eBusiness Weekly
The country’s biggest farmer representative body on Thursday welcomed the new increased producer prices for maize and traditional crops announced by the government earlier this week.
The government on Wednesday reviewed up the producer price for maize to
$6 958 per tonne from $4 000, and that for traditional crops to $7 260.
In making the adjustments, the government said it would help farmers to remain viable, and withstand increasing farming input costs.
More importantly, in the wake of a severe drought, the move was meant to encourage farmers to deliver their produce – particularly the staple maize crop – to the official national grain storage company, the Grain Marketing Board, instead of private buyers.
Zimbabwe Farmers Union director Paul Zakariya said the new floor price for maize and traditional grains, though still unable to cover the production costs in full, was welcome.
“For farmers, any upward movement of producer prices is a welcome development. Farmers were also watching the import parity and saw that the local price is much lower, so going close to the import parity is a very good development and it will encourage farmers to release their produce,” he said.
“A jump from $4 000 to $6 958 (for maize) is definitely a welcome development, but we will need also together with the government, to be watching the market so that we don’t wait for too long before adjusting producer prices to allow our farmers to go back to the fields.”
Zakariya said there was also need for government to ensure that the prices of inputs were stabilised.
“What we need to work on are the input costs which are currently too high than what farmers can afford and that’s where the profit margins are actually eroded. So we need mechanisms to stabilise (the) currency, so the Ministry of Finance has to really work on (the) strategy that could stabilise our currency to ensure that margins are not eroded on the part of our producers,” he said.
He said it was demotivating that farmers were at times buying inputs at United States dollar indexed prices.
“What is obtaining in the market is all our inputs are tracking the parallel market foreign exchange rate and not the official exchange rate, so that is where most of our farmers tend to lose value.
“We need to make sure that input costs are managed and that our farmers have low production costs. If the production costs are low, then the markets are stable and a currency is stable, then our farmers retain value,” said Zakariya. – New Ziana
