Source: Farmers object to GMB maize price | The Herald September 14, 2016
Elita Chikwati Agriculture Reporter
Farmers have raised concern over Government’s intention to align the Grain Marketing Board floor price with the landing cost of imported maize starting from the 2016 /17 agricultural marketing season.
According to a proposal from Government, GMB will be buying maize from farmers at a price equal to the landed cost of the cereal crop.
GMB is offering $390 to farmers, while Government is importing maize at a cost of between $280 and $350 per tonne.
Announcing the Mid-Term Fiscal policy recently, Finance and Economic Development Minister Patrick Chinamasa, proposed that the GMB maize floor price be gradually converged with the import parity price.
Minister Chinamasa expressed concern that GMB was paying high prices for maize and some middlemen were taking advantage of that to buy grain at low prices from farmers for resale to GMB depots.
“The high prices being offered by the GMB are creating opportunities for arbitrage, with middlemen buying from farmers at $240 and reselling to the parastatal at $390.
“The high prices are constraining the fiscus, while the intended beneficiaries and the desired outcome of boosting grains production are not being achieved.
“An appropriate pricing policy is, therefore, that which ensures viability and efficiency of our farmers while at the same time avoiding the subsidy burden on the fiscus.
“I therefore propose that we gradually converge the GMB floor price with the import parity market price from the 2016 /17 agricultural marketing season, mindful of the necessity of guaranteeing viability of our farmers,” he said.
He called on farmers to work hard to get high yields so that farming remained viable.
Zimbabwe Commercial Farmers Union president, Mr Wonder Chabikwa, said the move of aligning the producer price to the import parity price was good and should be spread to input prices as they made local production more costly compared to other countries.
“The $390 price was to cushion farmers against the high costs of production. Our cost of production is not competitive. We pay high power and water charges, farmers in Zambia do not pay for water. Farmers in other countries have subsidised inputs and electricity charges.
“If we use import parity prices for everything, we will have no problems,” he said.
Mr Chabikwa said if inputs prices remained the same, farmers would be in a worse off situation.
“I hope Government will make necessary adjustments. Our regional counterparts make profits even when they have low yields because their inputs costs are low. Farmers should increase productivity but if fertiliser is expensive they will not apply adequately and this affects yields,” he said.
However some experts expressed concern that this would force farmers to grow other high value crops instead of maize, thereby compromising on national food security.
Zimbabwe Farmers Union agriculture economist, Mr Prince Kuipa, said farmers could shift to other high value crops.
“After factoring in transport costs and other charges imported grain remains cheaper than local maize. GMB was paying a subsidised price. The $390 was a higher price in the region.
“If Government removes this subsidy, farmers will be disadvantaged. They will get less money than the $390 they are currently getting. Production costs have remained the same. Fertiliser, chemicals and fuel prices have remained the same.
“Farmers make informed decisions and they may move to sugarbeans and soyabeans. They may continue to produce maize but on a small portion to ensure household food security and this will have a negative impact on the national food security,” he said.
Mr Kuipa said most farmers were getting yields of 0,8 tonnes per hectare and the adjustment in the produce price will further worsen their plight,” he said.