There have been a number of reasons put forward to explain this including droughts, the increased demand from a growing population and the inability of the agricultural sector to raise productivity. Some economists argue that interventionist government agricultural policy is also partly responsible. In an attempt to promote self-sufficiency in the production of the staple, maize, alleviate poverty and to reduce or eliminate dependence on imports, the government of President Kaunda resorted in the 1970s and 80s to a number of agricultural support mechanisms aimed to encourage the supply of maize. These included A system of government controlled pricing of maize A system of producer subsidies for farmers and distributors A system of subsidies for the producers and distributors of fertiliser.
Price ceilings occur when governments set a price above which producers are unable to sell the good.
Price ceilings were placed on maize and other agricultural goods at the beginning of the crop season with the aim of keeping prices of agricultural goods at a level that all Zambians could afford. The price was consequently set at below the world market price and every producer received the same price for the maize it produced irrespective of the costs involved in producing this. Economic theory would predict that such intervention would result in a shortage with the artificially low price stimulating demand and reducing supply. As the government intended to stimulate supply other policies were needed as well. The government granted a series of subsidies on fertiliser and maize seed, and transportation to encourage farmers to maintain and increase production.