FRESH from posting a K1.9 b i l l i o n loss in 2010, the Agriculture Development and Marketing Corporation (Admarc) posted yet another loss in 2011, this time 21 percent bigger.

In reaction, Civil Society Agriculture Network (Cisanet) has warned that the state-owned grain marketer will continue making huge losses so long as its status is not changed.

According to the Malawi Government's Annual Economic Report for 2012, Admarc posted a K2.3 billion loss as it held large maize stocks for long.

"Due to continued years of maize surplus situation in the country, Admarc's interventions in the maize market have been very limited. This has resulted in the corporation holding on to most of its stocks for longer than usual, thereby reducing its margins substantially.

"Consequently, turnover reduced from K4.2 billion to K1.8 billion. The company made a loss of K2.3 billion during the year compared to a loss of K1.9 billion in the previous year. Such magnitude of losses is a very high strain to the company's resources," reads the report in part.

To address the challenges in the maize business, Capital Hill said the company is increasing its presence in the commercial crop marketing with a view of realising decent margins.

"However, these efforts have met with the challenge of inadequate financial resources due to failure to liquidate borrowings from the previous seasons," reads the report.

Cisanet National Coordinator Tamani Nkhono Mvula observed in an interview yesterday that Admarc will continue posting heavy losses if its status is not reversed to that of a public trust from a limited company.

According to Mvula, though Admarc does not get government subventions as a commercial entity, it is expected to provide social services which are a drain on its resources.

"For over the past five years or so, we have been advocating for the status of Admarc to be changed back to a public trust so that it starts getting some subventions for social services," said Mvula.

Changing the status of Admarc from public trust to a limited company was, according to Mvula, one of the conditionalities in the Structural Adjustment Programmes (SAPs) by the World Bank in the 1990s.

"Reve r t ing t o the old status will unfortunately mean government revolting against the donors," said Mvula.