Vusumuzi Dube
Judith Phiri, Business Reporter
THE Government has announced the incentive planning prices for strategic commodities such as maize, traditional grains and sunflower for the 2023 production season.
In a joint statement, the Minister of Land, Agriculture, Water, Fisheries and Rural Development, Dr Anxious Masuka and Minister of Finance and Investment Promotion, Professor Mthuli Ncube, said the viable incentive planning price will incentivise farmers to commit more land under the specific strategic crops.
“The planning pricing system being proposed is consistent with achieving both food and nutrition security and macroeconomic stability. This is against the prediction on an Eli Nini season.
“The price determination is based on the approved pricing policy which uses a standardised maize production model, cost-plus pricing model, an average yield level of 5.5 metric tonne per hectare (MT/Ha) and a 15 percent margin above breakeven price,” said the Ministers.
They said from the model, the total cost of producing a hectare of maize is US$1 617/Ha and the break-even is US$291.33/MT.
The Ministers said the model uses a yield assumption of 5.5MT/Ha for a farmer committing inputs in the ranges as highlighted in the maize budget.
“The major cost factor is fertiliser taking up about 36.4 percent the total cost per hectare. At 15 percent rate of return, at a yield of 5.5MT/Ha, the recommended 2023 incentive planning price for maize and traditional grains is US$335.03/MT. The average import parity price for maize is US$331/MT and FOB price is US$218/MT,” read part of the statement.
The determination of sunflower price was based on the approved pricing policy which uses a standardised soya bean production model, cost-plus pricing model and a 15 percent margin above breakeven price.
The Ministers said the price of sunflower was pegged at 15 percent above the price of soyabean.
“Conservative input level have been used with a potential to yield an average of 2.5MT/Ha for soyabean. From the model, the total cost of producing a hectare of soyabean is US$1 237/Ha and the break-even price is US$494.80/MT. The model uses a yield assumption of 2.5/Ha. The major cost factor is fertiliser taking up about 26.82 percent of the total outlay,” they said.
“At 15 percent pate of return, at a yield of 2.5MT/Ha, the 2023/2024 the planning price for soyabean ranges from US$569.02/MT. The import parity price for soyabean ranges from US$415/MT to US$39/MT.”
They said sunflower was a key oil seed crop that can catalyse rural development for attainment of Vision 2030, as this is a smallholder crop suitable for the dry regions.
The Ministers said it was therefore appropriate to sufficiently incentivise farmers to produce sunflower, while targeting to save US$200 million spent annually on crude oil imports and producing surplus for the export market.
“The price determination for sunflower is based on 15 percent margin on the marketing price for soyabean to hedge the sunflower farmers against yield differentials. the recommended incentive planning price for sunflower for the 2023/24 season is US$654.37/MT.”
They said the proposed marketing arrangement notes that there are four categories of farmers such as the ones financed under the Climate Proofed Presidential Input Scheme (Pfumvudza/Intwasa), self-financed farmers, NEAPS financed farmers supported by AFC and CBZ and farmers financed by private contractors.
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