‘Set up commodity exchange’

via ‘Set up commodity exchange’ | The Herald 1 July  2014

THE Zimbabwe Government should expedite the operationalisation of the commodity exchange which was first mooted in the early 1990s with the aim of providing an orderly and transparent platform for marketing agricultural products.
A commodity exchange facilitates the orderly trading of any agricultural product in the country.
Agricultural products traded on commodity markets across the world include wheat, barley, sugar, maize, cotton, cocoa, coffee, milk products, pork bellies and oil.
Zimbabwe Commercial Farmers Union president Wonder Chabikwa said operationalisation of the exchange was long overdue.
“The Government is taking too long to implement the exchange and the delay has a negative impact on farmers as this platform can stimulate circulation of money in the economy with benefits for producers,” he said.
Mr Chabikwa said farmers continued being subjected to inconsistent producer prices.
“Farmers are the ones that are being affected as private buyers are offering prices which are below expectation,” he said.
Finance and Economic Development Minister Patrick Chinamasa in December last year said the Government had approved the establishment of a special market for agricultural products.
“This should also offer scope for introduction of such schemes as the warehouse receipts system to enable farmers to borrow against their agricultural produce,” he said.
Minister Chinamasa added: “However, the operationalisation of the Agricultural Commodity Exchange has been delayed by the administrative challenges which have now been resolved. This now paves way for the finalisation of the remaining logistical arrangements and its speedy operationalisation.”
The idea of an agricultural commodity exchange was first mooted in the early 1990s when the Government committed itself to liberalise agricultural marketing which was under the Grain Marketing Board (GMB) for years.
It became apparent that an organisation was needed through which free marketing of agricultural commodities in the country could take place.
At a workshop held in Nyanga in 1992, it was recommended that a commodity exchange marketing system be implemented on an experimental basis as an alternative market for decontrolled commodities.
However, to date, the exchange is not functional. The GMB has been perennially failing to pay farmers on time, leading many to abandon controlled crops. — New Ziana