The Sunday Mail
Word from the market
The Zimbabwe agricultural sector has been on a growth trajectory buoyed by an increase in output in traditional crops such as tobacco, maize, soya and wheat. Last season’s success has resulted in the agricultural sector posting an overall growth of 36,2 percent.
While the Government remains the lead funder of agriculture in Zimbabwe through the Climate Proofed Presidential Inputs Scheme (Pfumvudza/Intwasa) and the National Enhanced Agriculture Productivity Scheme (Command), the private sector has a greater role to play in filling financing gaps in crop production.
There is no doubt that the private sector has played a significant role in reviving levels of production in Zimbabwe.
It is against this background that we formed the Food Crop Contractors Association in 2020 primarily to improve private sector representation at the Government level, especially in discussions around agriculture.
The Association is a voluntary representative body of private-sector contractors in crop production in particular maize, wheat, and soya bean. Currently, we are working to ensure we increase membership through providing a compelling proposition to private contractors who are interested in joining us.
The other reason we came together was to promote contracting farming which the government has been advocating for in recent years. Most importantly, as contractors, we now have a common voice, and this has greatly improved our lobbying capacity
Since 2020, private sector funding through the FCCA has been on the rise. For example, in the last winter wheat season, private sector contractors produced 64 percent of wheat produced.
This year, we are hoping to plant 23 000 hectares of wheat, a significant increase from last year when we planted 15,500. So, the reality is that private sector funding is complementing the Government’s efforts to ensure food, nutrition, and fibre security for the country. We are also targeting to increase the area under maize and soya production.
As an association, we are also excited by Government efforts to create an enabling environment for private sector financing to thrive.
The FCCA hails some of the planned efforts around removal of 10 percent withholding tax on soyabean, duty-free importation of basal fertiliser, the horticulture revolving fund and stop order system for soya and other oil seeds.
However, there is still a considerable number of challenges slowing down private sector participation.
These include constrained access to cost-effective capital, current conventional banking structures like single client lending limits, lack of access to credit insurance which limits or slows the on-boarding process of expanding farmer portfolios, as its primarily now about relationship financing.
In addition access to the RBZ auction for significant quantities of inputs is limited, especially in the current season where international fertiliser prices have gone up by nearly 50 percent.
This has meant costs per hectare are much higher thus reducing farmers profit margins.
Our representation at the Government level has already started bearing fruit. We are active participants in several committee meetings that are co-ordinated every week by the Ministry of Agriculture. I am happy to report that we now have credibility, and our submissions are being taken into consideration for policy formulation.
Currently, our members are on a drive to improve their contracting capacity to complement Government commendable efforts towards increasing agricultural productivity.
Going forward, we see ourselves as private sector contractors being the vehicle by which industry essentially makes an investment and a commitment to the production of the raw materials.
Graeme Murdoch is the chairman for Food Crop Contractors Association Zimbabwe. Word from the market is a weekly column produced by the Agricultural Marketing Authority. Feedback [email protected] or [email protected]