THE Small to Medium Millers Association of Zimbabwe (SMMAZ) has proposed to buy grain from the Grain Marketing Board in foreign currency as part of the organisation’s efforts to complement Government in incentivising farmers to deliver cereals to the parastatal. Farmers have not been delivering gain to the GMB prompting Government to increase the producer price and introduce a foreign currency payment component.
On Tuesday, Cabinet approved a review of the price of maize to $75 000/ per tonne plus a fixed early delivery incentive of US$90 per tonne to incentivise farmers. The early delivery incentive, which will be extended to other crops such as traditional grains, sunflower and soyabean, is payable to July 31 2022, and applies to all deliveries made since the commencement of the marketing season.
SMMAZ said their proposal to buy grain in foreign currency was necessitated by the current situation where there were low deliveries of grain by farmers, and the downstream delays in grain allocations to millers which was affecting the viability. “Currently, GMB is not receiving adequate deliveries as farmers are essentially holding out to be paid in foreign currency to preserve value and be able to purchase inputs for the next farming cycle.
“The imported stocks of grain coming into the country have also influenced the farmers perceived value of maize, as that maize is being sold to millers in US dollars at around US$250per tonne,” said the millers. “This has led to side marketing of grain to obtain greenbacks, and thus resulting in poor deliveries of grain to the GMB. Seeing no material difference between local and foreign maize; and with a bias towards supporting our own farmers and industry for sustainable economic growth and development; we have opted for this route to assist in breaking the impasse between Government and farmers”.
SMMAZ chairman, Mr Davies Muhambi, said millers were supporting Government’s initiatives to have grain delivered to the GMB. “We welcome the latest price adjustments made by Government. We are in the same direction with Government. We have been allowed to import grain but we are also considering the plight of our farmers. “It is prudent for us to first support our local farmers before we import grain from other countries. When we import there are issues of handling that comes into play. So it is best that we support our own farmers,” he said. Mr Muhambi said importing from others countries meant exporting jobs.
“When we buy imported maize or maize meal, we do not only export farming jobs, but we also export confidence in growing service, viability, farmers and the integrity of our own staple. “We are strongly convinced that we would much rather support our local farmers first before foreign entities, and preserve our hard-earned forex, which we can then employ in different sectors of our economy and/or employ it in value addition within the milling industry,” he said.
The millers believe paying local farmers in foreign currency and not at the auction rate, will ease the current teething problems and improve efficiencies, confidence and viability in the entire grain production and milling sector value chain. “It will bolster relations between our Government and farmers, which are essential in creating sustainable agro-industrial growth,” Mr Muhambi said. The millers however, expressed concern over the delays in grain allocation by the GMB. Some of the millers said they were yet to receive grain while their funds were still held up with the GMB.
According to the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development’s Second Crop and Livestock Assessment report, the country is expected to harvest an estimated 1 557 914 tonnes of maize and 194 100 tonnes of traditional grains for the 2021/22 summer cropping season. Although there has been a decrease in cereal production from last year’s harvest, when taking into consideration the amount of maize and traditional grains in the Strategic Grain Reserve (SGR), Zimbabwe will still have a surplus.