Review producer price as per exchange rate

December 23, 2021

LIVINGSTONE MARUFU

 

Farmers want the government to review the pre-planting maize producer price according to the obtaining exchange rate on the parallel market to protect producers against ravaging inflation and encourage selling of maize through formal channels.

On Tuesday, the Grain Marketing Board (GMB) announced that a tonne of maize will be pegged at ZWL$58 553.25, traditional grains at ZWL$70 263.90 and soyabean at ZWL$125 530.17.

Government is setting pre-planting producer prices in a bid to motivate farmers to grow more.

However, farmers contend that they will realise much from their produce due to the galloping prices of inputs.

Farmers bought a 50 kilogramme bag of compound at US$30, top dressing fertiliser at US$40 per 50 kilogramme bag, a situation that could drive side-marketing as farmers utilised US dollars on their inputs.

Zimbabwe Commercial Farmers Union president Shadreck Makombe told Business Times that the current prices are indicative of what the prices will be like in April but given the inflationary environment there is a need for a review.

“Currently, the prices are good  as they are above import parity. However, given the volatility  of our exchange rate, there is a need to review prices according  to the obtaining rate of the day at the time of selling to encourage farmers to sell to the Grain Marketing Board.

“When the government set the producer prices the amount was making sense but with inflation galloping, farmers will not get returns,” Makombe said.

He said authorities should move with speed to woo farmers to sell to the GMB, otherwise the country’s bumper harvest will count for nothing when it is not channelled into the formal sector.

The ZCFU said only contracted and Command Agriculture farmers have an obligation to sell to GMB. However, with vultures circling the maize with their hard currency, farmers could be tempted to sell to them.

“We do not encourage such acts of side-marketing but without price reviews, there is a possibility of rampant side marketing and we don’t want that,” Makombe said.

Zimbabwe Farmers Union secretary general Paul Zakariya said the pre-planting producer prices had been well received and helped the farmer to plan and make informed decisions.

“There is a need for the authorities to contain the haemorrhage exchange rate if we are to maintain the same producer price to ensure viability of the farmer,” Zakariya said.

“Producer price should be in tandem with production costs to ensure farmers go back to the field.”

He said there is need for a review of the pre-planting price if the exchange rate is not going to stable up to April.

The grain selling season kicks off on April 1 .

The Grain Marketing Board has  87 depots to collect grain and buy grain from.

 

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