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Precious Manomano-Herald Reporter
A bigger chunk of 2023 grain producer prices announced by Government yesterday will be paid in foreign currency, with farmer organisations expressing satisfaction with the development.
The prices were announced by Lands, Agriculture, Fisheries, Water and Rural Development Minister Dr Anxious Masuka and Finance and Economic Development Deputy Minister Clemence Chiduwa.
Farmers will partly be paid in US dollars and in local currency converted at the interbank rate.
Millers buying grain and firms buying oil seed will pay the Grain Marketing Board (GMB) a small profit margin to cover administration and storage costs.
The prices were the floor producer prices. This means that whatever happens, farmers will be paid at least that much.
Dr Masuka also announced the pre-planting floor producer price for wheat for the 2023 winter season.
“The floor producer prices and marketing arrangements for maize, traditional grains, soyabean, sunflower for the 2023 marketing season pronouncement is key to ensuring that farmers receive viable strategic crop producer prices.
“The wheat pre-planting floor producer price for the 2023 winter production season will incentivise farmers to commit more land under wheat production this season. The marketing and pricing system being proposed is consistent with achieving both food and nutrition security and macro-economic stability,” he said.
The floor producer price was determined based on the approved pricing policy which uses a standardised production model, cost-plus pricing model, an average yield level and a 15 percent margin above break-even price and took into account submissions from all stakeholders.
For maize and traditional grains, the GMB floor producer price is US$335 per tonne, with US$200 in foreign currency plus US$135 in local currency.
Millers pay GMB a small mark up, all on the local currency component.
The GMB will be selling maize and traditional grains to millers at US$368 per tonne, paid as US$200 in foreign currency plus US$168 in Zimbabwe dollars at the interbank rate.
For soyabean, the floor producer price will be US$580 per tonne paid to farmers by GMB with US$348 in foreign currency plus US$232 in local currency at the interbank rate.
Oil expressors will pay GMB US$638 a tonne, paid as US$348 in foreign currency plus US$290 in Zimbabwe dollars.
For sunflower, the floor producer price will be US$696 per tonne and will be US$418 in foreign currency plus US$278 in local currency.
Oil expressors will pay the GMB US$765,6 per tonne with US$418 in foreign currency and US$347,6 in local currency.
The pre-planting floor producer price for wheat was set at US$520 per tonne. The GMB exit price of wheat to millers for current stocks of wheat will be reviewed to US$572 per tonne paid as US$300 in cash and the remaining US$272 in local currency equivalent.
Last season, the producer price for maize and traditional grains was increased from $75 000 and US$90 per tonne to $100 000 plus US$90 per tonne. GMB paid $228 666 and US$90 per tonne for soyabeans up from the previous price of $171 495 plus UD$90 per tonne.
Zimbabwe Farmers Union (ZFU) secretary-general Mr Paul Zakariya said he was grateful for the positive development shown by the Government adding that the greater part of foreign currency is a good direction in farming.
“We want to ensure that farmers get value for their money since input prices are high as well as cost of production. There is also a need to strengthen our currency by managing the exchange rate. This is not bad, we are still grateful,” he said.
Mr Zakariya also emphasised that there is a need to pay farmers on time and in full so that farmers enjoys their fruits adding that delay in paying farmers will result in failure to prepare for the next season.
Zimbabwe Indigenous Women Farmers Trust president Mrs Depinah Nkomo applauded the Government for announcing the producer prices but said farmers expected a maize producer price that is higher than US$335, adding that the cost of production is relatively high.
“We, however, expected a higher price for maize considering that it’s a staple food. Majority of farmers are in maize production and they enjoy it. We want farmers not to lose interest and continue their hard work in farming. Yes, we also have many farmers who are in traditional grains and we persuade them to keep on planting as they are drought resistant crops. We also feel this year there is a possibility of a good harvest. We expected higher prices in all crops but reviewing producer prices is a positive initiative in farming seasons as it guides farmers,” she said.
Zimbabwe Commercial Farmers Union (ZFCU) president Dr Shadreck Makombe said he is grateful for the Government’s initiative in recognising and supporting farmers adding that the move is really appreciated.
“This is a welcome development but what we are appealing for is timeous payments so that farmers are able to back and continue with farming. The summer season is ahead of us so this means if we get paid on time we can adequately prepare for the next season. Failure to get payments on time will affect the next season’s operations,” he said.
Government also resolved that: GMB be allowed to chair their very modest mark-ups when selling strategic commodities to millers to reduce over reliance on the fiscus for operational expenses; that registered millers continue to be exempt from the retention specifically to purchase grain from registered contractors, self-contracted farmers, and GMB; and that all registered members of contractors be exempt from the retention and Inter-Mediated Transfer Tax for the purchase of grain from their registered farmers and self-contracted farmers in order to ensure that there is a level playing field between GMB and the contractors.
The ministers said the marketing and pricing system was “consistent with achieving both food security and macroeconomic stability” and took into account the four categories of farmers.
These are farmers financed under the Climate Proofed Presidential Input Scheme (Pfumvudza/Intwasa), self-financed farmers, National Enhanced Agriculture Productivity Scheme financed farmers supported by AFC and CBZ and those financed by private contractors.
The ministers also said the proposed floor producer prices for maize, traditional grains, soyabean, sunflower and wheat are obligatory prices for commodities being purchased by the GMB.
GMB will only purchase strategic commodities financed under the Presidential Input Programme as well as by self-financed farmers. All contractors including the Food Crop Contractors Association (FCCA), CBZ and AFC are obligated to buy back contracted crops at market prices while self-financed farmers will sell to the best advantage on the market or to GMB.
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