The Sunday Mail
>> Farmers spend $1 000/ha, earn up to $6 000/ha
>> Local inputs more expensive
>> Govt need to subsidise
The high costs of production in the agricultural sector are threatening to reverse the gains of the land reform programme, it has emerged.
When Government launched the fast-track land reform programme in 2000, its fundamental focus was to economically empower the racially deprived black majority through agriculture.
This was after the willing-buyer, willing-seller concept of land reform which was introduced in 1980 had failed dismally as a result of sabotage by the British government and white commercial farmers.
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Nevertheless, the Government still managed to provide land for over 200 000 A1 and A2 farmers despite its efforts being greatly compromised by illegal economic sanctions imposed by Britain and its associates. It was a grand start to the millennium for agriculture fanatics as they felt a new era of good fortune had dawned while resettled farmers treasured the idea of being land owners.
However, with agriculture no longer the diversified, vibrant and efficient sector that it once was, not many of the new farmers have enjoyed the success they hoped for.
Very few of them feel empowered as they are still heavily reliant on Government assistance and Presidential schemes for inputs year in year out despite having been in the business for some time now.
The situation has been blamed on the high cost of farming.
Farmers say the situation is compounded by the lack of funding for the sector as financial institutions are demanding immovable collateral before they release loans, a prerequisite which most farmers lack.
Those who manage to produce say the prices at which their products are bought; be it maize, tobacco, or soya beans, are very low. Despite the fact that agriculture is touted as the cornerstone of the Zimbabwean economy and the anchor of its revival, financiers continue to lack trust in the sector.
“The cost of farming in the country is extremely high as compared to other countries in the region and that is being a burden to us especially in these times of limited capital injection,” said Mr Wonder Chabikwa, the president of Zimbabwe Commercial Farmers’ Union (ZCFU).
He said the high cost of inputs, especially those produced locally, is making farming more difficult and unsustainable each year.
Research shows that it costs roughly $1 055 per hectare to produce dry land maize and over $1 500 per hectare for the irrigated crop.
Figures provided by ZCFU last year show that on labour per hectare, most farmers use $95 from planting to harvesting, while $47,43 is needed for a 25kg bag of seed that covers a hectare. Other costs include $384,24 for fertilizer, $38,58 for herbicides, $8,70 for insecticides, $31,50 for grain bags, $60,38 for transport, $7,32 for insurance, $7,98 on levies and $9,73 for sundry expenses. Indirect cost covering tractor operating were $193,79 for fuel, $72,02 for oils, $19,08 for filters and $7,08 for tyre punctures. When all the figures are added, the total — depending with the area – is between $982,82 and $1 055.
However, farmers say considering that yields in the country have not been even, with their levels still a bit low, it will be hard to produce a crop that gives them $1 500 based on current producer price of US$390. According to ZCFU, the overall maize yield per hectare last year was 0,85 tonnes per hectare (according to Agritex figures), which has a value of US$331,50 using the current producer price of US$390 per tonne. Seed producing companies, however, suggests otherwise.
Seed-Co, a renowned seed producer on the continent, says a farmer can have a maize yield between seven and 17 tonnes per hectare depending with the variety of seed if proper farming procedures are followed.
Therefore, using the minimum figure of seven tonnes maize yield per hectare and the $390 per tonne producer price offered by Government, a farmer can get $2 730 per hectare, a figure way more than the purported cost of $1 055 per hectare.
Even using the lowest producer price of $180, which usually prevails with private buyers, a farmer can still get profit as they will be getting $1 260 per hectare.
In South Africa and Zambia, it costs between R7 500 and R9 000 to produce a hectare of maize, which is about $750 and $900 when converted to United States dollars. Farmers say the high cost of locally produced inputs such as fertiliser, seeds, pesticides, and farming machinery is making farming expensive.
Local producers, however, say they incur a high cost of production hence the expensive outputs as they will be looking to recover cost. Local fertiliser manufacturers even complain that the influx of fertiliser imports is elbowing them out of business due to their cheap nature.
Manufacturers had been enjoying the ban on imported products but have endured hard times since the ban was lifted. Fertiliser manufacturers such as Zimphos, Sable Chemicals, Zimbabwe Fertilizer Company (ZFC) and Windmill are battling to remain competitive in the sector as it is slowly becoming dominated by cut-throat competition from cheaper imported fertiliser imports.
Local fertiliser producing giant, Chemplex, recently applied to Government for a 20 percent import tariff relief on raw materials to remain competitive and fight competition from imports.
“There are at least 15 fertiliser importing companies, importing from as far as India and China,” Chemplex CEO, Mr Samson Kachere, recently told local media.
“This has put a lot of pressure on local fertiliser manufacturing firms. The competition is unfair because given the Zimbabwean economy, local companies cannot compete with global fertiliser manufacturing giants,” he added.
Mr Chabikwa, however, said farmers now prefer imports to local products as they want to maximize on profits.
“Farmers will always consider cheap products for them to be able to have decent returns,” he said.
“One also wonders why local fertiliser should be more expensive than imported fertiliser, of which the latter has to go through transport, duty and other costs.”
A Zimbabwe Farmers’ Union official who declined to be named for professional reasons said there isn’t much difference between imported and local fertiliser prices.
“In fact imported fertiliser and other imports are not so cheap but they are subsidised by Government through various farm mechanization schemes.”
The official said fertilizer and other farming inputs in neighbouring countries are actually higher compared to some which are produced locally.
Lucia Mazanhi who owns a plot in Banket had hoped that she will get assistance from Government and the private sector when she acquired the piece of land.
She, however, had to mobilise about $4 500 on her own to fund drip irrigation on the plot. She says Government should put in place more protectionist policies in agriculture to prop up budding farmers.
“We want more protection and more subsidies, I have done my part raising money for irrigation and other developments but I think now private players and Government should assist with other inputs,” she said.
In Zambia and Malawi where Government gets most of its maize imports, farmers are well supported by their governments through subsidies.
