for 5.4 percent of the retail
price for sorghum and 6.5 percent of the retail price of millet, and where
the producer's share accounted for 69.8 percent of the retail price of
sorghum and 68.2 percent of the retail price of millet [7, p. 17].


Because of limited capital and because of the high cost of transpor-
tation, many producers located in the neighborhood of the Gandajika market
carry their maize in headloads directly to the urban market. In so doing,
many producers take weekly trips to markets. However, some crops have
planting or weeding periods which coincide with the selling period for

maize. Farmers who plant such crops simply may not have time available
to perform their own marketing [12, p. 238-239].


-17-










The proportion of the seasonal price variations which is captured by

producers is a function of how producers spread their sales over the maize

season. Survey data indicate that 44.9 percent of the farmers in the district
of Gandajika, 60.5 percent in Kanama, 67.9 percent in Mwene-Ditu, and 76.9
percent of the producers in Tshilenge sell most of their maize within six

months after harvest (Table 10) and, thus, do not benefit from price rises

during the September to December period. Observation of marketing practices

in the G,-ndajika, Tshilenge, and M.qene-Ditu districts also indicates that it
is not the producer, but the rural and urban assemblers, and the licensed

traders who collect and store maiz: for sale during the period of shortages.


Table 10. Number of Months After {arvest Within Which Producers
nated Districts Sell Mo3t of Their Maize (%)


in Desig-


Number of months
after harvest Kani ma

less than one.................. 26.3
1-3............................ 23 .7
3-6............................ 10 .5
6-9............................ 10 .5
Spread over the year............ 27.6
Other answers .................. 1.3

SOURCE: [12, p. 326].


District

Mwene-Ditu Gandajika
19.2 28.6
29.5 4.1
19.2 12.2
13.6 24.5
15.9 24.5
2.5 6.1


Summary and Conclusions


This study on the marketing and the uses of maize in rural Zaire was

aimed at analyzing factors which affect the supply of domestic maize to
urban areas. The analysis of maize suppliers in four districts of Kasai

Oriental and Shaba indicates that .ust under two-thirds of the surveyed
producers sell maize, and that these producers sell less than 30 percent of
their maize.


A variety of factors were shovn to influence the decision to sell maize.

On the one hand, factors which are difficult to control, such as the size
of family, size of village, the preference for maize in fufu, and prior
exposure to the "modern" or monetired economy affect the propensity to sell.


-18-


Tshilenge
42.3
26.9
7.7
15.4
3.8
3.9


~-------









Other factors, such as distance to market and exposure to government-supervised
production schemes, also influence the decision to sell, and these factors
are subject to influence by government policies and programs.


Distance to market, in particular, is affected by the condition and
extent of the transportation network. The transportation system in the
study area is rudimentary at best. Study of the marketing cost structure
indicates that transportation costs account for between 15 and 27 percent
of the final retail price. High transportation costs serve to reduce the
price incentive to the producer and are especially detrimental to marketing
opportunities in more remote and isolated areas.


The high degree of seasonal price variability, together with the fact
that most farmers sell their maize within six months of harvest, when the
price is relatively low, suggest that improved storage facilities may be
a key to improving the incentive structure for farmers to sell maize. While

the economics of storage require further investigation, it appears that
improved storage could be useful in permitting producers to hold their maize
until later in the marketing year, when scarcity begins to occur and prices
rise. This could provide an added incentive for farmers to produce and
sell more maize.


A number of government policies were singled out as having possible
detrimental impacts on maize sales and marketing. While the floor price
is intended to serve as a stimulus to production, there is widespread
confusion among government officials as to what it means. In fact, few
farmers are even aware that such a policy exist-, so it is difficult to
argue that it could be serving as a production incentive. On the other
hand, the official price ceiling on maize delivered to flour mills serves

as a disincentive for farmers to produce and sell maize. There is a distinct
price differential between this ceiling price on domestic maize deliveries
and the price which the same mills pay for import. The existence of such
a differential suggests that reductions in imports and savings in foreign
exchange could be attained by permitting the mill delivery price to rise
to the import price level. This would simultaneously serve to stimulate
local production and supply of maize.


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BIBL LOGRAPHY


[1] Coursier, C. J. 1974. Programme Engrais, AGRI/FAO. Rapport Technique,
Compagne Agricole 197.2 et 1973. Technical paper.

[2] Food and Agricultural Organi:ation of the United Nations (FAO). 1962.
Production Yearbook. Vol. 1(. Rome.

[3] Food and Agricultural Organi;ation of the United Nations (FAO). 1963.
PRoduction Yearbook. Vol. 17. Rome.

[4] Food and Agricultural Organization of the United Nations (FAO). 1966.
Production Yearbook. Vol. 20. Rome.

[5] Food and Agricultural Organi2ation of the United Nations (FAO). 1968.
Production Yearbook. Vol. 22. Rome.

[6] Food and Agricultural Organization of the United Nations (FAO). 1973.
Production Yearbook. Vol. 2E. Rome.

[7] Hays, H. M. Jr., and J. H. McCoy. 1973. Performance of the Staple Food
Grain Marketing System in Northern Nigeria. Contribution 545. Department
of Agricultural Economics, Kansas State University, Manhattan, Kansas.

[8] International Bank for Reconstruction and Development (IBRD). 1972.
Agricultural Survey: Republiz of Zaire. Report No. PA-118a.

[9] Kamwanga Mulumba, K. B. 1973. Le Mais au Zaire. A thesis presented for
the degree of Ingenieur Agronome. University de Kinshasa.

[10] Kotler, P. 1971. Marketing Decision, A Model Building Approach, New York.
Holt, Rinehart, and Winston.

[11, Minoterie de Kakontwe (GECAMIS:ES, MINOKA). 1975. Calcul de prix de mais
graine, Janvier.

[12] Mwamufiya, Mbuki. 1976. Mai:e Production and Marketing in Four Districts
of Zaire: An Introductory Economic Analysis. Corvallis, Oregon. A
dissertation submitted to Ore,;on State University for the degree of Doctor
of Philosophy in Agricultural and Resource Economics.

[13] Nie, N. H., et. al. 1975. S::atistical Package for Social Sciences,
SPSS. Second ed. New York. McGraw Hill.

[14] Republique du Zaire, Ministerc: de l'Economie Nationale. 1974.
Conjoncture Economique. Vol. 14. Kinshasa. Decembre.


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