The Sunday Mail
Michael Tome and Panashe Chikonyora
Business Reporters
SOARING prices of agricultural inputs are likely to jeopardise the 2019/20 summer season, with inputs producers already signalling suppressed demand.
Prices of fertilisers and seeds (soya and maize) have gone beyond the reach of many, thus reducing the capacity of some commercial smallholder farmers, particularly those not supported by Government programmes.
Given the rising cost of production in the sector, the development has the potential of drawing back Government’s projections of a 5 percent growth next year.
This might be compounded by another drought, which is expected to affect many countries in the region.
Agriculture is Zimbabwe’s economic backbone, contributing about 16 percent of Gross Domestic Product (GDP).
Seed and fertiliser manufacturers acknowledged that when compared to individual farmers, the Government remains the major procurer of seed and fertiliser this year.
In an interview with The Sunday Mail Business, Zimbabwe Seed Traders’ Association (ZSTA) president Mr Amon Mwashaireni said the inflationary environment has decapitated the norm. Usually, inputs demand peaks during this time of the year.
“Due to the country’s inflationary environment, the prices of seeds and other farming inputs (fertilisers, crop chemicals, fuel, electricity and others) have increased, thereby making it almost impossible for most farmers to properly plan for the 2019/2020 agricultural season.
“However, ZSTA appreciates Government’s inputs programmes. In an environment where most farmers are now resorting to street products, Government is now one of the seed companies’ biggest buyers,” Mr Mwashaireni said.
Chemplex chief executive Mr Tapuwa Mashingaidze, concurred with Mr Mwashaireni saying the inflationary environment has eroded farmers’ incomes which are supposed to be channelled towards agricultural production, resulting in reduced uptake of fertilisers.
He lauded Government and some financial institutions for their active participation in the agricultural sector.
Mr Mashingaidze attributed the suppressed demand of agricultural inputs to a number of local industries’ performance. Most sectors recorded poor volumes uptake during the course of the year.
“The inflationary environment has been a challenging one for everybody. Due to the current cost of fertilisers, a lot of farmers are struggling to afford the volume of fertilisers they would want to apply on their land,” he said.
“The suppressed demand is reflecting in many areas of the economy. Most companies are recording reduced volumes uptake, coupled by weak disposable incomes among consumers and farmers alike.
“However, the good thing is that the Government continues to support agriculture through the Presidential Input Scheme and the Smart Agriculture Scheme. It is now being administered by several banks. That scheme has kicked off and it’s operating very well,” Mr Mashingaidze said.
With regards to the availability of ammonium nitrate, he said that the volumes were sufficient for this season.
“I don’t think there is a problem with the amount of fertiliser available. There is quite a lot of ammonium nitrate in stock. Much of it was carried over from last year because of the drought.
“We had estimated that requirements for this current summer crop alone would be 400 000 tonnes. However, the actual volume uptake will depend on how much funding will be made available to keep replenishing stocks,” he said.
In an interview with the Zimpapers Television Network (ZTN) last week, Zimbabwe Farmers’ Union president Mr Paul Zakaria lamented the high cost of inputs, saying the costs were deterrent to farmers not sponsored by Government.
“Surprisingly, prices of inputs have actually increased in US dollar terms. If we compare ourselves with countries elsewhere in the region, that makes our agriculture uncompetitive,” Mr Zakaria said.
In the 2020 Budget, Finance and Economic Development Minister Professor Mthuli Ncube projected that agriculture will grow by 5 percent next year, with the overall economy expected to expand by 3 percent.
The economy is projected to contract by 6,5 percent this year.
