Panicky govt starts importing grain

Deliveries plummet 77%, Zim to fork out US$300m

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LIVINGSTONE MARUFU

The government has begun the importation of 1.2 million tonnes of grain from South American countries after deliveries to the Grain Marketing Board (GMB) plummeted by 77 percent during the five months of the selling season as farmers hold on to their grain because of low prices.

Grain deliveries have reached 184 757 tonnes during the five months of the grain selling season down from 810 173 tonnes delivered during the same period last year, a move which has jolted government into action.

The low deliveries could harm the already fragile economy and destabilise the government’s operations as panicky authorities turned to imports from Argentina and Brazil to ensure the staple food is available.

Maize is Zimbabwe’s staple grain that traditionally impacts the country’s economy given its skewed influence in determining inflation rates of the consumer price index that determines the average rise in the cost of living.

The shortage of grain has seen a spike in prices with the price of a 10kg bag of mealie meal shooting to ZWL$35 from around ZWL$13 in July.

GMB communications manager Muriel Zemura told Business Times that Zimbabwe was expecting its first batches of imported grain in the next few weeks to supplement the local deliveries which remain low. “As of August 29 2019 the GMB had received 184 757 tonnes of maize from local farmers, this is a fall from 810 173 metric tonnes received during the same period last year. We had earlier planned that the country was going to import around 900 000 metric tonnes but given the low deliveries the figure might rise to 1.2 million metric tonnes of maize,” Zemura said.

“We had initially targeted a total output of 700 000 tonnes, but given the way local farmers are delivering the grain, we are not sure how many tonnes we might have until December.”

The government previously estimated that Zimbabwe would have a total output of over 700 000 tonnes of grain and experts say it might be forced to review the projected output downwards given the low deliveries. The government has reviewed the maize producer price by 50 percent to ZWL$2 100 a tonne from ZWL$1 400 in July in an effort to encourage farmers to deliver their grain to GMB.

This was the third time in 2019 that government had reviewed the maize prices. Maize prices were reviewed from ZWL$726 to ZWL$1400 and now to ZWL$2100. Due to drought and arbitrage opportunities farmers believe that they can still get more from their cereal as they are some middlemen who are buying at US$180 per tonne. Zimbabwe is expected to fork out over US$300 million to import maize from Brazil and other South American countries.

The development will further burden the already struggling Treasury and will cause more problems for the bedridden economy as more foreign currency is needed to import the cereal.

Zimbabwe Farmers Union executive director Paul Zakariya said: “The government should continue to come up with more incentives to lure farmers to deliver their crop to GMB. And also due to the inflationary environment that we are in, timely payment of farmers is key.”

The government has started distributing grain in many urban centres, including Harare to cushion the poor from hunger. Agriculture analysts say Zimbabwe could use more forex to import given that Zambia and Malawi were also destroyed by both Cyclone Idai and El Nino and the fact that Beira port will not be fully functional this year given the magnitude of destruction.

The 2019/20 ZimVAC Rural Livelihoods Assessment projected that approximately 28 percent (2.4 million people) of the rural population shall be food insecure during the peak hunger period (January to March 2020). This means food insecurity prevalence is 51 percent, for the rural households, an increase from 28 percent projected in 2019.

Matabeleland North has the highest proportion of food insecure households at 58 percent while Mashonaland Central and Midlands have the lowest at 47 percent. The government believes that the food insecure rural households require a total of 720 707 tonnes of cereal to meet their needs over 13 months and the food insecure households require 500 320 tonnes of maize during the same period.