Economic Updates - Featured - December 9, 2020

Pre-planting producer prices weighes up

Farmers has expressed mixed feelings over the considered and approved pre-planting producer prices of maize, traditional grains, soya beans and cotton which were set in line with the upcoming 2021 Agricultural Marketing season.

Pre-planting producer prices were established as a signal that there is a ready market in which the government was ready to pay for and also to ensure farmer viability and incentivise the producers to grow these strategic crops.

In an interview with Business Mail, Zimbabwe Farmers Union (ZFU) Crop Specialist Simbarashe Muchena said the move by government was spelled in the Agricultural Recovery Plan.

“It is critical to have such announcements way ahead of each cropping season for decision making and we appreciate government efforts in committing to what is spelt by our Agricultural Recovery Plan.

“It is imperative to note that 2020/21 was predicted to be a better season in terms of rainfall performance therefore it has already motivated farmers to get into production,” Muchena said.

Pre-planting producer prices have been pegged in our local currency yet inputs prices are in foreign currency and that has been a cause of concern among farmers and their representative boards.

“It will be fair to extend the same principle to producer prices, we might not have enough foreign currency to pay farmers but bench marking producer prices in foreign currency at the time of contracting and effecting payments at the interbank rate will ensure profitable production,” Muchena said.

Vice President of APEX Council for Young Farmer Associations Baldwin Mazango said, even though the announcement by the government was a welcome move, it caught the farmers off guard.

“We would have appreciated if the government had announced the pre-planting prices as means to give room for proper planning for example approaching banks for loans,” Mazango said.

“However, government assured us that the whole idea was about food security as well cutting the import bill on food products as well as stimulating activity in agriculture since it is at the centre piece of the growth of the economy,” said Mazango.

Mazango also raised concerns over the prices that are quoted in USD$ yet the government announced the prices in a local currency, he said that this gave a conflicting signal in line with agro-business analysis of things.

“As farmers we are still confident in the system since the inception of the foreign currency system has brought stability to the economy, after all farming is a game of optimism, we are also hoping that the program can carry on up to 6 months so as to maintain sustainability,” Mazango said.

In order to promote the production of traditional grains, government also introduced a 20% premium on the price of maize which is going to be given to farmers who grow the crops.

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