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Edgar Vhera
Agriculture Specialist Writer
EXPECTATIONS for a profitable producer price are running high among wheat farmers, as they wait for the Government to announce something that replicates the well rewarding pre-planting producer price it had set in March this year.
The Government had set the pre-planting wheat floor producer prices of $175 741,86 per tonne for ordinary grade with the premium grade fetching $193 316 per tonne.
The official exchange rate then was US$1 to $130,16 while for now both the auction and interbank exchange rate has reached $613,37 and $614,27 for US$1 respectively as of September 23. Farmers are therefore placing their trust on the Government to be alive to the development and adjust the price accordingly.
The high pre-planting producer price motivated wheat farmers to put more land under wheat allowing the country to surpass its target of 75 000ha to 79 000ha.
Commercial Farmers Union (CFU) president Mr Andrew Pascoe revealed that farmers who had started harvesting their wheat were eagerly awaiting the review of the wheat price by the Grain Marketing Board (GMB) so that they can start delivering their produce to its depots.
“Farmers who have started harvesting their early planted wheat are anxiously awaiting the announcement of the new price by the Government so that they can start delivering their crop.
“They are looking forward to getting a price higher than the import parity price considering that cost of production was very high this season as a result of increased fertiliser, chemical and diesel prices and other costs such as water and electricity.
“All what the wheat farmer is looking for is money that retains value to enable them to expand production next season,” said Mr Pascoe.
An economist with CFU Ms Antonette Chingwe pointed out that as wheat was a controlled product under Statutory Instrument 188 of 2021, they were waiting for the Government to review the price to allow farmers to recoup the production costs and get a decent profit from the sale of their wheat.
“We expect the Government to set a viable price paid in a currency that stores value or if paid in local currency it should be competitive and be responsive to market forces.
“The wheat break-even price for farmers is currently around US$650 per tonne.
“They need to make a reasonable margin for their operations to remain sustainable. Costs of inputs this season were very high especially for fertilisers, chemicals and diesel, which were mostly quoted in the US dollar,” said Ms Chingwe.
Zimbabwe Commercial Farmers Union (ZCFU) president Dr Shadreck Makombe echoed similar sentiments saying there was need for the price review to factor in the high cost of production this season.
“The production cost of wheat was about US$2 500 per hectare and with an average achievable harvest of 4 tonnes per hectare the price should be above US$700 per tonne.
“As was done to cotton, wheat farmers are expecting a split payment of 70 percent US dollars and 30 percent Zimbabwean dollar,” said Dr Makombe.
Zimbabwe Integrated Commercial Farmers Union (ZICFU) president Mrs Mayiwepi Jiti said since the day the pre-planting producer price was announced in March, prices of inputs went on an upward trajectory necessitating a review of the price upwards, if farmers are to stay in business.
“When pre-planting prices for cereals was announced by the Minister in March, prices of inputs have gone up subsequently affecting wheat farmers. Labour costs have gone up by about 50 percent to a minimum US$60 per month while fertiliser prices increased to a minimum of US$60 per 50kg bag for both Compounds and Ammonium Nitrate.
“Diesel is at around US$1, 70 a litre to mention just but a few of the cost items. The producer price must be increased to US$800 per tonne to enable farmers to cover costs and retain a small percentage of net profit,” said Mrs Jiti.
Projections of total variable costs (TVC) incurred from planting to final disposal of wheat are in the range of US$2 000 to US$3 000 per hectare.
At a wheat price of US$500 per tonne, the break-even yield should be between four and six tonnes per hectare for the US$2 000 and US$3 000 TVC per hectare operations respectively.
A US$800 per tonne price has the break-even yields of 2, 5 and 3, 75 tonnes per hectare for US$2 000 and US$3 000 TVC per hectare operations respectively.
The Government’s interventions through the Presidential Input Scheme (PIS) coupled with private sector interventions under the Food Crop Contractors Association (FCCA) as well as funding under the CBZ Agro-Yield, AFC Land Bank and self-financing have capacitated the country to plant over 78 000ha of wheat surpassing the set 75 000ha target.
A good wheat producer price will promote the expansion of the hectarage and allow the country to export excess produce to generate foreign currency in future years.
Online Reporter