US$90 per tonne incentive for grain delivery

Farmers who deliver maize and traditional grains to the Grain Marketing Board before the end of next month, will now get an extra US$90 a tonne over and above the $75 000 a tonne producer prices set recently for all four summer grains, with the same US$90 a tonne incentive given for deliveries of the pricier sunflower and soya beans.

The Cabinet agreed to the extra incentive bonus yesterday, which will be backdated to the beginning of April when the marketing season opened so farmers who have already delivered will the getting the extra. The bonus is an incentive for farmers to push their harvesting, drying and delivery timelines. Government yesterday described the package and pricing as the most competitive in the region.

The announcement was made after yesterday’s Cabinet meeting by Information Communication and Technology, Postal and Courier Services Minister Dr Jenfan Muswere who was standing in for Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa. The measures to reward the most efficient farmers were tabled before Cabinet by Lands, Agriculture, Fisheries, Water and Rural Development Minister Anxious Masuka.

Zimbabwe started the new marketing season with large carryover stocks from last season. On April 1 when the GMB was ready to take deliveries from the new harvest there were stocks of 453 717 tonnes carried over from the previous season as a strategic grain reserve. Cabinet also approved a review of the price of maize to ensure farmers’ viability. Dr Muswere said Cabinet resolved that cotton will now be treated as an export crop, just like tobacco, with prices being determined by fair pricing based on international lint prices. “This should motivate growers to produce more in the coming seasons,” he said.

He also gave a status report on wheat and tobacco and tobacco sales so far. Commenting on the producer price structure, Dr Masuka said the $75 000 a tonne paid for maize, sorghum, millet and rapoko, coupled with the US$90 incentive adds up to the equivalent of US$350, a figure he said was competitive. “If you look at the import parity price for maize and if you look at this price framework, this is a very lucrative arrangement for farmers. It is giving them the equivalent of US$350 which is comparable if not better than anywhere else in the region. Farmers should take advantage of this generous offer from Government,” said Dr Masuka.

Soya farmers are paid $171 495 a tonne and sunflower farmers $205 794,52 a tonne according to the GMB website and they will now be getting the extra US$90 a tonne if they deliver early. Fertiliser will now be sold in foreign currency in an open market since some components are imported but those accessing it using the Government schemes, the majority, would pay in local currency. Reacting to the incentive, one farmer organisations, the Zimbabwe Women Farmers Trust, has welcomed the incentive, saying it will encourage them to deliver their crops early. #

Zimbabwe Women Farmers Trust president Mrs Depinah Nkomo told The Herald last night that the “incentive is welcome”. “I think it is a good way of promoting the early delivery of maize to the GMB. We commend the Government for this but we recommend that this incentive should be offered every year from now, so that farmers know that when they deliver their crops early, they will get an incentive,” said Mrs Nkomo. Meanwhile, commenting on why the Government was not fully dollarizing, Finance and Economic Development Minister, Professor Mthuli Ncube said there were a number of challenges, some very serious, that would arise if this was done including the destruction of the banking sector and local industry will no longer be competitive and will be cut back sharply.

The last time Zimbabwe went for dollarization many factories closed or cut back on production and staff as imports took over. “This is what will happen on day one if you adopt the United States dollar as the only currency, something nasty is going to happen. “Four things as a minimum will happen. You will wipe out the entire banking sector. Because you need to convert their Zimbabwe dollar balances into US dollars, banks will have negative balances. You will have a crisis; you will have no banking sector. “Secondly, very quickly you will have a cash crisis because you cannot print US dollars and there will be a divisibility problem; the small denomination notes will be in short supply and you will start to have cash queues in the banking sector,” said Prof Ncube.

“The advantage of having a domestic currency circulating with US dollar is we will have to manage the cash crisis. We have been through this before. If you remember we had to create something called the bond notes but that was before I arrived, in order to deal with some of the cash crisis,” he said. He said the economy, particularly the manufacturing sector will lose its competitiveness if the domestic currency is done away with. “Also you will do away with the monetary policy. You need both fiscal and monetary policy or you will be walking with one leg. So something nasty will happen if you just use the United States dollar,” said Prof Ncube. On constant fuel price increases, Prof Ncube said the situation would be worse if the country was not blending with ethanol.

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