Natfoods ploughs US$5m into wheat production

Business Reporter
LISTED agro-industrial concern, National Foods (Natfoods), has ploughed US$5 million through Paperhole Investments (PHI) Commodities towards contract farming for the 2017 winter cropping season, as the private sector weighs in on Government’s plan to produce 325 000 metric tonnes of wheat this year.

If the planned output is realised, production will equal the record crop of 1990 and 2001. The target is however lower than annual national requirements of 400 000 tonnes. But PHI has already planted 3 200 hectares, while a further 800 hectares will be tended by month end. Twenty-two farmers have benefited from the scheme.

National Foods managing director Mr Michael Lashbrook told The Sunday Mail Business last week that the support to farmers will be interest-free. “National Foods has invested US$5 million to wheat contract farming under the Command Wheat production scheme.  “We have planned to plant 4 000 hectares and 80 percent of that area is already under the cereal crop,” he said.

“By all means, we should produce over 20 000 metric tonnes of wheat in order to cover all costs.  “Our company will provide support wherever possible with no interest rate to encourage and promote production of these commodities.”

Natfoods expects to get 20 000 metric tonnes from the contracted farmers. The company’s efforts are likely to complement similarly financed schemes that are being supported by private companies such as Northern Farming Company, Stay Well Company, Sakunda and CBZ Bank.

In particular, CBZ has budgeted US$10 million for the sector at relatively concessionary rates of between 10 percent and 12 percent. All the top-dressing and basal fertilisers, including 70 000 tonnes of lime, have been secured for winter wheat.

Experts say if Zimbabwe ups production to more than 200 000 tonnes, it will cut the annual import bill for the cereal by US$70 million.  Every year, the country averagely spends US$100 million on flour imports. Public-private partnerships have become successful models to finance agriculture.

Government buys wheat from farmers at US$500 per tonne, while private buyers offer between US$360 to US$380 per tonne. About US$1 500 is needed to produce one hectare of winter wheat in Zimbabwe, which is the best production season for the crop in Zimbabwe.

Government and the private players are expecting at least five tonnes per hectare.  Service providers Zimbabwe Electricity Supply Authority (Zesa) and Zimbabwe National Water Authority (Zinwa) have assured farmers of uninterrupted water and electricity supply this season. Last year, National Foods completed the acquisition of Breathaway Food Caterers, which produces the popular Iris biscuits and Zapnax, Wingz and Kurls snack brands.

The company has also bought a 40 percent stake in Pure Oils Industries, one of the country’s largest cooking oil producers.