The Government’s awarding of a 30 percent foreign currency incentive for maize deliveries to the Grain Marketing Board (GMB) has come as a pleasant surprise to farmers with their unions calling for a replication of the decision for other crops. Finance and Economic Development Minister Professor Mthuli Ncube on Saturday announced that the United States dollar incentive was meant to encourage early delivery of maize and other grains to the GMB for the 2021/22 marketing season.
The outstanding 70 percent will be paid in Zimbabwean dollars, while the US dollar component will be calculated at the prevailing willing buyer willing seller rate published by the Reserve Bank of Zimbabwe (RBZ) on the date of delivery. Payments will be backdated to the date of the first delivery this to GMB. Zimbabwe Commercial Farmers Union (ZCFU) president, Dr Shadreck Makombe described the announcement of the 30 percent incentive as a bolt from the blue that came unexpectedly saying farmers felt encouraged by the path the Government had taken.
“It is something in the right direction and lowers the Government’s importation bill as well and puts money into farmers’ pockets. Although farmers naturally would want a larger US dollar portion, every journey starts with the first step. Good times are beckoning in the future,” he added. Dr Makombe said the principle of splitting payments between US and Zimbabwean dollars was okay and appreciated by farmers as a sign of recognition by the Government for their toil adding that it would go a long way in motivating farmers to treat farming as a business.
Commercial Farmers Union (CFU) president, Mr Andrew Pascoe concurred with Dr Makombe saying the move by Government was positive and would enhance viability in grain production. “We await the implementation modalities, as we are not yet sure whether the US dollar payment will be in cash or nostro, however, it is the wish of farmers that this initiative be extended to cover other commodities this marketing season. “If this initiative had been announced prior to planting as a pre-planting incentive, farmers would have put more hectarage under grain crops to ensure food and nutrition security for the nation,” said Mr Pascoe.
An economist with the Zimbabwe Farmers Union (ZFU), Mrs Nyasha Taderera chipped in saying farmers appreciated the efforts by the Government in addressing grain producers’ concerns. Having a US dollar component as part of their payment will greatly assist in securing inputs and services that are difficult to acquire in Zimbabwe dollars, she further explained. “Farmers would even be happier if the producer price of $75 000 for a tonne of maize was to be reviewed upwards to counteract the negative effects of inflation since the day of producer price review,” observed Mrs Taderera.
Meanwhile, the Agricultural Marketing Authority’s (AMA) weekly commodity market Bulletin Number 18 of 2022 issued on May 3, 2022 revealed that a tonne of white maize was trading for US$287, 36 per tonne on the South African Futures Exchange (SAFEX) international commodity exchange market. This compares to US$271 per tonne that local farmers would have realised on the 10th of May if all their $75 000 per tonne of maize was converted to US dollars at the willing buyer willing seller rate of $277,03.