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Dumisani Nsingo, Senior Farming Reporter
THE country’s cooking oil and stockfeed manufacturers are engaging banks to fund their soya bean contract farming projects in a move aimed at ramping up production of the seed, an official said.
Oil Expressers Association of Zimbabwe chairperson Mr Busisa Moyo said soya bean growing was a capital intensive project, which needs the financial sector’s support.
“What we have done is to support out growers schemes be it on small-scale. The players are constrained because we don’t have enough big balance sheets so we have tried to partner with banks to do the financing role.
“We can provide them with market, some expertise and we can participate actively but we need a bank to come in — a financial institution to come in with the financing to the level that is required so that the programme is a success,” he said.
Mr Moyo said banks were showing an interest in supporting soya bean contract farming.
“The banking sector is warming up to the idea, we see that there is a billion dollars that has been availed to agricultural activities differently, including maize. We trust that soya bean production will be part of that, certainly banks like CBZ have been going on about that and the Agribank as well . . .
“We (cooking oil and stockfeed industry) need 150 000 tonnes of soya beans . . . so to grow that you need at least 100 000 hectares and funding at the rate of about $300 per hectare so you are looking at $30 million there before you start. Then you need an irrigation infrastructure which is another $30 or $40 million, so $70 million can roughly get us started in growing soyas,” he said.
Mr Moyo said players in the cooking oil and stockfeed manufacturing industry were ready to participate in the Government’s proposed Command Soya Bean Programme next year.
The Government has also extended soya beans into the Command Agriculture programme to increase output. It is leading mobilisation of $150 million for the 2017/ 18 Command Soya Bean Scheme.
“We need a financing institution that is active and that can be engaged that supports soya growing. As you know the Minister of Agriculture, (Mechanisation and Irrigation Development) has Command Soya Bean production next year, we stand ready to participate and play our role in that.
Where we can support we will, but like I said we are already constrained in terms of balance sheet size as to how much we direct to outgrower schemes for example,” said Mr Moyo.
He said production of soya beans in the country has over the years been low largely due to low uptake in the market.
“The biggest problem farmers had was market, which we are saying we are guaranteeing and for financial institution, once you have some expertise to grow and guaranteed market, it will be easy for banks to come as a third party to plug itself in there.
“Finance got a market here, you got a grower here. We think it’s a winning formula. That’s a sort of model that we would like to see as opposed to the one that puts a burden on the Government to finance or manufacturers to finance their own inputs.”
He said continued support of cooking oil producers by the Reserve Bank of Zimbabwe and the Government was likely to keep the sector afloat.
“We continue to supply cooking oil to the market and we trust we will continue to receive the support we have received up to now from the RBZ and the Government is supporting local production of cooking oils. Of course the big subject is soyas next year, we need to make sure that we localise now.
“We have localised cooking oil, we now have to localise the value chain and localise soya beans productions, that is the big subject getting the farmers excited about growing soyas but also marking sure that the value chain is competitive at the same time,” said Mr Moyo. -@DNsingo
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