LIVINGSTONE MARUFU
Local companies engaged in wheat contract farming project to harvest a record 80 000 metric tonnes this year , reflecting a 78% surge in wheat output from 45 000 metric tonnes harvested last year due to improved water and electricity supplies.
If achieved, this would significantly reduce import bills and save them a great deal of foreign currency.
National Wheat Contract Farming Committee vice chairperson Graeme Murdoch, told Business Times that improved production would help the country towards self-sufficiency.
“As a private sector we are expecting a huge jump in wheat output to between 75 000 tonnes and 80 000 tonnes due to abundant water and electricity availability,” Murdoch said.
He said improved supplies of electricity boosted this year’s winter wheat production. ZESA dedicated 100MW for winter cereal farmers.
Zimbabwe requires 360 000 tonnes of wheat each year, mainly for flour and bread.
However, Zimbabwe will still import various tonnes of wheat to blend the local and the imported wheat to bake a standard bread.
Local wheat is good for biscuits and self-raising flour as it does not experience very cold conditions which are needed to bake bread.
Wheat deliveries to GMB have started. Recently, Cabinet increased the wheat floor producer price to ZWL$55 517.69 per mt for ordinary grade wheat from around ZWL$43,000.
Government sets wheat premium grade at ZWL$66 621.22 per mt during the 2021 wheat marketing season from ZWL$53,000 last season.
The authorities said this will enable farmers to go back into production.
The upward review of the producer prices is being necessitated by changes in input prices which in turn resulted in higher production costs.
The government said farmers expect viability in their operations, and are grappling with cost increases in labour (51%); fertilisers, both compound D and ammonium Nitrate (27%); and tractor and equipment (144%).
The input increases have a net effect of a 32% increase on the total variable cost per hectare.
The net contribution of inputs to total wheat production costs in 2021 is labour(3.19%), seed (5.14%), fertilisers (26.15%), chemicals (3.20%) and operations accounting for 12.37%.
The biggest driver of costs is the cost of borrowing which stands at 40%.
A viable producer price will incentivise farmers to deliver their wheat crop to the Grain Marketing Board.
The harvesting of the wheat is expected to commence this week and should be completed by mid-November 2021.
