MAIZE MARKETING AND PRICING IN LESOTHO: IMPLICATIONS FOR POLICY REFORM

A study was conducted during 1994-1995 amongst policy makers, government officials, retailersand millers in Lesotho to review the maize marketing system and procedures for setting maizeprices at producer, mill-gate and consumer levels. Set prices distort price signals whichinfluence decisions to allocate and distribute resources to provide goods and services for markets.Lesotho is a net importer of maize grain, the major staple, implying that maize pricing andmarketing policy affect food security. Results indicate flexible informal marketing channels, fixedformal marketing channels and declining real producer, mill-gate and consumer prices in recentyears Falling real South African Maize Board export grain prices and evidence of subsidies tocommercial Lesotho mills explain these price trends. Changes to the one channel formalmarketing system and nationally administered price structure that would encourage an openmarket system with less restrictive interregional maize trade are recommended.