EDITORIAL COMMENT : Silo Foods needs strict monitoring

SILO Foods Industries, a fully-fledged commercial business unit created by the Grain Marketing Board (GMB), has opened 84 retail shops countrywide and its products are the cheapest in the country.

Suffice to say the de-merger of Silo Industries from GMB is part of Government’s Public Enterprise Reform Programme. The GMB has been broken into Strategic Grain Reserve and Silo Foods Industries. That alone is good thinking and good progress on part of the Government.

Taking into cognisance the critical role Silo Foods Industries is set to play in the economy, Cabinet has approved that the process of appointing the Silo Foods Industries board be expedited to give necessary strategic guidance and oversight to the entity; that funding proposals from potential strategic partners for Silo Foods Industries be submitted for consideration and approval by Government and that Government’s minimum equity holding in Silo Foods Industries be 26 percent.

The Government has since injected $70 million into to the business for it to ramp up production. An additional US$95 million will be invested over a three-year period to make the project both viable and sustainable.

It is laudable that Silo products are now available at all GMB depots and other satellite shops which were opened to ensure a wider reach of the company’s products.

Apart from mealie-meal, rice and sugar beans, the company’s product range comprises salt, samp, bran, peanut butter, kapenta, pearl millet grain, flour, mixed fruit jam, coffee, maputi and popcorn.

Since April, when it opened shop, Silo products have become an island of pricing sanity in a sea of price madness and brazen profiteering. There is no doubt that the pricing in Silo shops is Government’s effort to stabilise prices on the market, but a lot has to be done to avert the Silo shops from turning into conduits for corrupt retailers and the black market.

Government and GMB must ensure that the cheap prices do not end up making the Silo shops the wholesale for black market and retail shops. The Government and GMB must put in place control mechanisms to avoid hoarding and to ensure that the shops serve the purpose.

It is a trite but true observation that Silo retail shops could as well be a breeding ground for middlemen, who will buy the goods cheaply in bulk and resell them at a higher price, effectively defeating the purpose for which they were created.

History has it that middlemen always pounce on such cheap goods and create a parallel market and chaos.

The poor and ordinary citizens of this country might never benefit from these shops. If not strategically controlled and managed, soon we will find Silo products flooding the parallel markets and being resold at exorbitant prices.

The earlier the Government establishes a board to run Silo Foods Industries, the better, for once corrupted it becomes difficult to clean it up.

It is fact not fiction that everyone wants cheap goods in shops and that being the cheapest Silo Foods Industries faces a mammoth task in dealing with demand and supply issues as well as warding off corrupt and rich cartels intending to syphon the cheap goods into the black market.

Establishing the shops and investing in them alone is not enough. What is critical is to go further and put in place control mechanism that make it easy to ensure that the desired benefits are derived.

In the final analysis, the Government should use the model of GMB de-merger and subsequent retail shops in other aspects of the country’s industrial, in order to ease the burden on citizens in their broad totality. With good management and monitoring, this is the way to go.