Welfare and incentive effects of possible changes in the regulatory environment of the maize market in Swaziland - Institutional Constraints to Small Farmer Development in Southern Africa - page 147

market will drive private sector-led trade, marketing and processing. A possible effect of
the full deregulation of the industry is the simplification of the chain that delivers maize to
the rural and urban consumer. Such a chain is illustrated in Figure 7.5 which shows more
direct routes between domestic and foreign supplies to the consumers, with implications
for lower transaction costs and ultimately lower prices paid by the consumers.

In the light of the foregoing, it is recommended that the Government of Swaziland takes
immediate steps to deregulate the maize market sector in the following manner:
1. Phase out all the regulatory bodies that restrict the free flow of maize and maize meal
with no government interference in maize trade.
2. The National Maize Corporation (NMC) should be privatized; government should no
longer be involved in the handling and marketing of maize in the country.
3. Government, through the ministry of agriculture's department of extension service,
should concentrate on the provision of education and extension services to farmers
with the aim of identifying and promoting investment in the alternative crops for which
Swaziland has competitiveness advantage.

Maize and maize
meal imports

Commercial
maize farms

Rural
surplus
producers

Maize
millers

Urban
retailers

Rural
millers

Urban
consumers

Rural
consumers

Figure 7.5. Maize marketing chain under deregulated regime in Swaziland.