Govt makes good on fertiliser, seed debts

via Govt makes good on fertiliser, seed debts | The Financial Gazette 24 Oct 2013

Recent payments of debts owed to seed houses and fertiliser companies for inputs advanced to government in previous agricultural seasons has breathed life into the agricultural sector.

Prior to this, government owed fertiliser companies US$32 million in unpaid debts while seed houses were owed around US$18 million.

About US$21 million has since been paid out, with seed houses receiving US$10 million while fertiliser companies got US$1,4 million.

The US$9,2 million balance has been channelled towards farmers for grain delivered to the Grain Marketing Board.

Because of the payments, seed and fertiliser companies last week said they can now afford to pay contract farmers what they owed them.

They have since confirmed receiving the part payments, which will help ease the severe liquidity crunch blighting  their cashflows.

In addition, the Agricultural Ministry has received US$50 million from Treasury of which US$40 million would be channelled to fertiliser companies for their deliveries this season while US$10 million would go to the seed companies for this summer cropping season.

“What is now left is for farmer unions to encourage their members to produce,” said Agriculture, Mechanisation and Irrigation Development Minister, Joseph Made.

Pioneer Seed House managing director, Daniel Myres, said the money received would help to pay their creditors.

Windmill marketing executive, Wilson Gopoza, said his company was now in full production adding that they have enough stocks of Compound D, Compound C and Ammonium Nitrate fertiliser.

He said, “We have working arrangements with all the organisations and individuals that owe Windmill to ensure that the money is paid in so as not to cripple operations of Windmill.”

Sable Chemicals operations manager, Allen Manhango, said they were producing an average of 7 000 to 9 000 tonnes of fertiliser per month, which is, however, far below their capacity.

Manhango said if Sable Chemicals secured funding they would be in a position to increase production.

While Sable Chemicals does not deal directly with government, the company which is the sole producer of ammonium nitrate fertiliser (top dressing), distributes its product through such firms as Windmill.