malvernmugadzikwa
Business Writer
Vandalism and theft, availability of finance and cost, transport cost and availability and compliance requirements and cost are major factors affecting farming business in the country, a survey has revealed.
According to the 2022 Agriculture Survey Report conducted by Africa Economic Development Strategies (AEDS) and released this week, 75 percent of the surveyed farmers cited vandalism and theft as well as the availability of finance and its cost as the major factors affecting farming business.
Surveyed farmers revealed having experienced vandalism of farm equipment, pumps, irrigation pipes, and irrigation canals. In addition, the surveyed farmers also revealed vandalism and theft of electricity transformers and cables.
Describing vandalism as a perennial problem, the farmers said transformers vandalism and theft of electricity and cables caused stoppage of irrigation as the cost of acquiring transformers in foreign currency is so high.
Labour availability and its cost is also a major factor affecting farmers, according to the survey.
“Labour availability in many farming communities are facing critical shortages of labour as some of the former labourers are not willing to work full time for current farmers mainly due to issues to do with payments,” reads the Survey Report in part.
Most surveyed farmers revealed that labour is difficult to recruit during in-season times such as planting, weeding and harvesting.
“Cost of hiring labour during these times is very high with some labourers requesting for cash payments or payments in foreign currency which most farmers will not be able to pay as they are paid in local currency by most government agencies and as transfer in their bank accounts.”
In terms of electricity availability and cost, the surveyed farmers said though electricity was a bit stable, “electricity is so high such that you only end-up covering cost from the revenues realised from sales”.
“This compliment the reason why farmers shun irrigated crops despite the drive by government to increase irrigation,” reads the survey report in part.
The alternative would be to adopt renewable energy, but the use of renewable energy has remained low with farmers sticking to the old practices of using firewood as the major energy source.
In the survey, solar energy was the most commonly used renewable energy mainly to provide lighting and charging of cell phones to most off-grid farmers. As a result of high cost of production, farmers lack competitiveness. Low competitiveness is associated with high compliance cost, high labour cost, high transport cost, high electricity cost, vandalism and theft of equipment and competition from cheap imports, according to the survey report.
“The high cost of production in the country affects farmers’ competitiveness in the export market.”
The survey recommended Government to consider a two-pronged approach, that is, macroeconomic and microeconomic in order to raise the competitiveness of the agricultural sector.
“From a macroeconomic perspective, since the agricultural sector is not insulated from the vagaries of economic swings and volatilities in the domestic economy, there is a need for Government to rein economic instability. This is key since economic instability is being witnessed through exchange rate spikes and inflation with a net effect of shrinking the capital of farmers and key players in the farming value chains with a combined effect of incapacitating farmers and businesses.
“From a microeconomic perspective, deliberate effort must be taken by both Government and business to reduce the cost of inputs, high compliance cost, high labour cost, high transport cost, high electricity cost and taxes.”
In terms of improving access to finance in the agricultural sector, the survey recommended the inclusion of maize, wheat and soya beans on the commodity exchange.
“This will help in unlocking funding into these commodities which the commodity exchange comes with instruments such as warehouse receipts and derivatives which were noted to be effective in funding the agricultural sector. In addition, fiscal incentives aimed at supporting companies who are funding agricultural sector under contract farming should be considered with a view of encouraging the practice,” reads the survey in part.
Bongani Ndlovu