Forgettable year for farmers as produce prices plummet | The Herald

via Forgettable year for farmers as produce prices plummet | The Herald December 24, 2013 by Elita Chikwati

The year 2013 has been a difficult one for many farmers, especially after coming out of a drought that ravaged much of the country last year. Farmers continued to struggle to produce with limited financial assistance from banks as the lenders demanded collateral that many did not have.

High inputs costs, unpredictable rains and late payments by the Grain Marketing Board, among other factors, also affected farmers’ preparations for the main farming season, which started a few months ago.

There was no joy for cotton, maize and wheat farmers as producer prices remained low, forcing some to switch to tobacco, which has become more lucrative.

This means that the golden leaf remained the crop of choice as farmers pocketed a collective US$610 million from 166 million kilogrammes of flue-cured tobacco produced this year.

Tobacco
The favourable price of tobacco attracted many farmers, especially those who had been growing cotton.
Unlike in maize where farmers either spent more than six months waiting for their money from GMB and in cotton where farmers do not have much say on the price, tobacco farmers got their cash soon after selling their crop.

This has seen an increase in flue-cured tobacco production by 15 percent from 144,5 million kg in 2012 to 166 million kg in 2013.
The seasonal average price per kg for flue-cured tobacco was US$3,67 comparing to US$3,65 achieved in 2012.
The number of registered growers for flue-cured tobacco increased by 27 percent to 91 278 this year as compared to 86 057 in 2012, of which over 80 percent are small-scale growers, working an average of 1,3 hectares each.

The future of the tobacco industry looks bright, despite the efforts by the World Health Organisation to ban the crop because of the side effects of smoking tobacco.

The increasing cigarette production in China is definitely set to influence more tobacco growing in Zimbabwe since the Asian country is the biggest buyer of the local crop.

Although there have not been major challenges in the marketing of tobacco during the 2013 selling season, farmers continued to complain over the price ceiling of US$4,99 per kg.

This is the third year that the price of tobacco at the auction floors has failed to surpass US$4,99 per kg, while at the contract floors the prices were mostly above US$5 per kg.

Side marketing has also remained a scourge as some growers sell their crop using their colleagues’ growers’ numbers to avoid paying their debts.

Some farmers complained during the 2013 season of contractors who gave them inadequate inputs, while other contractors were accused of inflating input prices.

Cotton
There was much debate on the future of cotton production in the country, considering the problems of low prices that saw many farmers shunning the crop for tobacco.
This resulted in cotton production declining by 48 percent as traditional growers switched to more lucrative crops.
Production fell from 350 000 tonnes in 2012 to an estimated 140 000 tonnes this year, with the area planted also declining from 450 000 hectares to 241 849 during the same period.
Most growers demanded a price of above US$1 per kg, while buyers argued that they could not increase the price beyond US$0,58 cents per kg as it was determined on the international market.

This resulted in some farmers withholding their crop, while others turned to side markets.
Cotton growers are yielding about 700kg per hectare, which is too low compared, to the average world yield of 1 700kg per hectare in Australia, which is achieved through the application of better technologies and methods.
Perhaps the situation will improve this season as contractors and farmers unions have agreed to give farmers a minimum input package with adequate fertilisers to boost yields to at least 1 200kg per hectare.

Wheat
Wheat production continues on the downward trend, declining from 33 700 tonnes in 2012 to 24 700 tonnes this year. Government had planned to raise US$88,4 million to produce 160 000 tonnes of wheat, but this did not happen.
Grain millers who promised to fund wheat production withdrew at the last minute citing the absence of a regulatory framework to guide the contract system.

Most farmers were not willing to grow wheat this year because of the high risk associated with the crop.
Constant power cuts, coupled with inadequate funding, also forced farmers to switch to other crops.
Some farmers complained that the US$400 per tonne being offered by the GMB this year was not viable, considering the high production costs of around US$1 200 per hectare.

Maize
Maize production declined from 968 000 tonnes in 2012 to 798 000 tonnes this year, mainly due to lack of funding and poor inputs supply.
Many farmers complained of high fertiliser costs.
Farmers were also affected by the GMB’s late payments for the grain delivered and were as a result hamstrung in the purchasing of inputs.
This year, the Government’s inputs programme benefited 1,6 million small-scale and communal farmers who received seed, fertilisers and lime.

Despite the problems associated with maize production, the crop remained the crop of choice for many farmers, considering its status in maintaining food security.

Funding
Banks set aside almost US$1 billion for the 2013-14 farming season, but a negligible number of farmers managed to access the funds due to the demand for collateral by the financial institutions. Banks wanted title deeds of immovable property, but many new farmers only have 99 year-leases and offer letters as proof of land ownership.
Unfortunately, banks did not consider the two good enough.

Farmers’ unions lobbied banks to accept livestock and other farm machinery such as tractors as collateral, but this failed.

Horticulture
Production of horticultural crops has been hampered by cheap imports of tomatoes, bananas, potatoes, cabbages and onions which have flooded traditional markets such as Mbare Musika and local supermarkets.
Farmers have called upon Government to regulate imports to improve marketing of their crops.

Livestock
The sector has been affected by the drought which destroyed pastures during the last season, resulting in low production — especially in Matabeleland, Midlands and Masvingo — where most farmers are in cattle production.
Affected farmers had to import grass and hay from areas of supply, while a few bought stock feeds from retailers.
Government urged farmers to sell unproductive stock to raise funds to buy stock-feeds for the remaining herd.
Government, farmers’ unions and non-governmental organisations ran feed-lot feeding programmes for livestock farmers in the drought-stricken areas.

Government, in partnership with Agribank, is finalising modalities to assist livestock farmers with funding.