Natfoods targets 3000ha under wheat

LIVINGSTONE MARUFU

Listed agro-industrial firm, National Foods is targeting 3000 ha under its contract farming scheme in a bid to improve localised production of the cereal and reduce imports.

The contract farming arrangement will be administered by Paperhole Investments (PHI) Commodities.

The Natfoods scheme comes at a time when farmers are increasingly turning to contract farming and joint ventures for inputs and equipment at lower interest rates compared to banks.

For years, farmers have been stalked by financing problems, but the enactment of Joint Venture Act in May 2016 has seen companies like Natfoods partnering growers to improve productivity.

PHI local operations manager Graeme Murdoch told Business Times that Natfoods has intensified its 2020 wheat preparations.

The scheme is expected to cover around 60 farmers. “National Foods is planning to utilise 3000 hectares under the 2020 winter wheat contract farming scheme.

However, that hectarage may go down depending on the funding from the financial institutions,” Murdoch said.

He said the hectarage was s expected to go down this year due to funding issues and Covid-19 epidemic which hamstrung the economy in the past month.

He said the funding would not different from the previous years’ investments.

Murdoch said he was not ready to discuss the targeted hectarage of the private sector as there are still some finalisations to be made.

He said the Reserve Bank of Zimbabwe (RBZ) continues to provide assistance for the importation of key commodities (mainly wheat). Murdoch said Zimbabwe’s climatic conditions were not suitable for bread wheat production and there is always need to import to bake good quality bread.

The country’s wheat is mainly used for self-raising flour and biscuits, necessitating the need to import and mix the imported wheat with the local on 50/50 basis to cut costs.

“We are working very closely with the central bank and banking sector to manage our foreign currency requirements to import wheat. National Foods on its own can import its own wheat requirements but it is our hope that we can work with other companies in order to procure more wheat imports to ease bread shortages,” he said.

Murdoch said Natfoods will continue to invest in extending a pipeline of key raw materials.

The company also procures grain from local farmers and imports whenever there are shortages in the local market.

He said Natfoods has satellite machinery to dictate the number of hectares and harvest in the fields and is currently monitoring probable wheat yields. Zimbabwe requires between 350,000 and 450,000 tonnes of wheat per year but production has been declining due to inadequate funding.

Last year, Zimbabwe produced less than 100 000 tonnes of wheat, leaving the country to import more than 300 000 tonnes of wheat. In 2018, the country spent close to US$300m on wheat imports.

The company’s focus will be to improving efficiencies across all areas of the value chain to ensure quality and affordable products.

The group plans to fund further growth initiatives through retained profit and moderate levels of borrowing with new product lines planned to consolidate its position.

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