Maize Target Elusive as Prices Remain Poor

POOR price offered by grain buyers is likely to affect the total maize production during the 2009 – 2010 agriculture season and the projected 2,4 million tonnes of the crop is very difficult to achieve if the price issue is not resolved.

Farmers have not disposed off their crop from the last season citing very poor prices being offered and it would require attractive prices for them to sell their grain.
This has affected the country’s strategic grain reserves as very little grain has been delivered to the Grain Marketing Board whose silos are empty – yet there should be grain cover for at least two to three years.
Farmers are arguing that the current floor price of US$265 per tonne of maize would see them making a loss since it cost them more than US$300 to produce a tonne of maize last season.
However, the total production cost per tonne is likely to be lower this season since there has been a general drop in the price of inputs in the last seven months.
Last year, farmers were buying a bag of fertiliser at more than US$55, and there was massive shortage of the commodity and now it has gone down to US$27 and is currently readily available.
While there has been a drop in prices, it would not bring much joy to the farmers as they do not have the financial resources to meet the production needs for the coming season.
This is mainly because farmers have not been able to sell their crop citing poor prices and there is virtually nothing that is coming from the financial institutions.
Zimbabwe Farmers Union director Paul Zacharia confirmed that there was a crisis in the marketing of maize in the country as farmers were holding on to their grain.
“Many farmers still have their crops on the farms and we have been encouraging them to keep the grain for the coming season.
“Land preparations for the maize crop have been going on but there are problems there since banks are not doing anything towards funding of the crop yet maize production would require loans and there is no credit that is coming,” said Zacharia.
These problems could have been solved if companies were to offer inputs to farmers and recover their money when the crops are sold.
This is a very high risk area because their investment would be at the mercy of the vagaries of the weather and there are no clear laws protecting contract farming.
Lessons from the cotton industry where companies pour in money only to see others coming in to reap by offering very high prices would dampen the prospect of many contractors coming in.
“A scheme was launched two weeks ago where farmers receive seed and fertiliser but this is not enough as the farmers also need chemicals.
“These schemes are likely to give some problems as the production cost remains very high,” added Zacharia.
There are always problems with contract farming in an environment where there are no tight regulations or protection of investment as this makes it open to manipulation by players who are risk averse but would then pounce on the farmers after harvests.
Another problem is that there is no full protection of the farmers as they have to honour their obligations which may mean parting with their crop at a price which is very low.
Failure to increase maize production would add to the precarious food security situation in the country. Only when the country is able to meet its own grain requirements would food security be guaranteed.
Zimbabwe has not been food secure for close to a decade and it has been relying on imports to meet the deficit at a time when the country was faced with serious foreign currency shortages.
A total of 2,2 million tonnes of maize are required each year to meet the total consumption in the country and should the 2,4 million-tonne target be met, then the country would record a surplus for the first time in more than a decade.
Even if the price of maize produced in Zimbabwe were to be within the levels acceptable to the farmers, it remains to be seen how the millers would respond to this as they currently prefer imported grain to locally grown maize which is expensive.
The landed cost for imported maize from South Africa is around US$140 per tonne compared to the US$265 which local farmers would need.
Zimbabwe was once known for being one of the largest grain producers in the country but things have changed in the last decade to the extent that there was a time when the country was forced to import maize meal when most Zimbabweans  faced starvation.

Leonard Makombe

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