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Samuel Kadungure
Senior Reporter
THE Grain Marketing Board (GMB) needs at least $2,4 billion per week to purchase grain and $20 billion worth of agro-bills will be floated beginning this week to create a revolving fund to enable the grain utility to catch up with payments to farmers, a Cabinet Minister has disclosed.
The agro-bills will be floated through the Agriculture Marketing Authority (AMA).
This was disclosed by the Minister of Lands, Agriculture, Fisheries, Water and Rural Resettlement, Dr Anxious Masuka, during his tour of wheat farms in Makoni and Mutasa districts last week.
GMB depots in Nyanga, Makoni, Mutasa and Chipinge were between a week and three weeks behind in paying for grain delivered to their depots.
Farmers in these areas have also complained of high transport costs as they are being charged between US$1 and US$2.50 for the transportation of one bag of maize, depending on the distance.
GMB is paying $32000 for a tonne of maize, $38000 for traditional grains and $48 000 for wheat and soya bean.
Payment should be processed within 72 hours or a week after delivery.
While admitting to the challenges, Dr Masuka said corrective measures have been taken and payments will be accelerated going forward.
“GMB did the cash flow which we have since submitted to Treasury. We had anticipated to receive between 170 000 and 180 000 metric tonnes of grain in June, but the volumes exceeded 220 000mt.
“Over 350 000t have been delivered to GMB, which is commendable. However, the payments are lagging slightly. The value of maize delivered is worth $12.2 billion and we have paid over $8.9b.
“We are slightly behind but we expect to catch up soon.
“The grain inflows are higher than what we had budgeted for. GMB needs at least $2.4billion a week to pay for the revised projection of 300 000t in July. While there is a bit of a cash flow issue, when you compare it to previous years, GMB has done extremely well,” said Dr Masuka.
Last year, GMB received 259 345t of maize as the season was hampered by drought. Its woes were further compounded by stiff competition from private buyers.
“A schedule from GMB shows that some depots are three weeks behind in terms of payments. About 38 percent of outstanding payments are currently within one and two weeks.
“I would be disappointed if farmers side market because the GMB price is good, and that is why we put in additional statutory instruments to protect the harvest. For Vision 2030 to be achieved and for agriculture to anchor that vision, farmers must be paid fairly for their good crop.
Farmers should be disciplined and loyal. We will pay them and they must deliver their grain to GMB where they get better value for their efforts,” said Dr Masuka.
The minister also admitted that transportation of grain to GMB has been a major challenge.
Some roads are not trafficable and GMB has less than 1000 trucks which cannot cope with the high inflows.
“We had not anticipated that transport and logistics will become such a big issue. We have asked the AFC leasing company to address this issue going forward by making sure that every combine harvester imported will be accompanied by three 30-tonne trucks.
“The country needs 200 more combine harvesters by summer next year, so it means that we must have a fleet of 600 more 30t trucks.
“If we mobilise combine harvesters without doing the same on the transport to take the grain to GMB the transport challenges will persist,” said Dr Masuka.
On preparations for next season, Dr Masuka said the AFC Bank is mobilising $20billion to finance the production of 100 000 ha of maize, as well as 50 000ha of soya bean and tobacco.
“They will probably be the biggest lending institution. The competition between CBZ and AFC Holdings will pave way for lower interest rates and better efficiencies. The banks have been co-opted into an inter-ministerial meeting to discuss summer preparations,” said Dr Masuka.
“Now that the economic environment is stable and predictable, with inflation is going down, the interest rates will also go down. The cost of lending to farmers should not exceed 30 percent.
“With inflation trending downwards, it means we can plan for the season with precision.
“The AFC Bank should be able to offer seasonal, equipment and infrastructure financing to farmers,” he said.
Turning to irrigation, Dr Masuka said the area covered will be increased from the current 75 000ha to 350 000ha within the next three years.
This includes 45 000ha of A1 and A2 farms, whose irrigation infrastructure is old and dilapidated, which should be functional before the wheat season next year.
“We have formed an alliance with 10 major irrigation companies, and are at an advanced stage of finalising a structure that will allow farmers to borrow to install their irrigation systems.
“Government fully supports the farming business,” said Dr Masuka.
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