Price hikes blight agriculture rebound

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TAURAI MANGUDHLA

THE G o v e r n m e n t plans to anchor economic recovery on rebound of the agriculture sector may be thrown off balance due to the rising cost of inputs, limited investment in irrigation equipment and rolling power cuts.

Experts say Zimbabwe could experience one of its worst summer cropping season following a steep spike in inputs, a development that will affect many subsistence farmers. Subsistence farmers have to dig deep into their pockets for maize to feed their families while those who depend on their surplus will find the going hard.

As the country suffers an inflationary spiral, a 25kg bag of seed is selling for as much ZWL$1 300 while a 50kg bag of fertiliser is going for as much as ZWL$580. To produce a single hectare of maize, inputs alone could cost a farmer ZWL$10 000, beyond the reach of many given that the bulk of the formal workforce which is in the civil service still earn below ZWL$2 000 per month.

For government, Treasury should set aside funds to import maize and feed the population, putting pressure on the fiscus. Cash crops, in particular tobacco, will also suffer and result in a decline in export receipts. Zimbabwe Farmers Union managing director, Paul Zakariya, said the high cost of inputs largely remains the main threat to the success of the current agricultural season.

“The main challenge is that input prices are beyond the reach of many. Affordability is critical because as it stands most farmers have not much choice except to downsize,” Zakariya said in an interview.

“It will definitely be a situation where the yield per unit area may not be affected if there are no surprises like bad rains and pests, but the planted area will be less.”

Fears, however, remain as some farmers may struggle to procure enough inputs along the season and compromise the quality of their crop and therefore yields. Asked to hazard the likely impact of the prices on production, Zakariya said: “At the moment it will be very difficult to come out with an absolute figure. Inputs are not the only variable, there is rainfall, crop management and pests.”

Zimbabwe is expected to receive normal to above normal rainfall in the northern parts of the country while the Southern parts will experience normal to below normal rainfall during the first half of the cropping season, according to the Meteorological Department. In the second half of the season the entire country is expected to experience normal to below normal rainfall.

The ZFU will, between January and February, conduct the first crop and livestock assessment with its partners to see how much has been planted. A second crop and livestock assessment, whose focus on likely yields, will be done in between March and April. Technology such as GPS will be used.

Zimbabwe Tobacco Association CEO, Rodney Ambrose, said a council meeting will be held next week to look at the prevailing situation and propose solutions. It is at this meeting that an official ZTA consolidated position will be drafted. A significant chunk of tobacco goes under contract hence producers are to some extent cushioned from the growing input costs. Tobacco is key in Zimbabwe given it is second largest single foreign currency earner after gold.

Zimbabwe Commercial farmers Union (ZCFU) president, Wonder Chabikwa, said funding has been a major issue for agriculture in recent years. Command Agriculture, he said, improved productivity through provision of inputs, but it has been changed to a more complex system involving banks. “Banks and farmers have no good relations and the system is slow. Some farmers are yet to get vouchers and at times the vouchers are there, but there is no product,” he said.

Chabikwa said diesel shortages are also a major impediment. Previously, a special arrangement for farmers was made with diesel being distributed in the farming areas, but now the farmers have to queue at commercial fuel stations just like anyone else. Chabikwa also said pricing of inputs is a challenge.

“Prices are generally rated against the US dollar at interbank rate yet the farmer’s earnings are not being pegged against the interbank rate so we can’t afford inputs,” he said.

The ZCFU president said there is need for a bank that offers concessionary finance to agriculture and medium to long term funding for mechanisation. Efforts to get a comment from the Commercial Farmers Union were fruitless. Agriculture is key to the success of Zimbabwe’s economic turnaround strategy as it feeds into the country’s manufacturing industry.

In the 2020 National Budget, Finance Minister Mthuli Ncube said economic recovery of up to 3 percent is projected in 2020, primarily premised on a number of assumptions including expected better rainfall season supported by increased support towards rehabilitation and development of irrigation infrastructure to sustain agriculture activities. Ncube said better planning for increased agricultural production will also be crucial for food security and foreign currency generation. The Finance minister also said embracing Climate Smart Agriculture (CSA) will improve prospects for agriculture sector, which is projected to grow by at least 5 percent in 2020.

“This growth is attributed to a better rainfall during the 2019/2020 season supported by timely disbursements of inputs,” Ncube said, adding: “In line with this thrust, emphasis will be on better planning, shared financing burden between government and private players, productivity which also relies on irrigation and marketing systems which guarantee farmer viability.”

Ncube allocated ZWL$1,9 billion for capacitation of the Ministry of Lands, Agriculture, Water, Climate and Rural Resettlement. Deliberate efforts to support agriculture could, however, be frustrated as government has already noted there are greater chances that the 2019/2020 season will be another bad season.

“Such developments, if they materialise, may escalate government expenditure on grain importation, infrastructure rehabilitation and disease control. “The government is, therefore, creating a fiscal buffer to the tune of ZWL$165 million to cater for drought shocks, as well as strengthening the early warning systems,” Ncube said.

Other, drought proofing measures such as investment in irrigation infrastructure, dam construction and desalination as well as research and extension services, adoption of drought resistant varieties (traditional grains) will be put in place during the 2020 agricultural season.