TBs for Command Agriculture inputs

LISTED seed producer SeedCo Holdings (SeedCo) says government has paid for Command Agriculture inputs in Treasury Bills (TBs). 
Government, through the John Mangudya-led central bank has been issuing TBs to fund its programmes over the past few years as a stop-gap measure since it no longer has access to investment from international financial institutions due to its debt legacy.
Morgan Nzwere, SeedCo chief executive, last week told The Financial Gazette that his firm’s revenue for the financial year to December 2017 was buoyed by several government input schemes.
“…while at this moment I am unable to give you exactly how much the company received from government, they have paid all their dues using Treasury Bills and we anticipate having more business from them this year.
“They have actually been paying for everything upfront which has been a welcome change,” he said on the side-lines of the company’s Annual General Meeting in the capital.
Official data shows that this year, the programme requires close to $1,3 billion to take off as the country steps up efforts to raise local production and export earnings.
This comes amid several reports alleging government was defaulting to suppliers. Nzwere was, however, confident that the new administration would be true to its word.
“Looking at government paper, 80 percent of our holdings are expiring in the next two to three months. Our intention is to bring them down. We are holding them at 1:1 because that is what everyone in the market is doing. If you look at all the banks, you will see that they have actually made more money from TBs than anything else. The Interest we are getting from the treasury bills is actually more than what we will have gotten if we had invested the money in the money market,” he said.
Nzwere noted that going into the 2018/2019 agricultural season, his firm had already increased seed output to match demand as the market ran short last year on the back of Command Agriculture.
“In Zimbabwe winter cereal volumes during the first half stood at 5 635 metric tonnes, and were 10 percent lower than the 6 217 metric tonnes achieved in prior year largely owing to the slow dry down on the long season maize varieties planted under the Command Agriculture Program, which meant land available for winter planting was reduced.
“At the moment seed delivery is already at 35 percent as government has already stipulated its requirement for the coming season,” the Seed Co boss said.
This comes as government has also warned farmers who have defaulted on Command Agriculture debt that they will not be considered for future allocations. Working with Agritex officers to compile the list of defaulting farmers, government has also threatened to blacklist defaulters.
Buoyed by the command maize success last year, government has extended Command Agriculture to wheat, soya beans, and rice and livestock to cut the country’s trade deficit to sustainable levels.
According to statistics with the Lands, Agriculture and Rural Resettlement Ministry, command maize production has reportedly used $334 million this year, while command livestock, wildlife and fisheries are expected to use $300 million. Soyabean requires $200 million, wheat production requires $200 million, while horticulture requires $120 million and rice needs $100 million.
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