THE ZIMBABWEAN government plans to transform its model for funding agriculture as of next year in a way that stimulates industrial activity and growth, a top government official has said.
Agriculture minister Joseph Made said beginning next year, government would stop giving subsidised inputs directly to farmers and start subsidising manufacturing companies to make sure prices of inputs are more affordable and at the same time increase production.
“This way of supporting farmers is going to be the last time government does it in this form and structure. This is what was agreed also in cabinet yesterday,” Made said at a joint press conference with Finance minister Patrick Chinamasa.
“The important thing is to get our manufacturing sector. You might recall we did work with seed houses some years back and today we boast of adequate seed. We supported farms growing seed with machinery and inputs.”
Made said government was currently ensuring support was available to fertiliser companies to import fertiliser for the current season.
“For a long time we have been arguing for the policy that says that subsidising manufacturing is the preferred form because it assists us as agriculture not to be involved in the day to day allocation of inputs to farmers, so if we subsidise the manufacturers of inputs, the farmers will afford the inputs,” he said.
“Number two, if the farmers are paid timeously they will be able to pay for their inputs. Government will only intervene if there is an external cause like a drought.”
At the press conference, Chinamasa said government was availing US$161 million worth of input support to 1,6 million households across the country in old resettlement, small scale and A1 farming areas for the 2013/14 farming season.
The money will also be used for supporting livestock production during the season.
The funds will be used to supply households with 10kg of maize or grain seed, 50kg of compound D fertiliser, 50kg of ammonium nitrate fertiliser and 50kg of lime.
Of the US$161 million, US$39,1 million would be channelled towards seed purchasing, US$50,1 million for purchasing compound D, US$57 million for ammonium nitrate and another US$11 million to buy lime.
Government said it would make available an initial US$40 million down payment for fertiliser while another US$10 million would be availed to the seed houses towards payment for seed supplies in support of the 2013/14 season.
Other costs include rehabilitation of District Development Fund tractors and payment of GMB handling services at US$530 000 and US$2,6 million respectively.
“I have a feeling we will require more money for the GMB handling services,” Chinamasa said.
In addition to the input support programme, government said it would clear outstanding payments to input suppliers which stood at US$11,8 million.
“Government is therefore pleased to advise that today we have disbursed the outstanding US$11,8 million to the seed and fertiliser companies,” Chinamasa said.
Pannar was paid US$2 million while Pioneer and Seedco were paid US$3,7 million and US$4 million respectively.
The balance was paid to fertiliser companies.
Furthermore, Chinamasa said government had also disbursed the outstanding US$9,2 million payment to farmers for the grain deliveries to the Grain Marketing Board in the current grain marketing season.
“As I speak I am told farmers got wind of the fact that we are paying for deliveries and I am told new deliveries worth US$2 million have come in and we are saying deliver we will pay,” added Chinamasa.
The Food and Agricultural Organisation, in conjunction with other partners has indicated its readiness to partner government to the tune of US$19,25 million, targeting 77 800 smallholder farmers.
The public sector has secured collaboration with the private sector geared at providing financial support in production inputs to the tune of US$120 million.
Currently, a facility for A2 farmers is being worked on with banks.
Seed companies indicated that they were holding 56 174 tonnes of maize seed, which was enough to provide for the scheme.
Chinamasa said the fertiliser industry required fresh capital to increase capacity as it fell far short of demand. He said the national requirement for compound D fertiliser was 200 000 tonnes while that for ammonium nitrate fertiliser is also estimated at 200 000 tonnes.