Source: Wheat farmers squeal over high bank rates -Newsday Zimbabwe
WHEAT farmers have said despite projections of a higher output this year, they are still dogged by several problems such as high interest charges and delayed payments by the Grain Marketing Board (GMB).
In May, the Reserve Bank of Zimbabwe drastically revised its interest policy, which pushed interest rates to 200%, from 120% previously.
The move was part of the central bank’s tough measures to contain inflation.
Farmers’ concerns were raised during a wheat pre-harvesting conference held by the Zimbabwe Wheat Board in Harare.
The conference was held in the wake of government declaring a bumper wheat output of up to 380 000 tonnes this year, enough to feed the nation.
Zimbabwe requires between 350 000 and 450 000 tonnes of wheat per annum. However, some estimates put this year’s output at about 336 000 tonnes.
Commercial Farmers Union (CFU) chief economist Antonette Chingwe said farmers were expecting an increase in wheat output.
“There are issues that need to be solved so that we are able to export our wheat,” she said.
“Another challenge we have is access to funding. It is difficult for farmers as the borrowing costs are too high.“These result in reliance on contract farming,” she said, as she expressed reservations over the contract farming model.
“There has been an outcry over contract farming in Zimbabwe.”
Farmers complain that corporates bankrolling their operations take most of the cream and leave them in abject poverty.
She said requirements by banks for collateral on loans have been a limiting factor.
“Issues of collateral are a limiting factor to accessing funding,” she said.
“The main challenge centres around inflation and an unstable exchange rate. Fertiliser costs are also a challenge and this needs to be addressed as it constitutes 40% of wheat production (costs),” Chingwe told the conference.
“Fuel is also another challenge that we face as farmers due to erratic power outages, which is a recurrent challenge that makes production models unsustainable,” she added.
Zimbabwe Farmers Union business development manager David Chiseure said wheat farming had been held back by vandalism whereby farm infrastructure was destroyed affecting wheat irrigation and harvesting.
He said farmers were concerned that while culprits were known, they were not detained.
“The culprits are known. They are arrested, but they are released,” Chiseure said.
“It is our wish and hope that the authorities and courts do their job. In relation to power cuts, there is no prioritisation of wheat farmers.”
Chiseure added that it was difficult for farmers to service loans when payment from buyers such as GMB were erratic.
“How can farmers pay back when they are not paid by government?” he asked.
“Farmers need to be excluded from defaulters’ list because they wait for payments from the GMB.”
CBZ Agroyield chief executive officer Walter Chigodora said it was important for funders and farmers to engage.
“We should sit down and engage,” Chigodora said.
“There is need for effective communication because Zinwa pricing and payment plans, including Zesa prioritisation of electricity distribution, are skewed against wheat farmers,” he added.