admin
THE new prices for grain, soya bean and sunflower were needed considering the rising costs of inputs we have been seeing and the Government took the right decision to ensure that farmers can make a reasonable profit from their business.
The temptation to try and push down producer prices when you are guaranteeing a market is a serious one, since it guarantees cheap food without any other manoeuvring. It also regrettably guarantees that you run short of food, sooner rather than later and often sooner.
Just as important is the Cabinet decision to move the preparations for inputs procurement and funding for the next summer crop to this month, rather than wait until August always seen as early enough to ensure that all farmers have the seed and fertiliser they need and the ground prepared by the time the rains fall.
There are several good reasons for both moves. First there are what are described as geo-political moves, and the prime pair are the higher prices of petroleum products, which are used to make fertilisers and the actual availability and price of many fertilisers.
The Russian special military operation in Ukraine has a direct effect on availability and world stocks of fertiliser and many grains, plus oilseeds such as sunflower.
This will probably mean others will have to boost production of fertiliser and it will be harder to buy some food on world markets. Even if our own favoured suppliers are able and willing to keep up supplies, they will still want the new world prices.
This might well mean we must start now to build up stocks of fertiliser, and build up stocks of the raw materials we need to make our own fertilisers. We did let our manufacturing fall off, sometimes because of technology changes and sometimes because we cut back on investment. As with so much in the Second Republic, a major effort was made to start resuscitating that industry, but obviously we need to go into overdrive.
Another reason to get the fertiliser supplies fixed up earlier is the need for the bridging finance the companies need between when they pay for fertiliser and raw materials and when the trucks drive out to farms.
Starting earlier means we can buy stocks as they are available and then keep them for when the farmers plant. There is obviously more that can be done on the preparation side.
Recently, President Mnangagwa made it very clear that the conflict in south-east Europe was a wake-up call.
While Zimbabwe has been pressing for food self-sufficiency and is getting very close, it is now essential that we meet the targets year after year, in good times and not so good, and that our farmers grow enough for us to eat.
If we grow our own food and make our own fertiliser we have a rock on which global storms will break. Land preparation can also be done earlier for larger areas. Already the small-scale farmers now know their Pfumvudza conservation farming works a lot better when there are rainfall problems, like the difference between having a crop and having a write off.
With a pricing regime in place that does allow profit from harvests in excess of household needs, more of the small-scale farmers could become seriously interested in adding to their small plots.
The other point about the rise in producer prices is that farmers can trust the Government. The original prices were set near planting time last year. Come harvest there are some rising costs, some even inflicted by our own currency speculators, and other problems.
But the Government went back to basics and Lands, Agriculture, Fisheries, Water and Rural Development Minister Anxious Masuka, got his tech teams to work out the actual costs and feed in a reasonable profit, and no one works for nothing, and then the Minister went in to bat in the Cabinet meeting and the result was accepted.
The farmers were not left in the lurch and told to look at their contracts. The other side of the coin will be consumer prices, what people pay for the food the farmers grow. Obviously this will rise in price.
In some respects, people are already factoring this in, as part of the inflation we are presently going through although most of that is driven by black-market currency speculation.
But the fact remains that mealie meal, traditional grains and cooking oil will rise in price, but on the other hand they will be physically there because farmers are ready to grow grains and deliver their harvests to the Grain Marketing Board and not get bogged down in side-marketing.
While the inputs for small-scale farmers are technically a subsidy, and even the financing for commercial growers amounts to one through the concessions, these can be policed rather easily.
Farmers do not get inputs until their land is prepared, and that is done in the best and correct way, and then someone else checks that the land was planted. So cheating is very hard.
Consumer subsidies have had a far more chequered experience. When we once tried to subsidise everyone, we created supply problems and gross inefficiencies, as black market dealers monopolised the subsidised food and some people who bought directly fed it to pigs as cheap stock feed. In any case the rich were subsidised as well as the poor.
The switch to social payments cleared away most of those problems and as food prices rise, Treasury and the Department of Social Welfare are going to have to look hard at those who need help and how much, and then make sure they get the money so they can afford the basics.
This has worked a lot better than direct subsidies and still ensures that those who cannot afford to pay present prices are not left to live on charity or starve.
We can run good economics that encourage production and can, through pure and checkable producer subsidies and social payments, ensure that humanity as a whole can share in that production.
Online Reporter