AMA seeks funders for production contracts

Source: AMA seeks funders for production contracts | Herald (Business)

Business Reporter
THE Agricultural Marketing Authority (AMA) has invited agribusinesses and other players that depend on agricultural raw materials to enter into production and marketing contracts with farmers for the oncoming season.

AMA has called for the contractors to secure at least 40 percent of their annual raw material requirements through contract growers, which would create significant job and business opportunities for farmers.

Contract farming can be defined as agricultural production carried out according to an agreement between a buyer and farmers, which establishes conditions for the production and marketing of a farm product or products.

It involves agricultural production being carried out on the basis of an agreement between the buyer and farm producers.

Contract farming has the potential to promote agricultural productivity and farm income. Analysts say the model should be extended to emerging farmers who struggle to have access to finance for their productive endeavours.

Notably, AMA said value chain financing would play an important role in ensuring that strategic objectives of the Agriculture and Food Systems Transformation Strategy (AFSTS) and agriculture recovery plan are realised.

Agriculture, expected to grow by 34 percent this year after a good rain season that saw record grain output, is a strategic sector in Zimbabwe accounting for an estimated 16 percent of gross domestic product (GDP) while employing hundreds of thousands across the country.

The authority said initiatives to ensure contract production of agricultural raw materials was meant to encourage local sourcing of inputs, which would save the country foreign currency and create new jobs, and support growth of agriculture in Zimbabwe.

AMA, a state institution that regulates marketing of agricultural products in the country, said contracts for farmed inputs would enable contractors to ringfence their production requirements. This comes as the new farming season is set to commence on October 1, 2021 until September 30,2022.

“In addition, the authority is calling for contractors to secure at least 40 percent of their annual raw material requirements through contract growing. The Agricultural Marketing Authority is inviting contractors for the following crops: maize, soya bean, sorghum, sunflower, sesame and cotton,” AMA said.

The authority said companies or individuals who want to undertake contract farming during the 2021/2022 season were required to register or renew their licences in line with provisions of Agricultural Marketing Authority Act, Chapter 18:24, Statutory Instrument 147 of 2012.

AMA also extended invitations to institutions and individuals intending to buy, sell or manufacture agricultural inputs to register or renew their license in accordance with the relevant legal provisions.

The categories of the targeted industries  include fertiliser, seed, agricultural chemical, livestock and other agricultural input suppliers.

Once registered, AMA said, contractors, input manufacturers, buyers and processors were required to submit their returns on growers, input support levels, inputs (seed, feeds, chemicals, fertilisers) supply situation, product prices and purchases and processed products.

The authority said to curb side marketing, ensure orderliness and fair trade practices, review of SI 140 of 2013 (Grain, Oil Seeds and Products) and SI142 (Seed Cotton and Seed Cotton Products) had been made in order to protect value chain investments.

“The authority is encouraging contract arrangements in the livestock sector. A review of Statutory Instrument 129 of 2017 (Livestock Development Levy) to strengthen and protect contractors in this sector is now complete,” AMA said.

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