Poor maize productivity in Zimbabwe: Can collusion in pricing by seed houses be the cause?

Abstract

High cost of hybrid seed can affect food self-sufficiency. A study was conducted to investigate the structure, conduct and performance of the hybrid maize seed industry in Zimbabwe to determine whether the level of competition in the industry caused high and unstable prices. Primary data on the quantity of hybrid maize produced and/or marketed, pricing strategies and hybrid maize seed prices for the period 2011 to 2015 was collected using questionnaires administered to marketing managers of 10 seed houses involved in hybrid maize seed production and marketing in Zimbabwe as well as key stakeholders. The questionnaires were also used as interview guides for key informant interviews with production managers of respective seed houses. Secondary data were obtained from annual reports and technical bulletins of respective companies. The analysis involved respondent triangulation as well as triangulating the data from responses with secondary data in order to increase the convergent validity of the data. Descriptive statistics, ANOVA and trend analysis were used for data analysis. Results indicated that the hybrid maize seed industry in Zimbabwe is highly concentrated meaning that there is low competition. The study established that there may be tacit collusion in the pricing of hybrid maize seed in the form of dominant firm price leadership. The study showed that prices have not been stable for the period 2011 to 2015. It is recommended that the government should enact policies that; prohibit abuse of a dominant position, prohibit mergers which create or strengthen a dominant position and prohibit state aid that creates monopolies.