Price madness hits agric sector

Source: Price madness hits agric sector | Sunday Mail

The price increase madness obtaining throughout the country could reverse recent gains made in the agricultural sector, farmers have warned.

The warning comes at a time when the country has made remarkable strides towards regaining self-sufficiency in agricultural production since production fell sharply in 2002.

At 238 kilograms, tobacco output broke the all-time high record of 236 kilograms achieved in 2001.

On the other hand, maize deliveries to the Grain Marketing Board have already surpassed the 1,1 million tonne mark for the second year running.

Wheat, cotton and soya bean have also made impressive gains with production improving by over 50 percent.

Much of the success is owed to out-grower schemes backed by both the Government and the private sector.

The achievements earned farmers increased income, which enabled them to expand their operations.

However, these gains could be reversed due to the skyrocketing prices for inputs.

Farmers say this season, the cost of production in the agricultural sector could consequently rise by at least 30 percent.

This comes as a result of unrestricted parallel money market and speculation.

Farmers also lament that the development could wipe out their investments if they fail to recover their costs.

It is particularly the imported items that have gone higher as suppliers use foreign currency to import.

Suppliers have also taken advantage of the situation to speculate the prices of locally-manufactured goods, thereby pushing the prices higher.

Farmers have also lamented that the obtaining instability has disrupted strategic planning as most had already planned for the whole season.

A survey carried out by The Sunday Mail Society showed that most retailers, both informal and formal, had hiked the price for fertiliser with a 50 kilogramme bag of Ammonium Nitrate selling at between $55 and $65.

Compound D was not available in most retail outlets but was reported to be selling at $55 per 50kg bag.

These are significant increases from the 2016/17 season when fertiliser sold at $27 for the same quantities.

A 5kg bag of maize seed costs between $17 and $18,50, depending on the variety while a 10kg bag costs between $32,50 and $40 and a 25kg bag is selling for between $79 and $88.

Zimbabwe Commercial Farmers Union (ZCFU) president, Mr Wonder Chabikwa confirmed the developments.

“They (suppliers) would not admit it but the fact is that the prices have gone up. You go to the supplier and they tell you they don’t have the product but then you find it in a certain shop going for a very high price,” he said.

“As such, we see a rise in cost of production by between 30 and 40 percent and this could be bad news for farmers.

“This has impacted very negatively in terms of planning for the farmers because most had already completed their budgeting.”

Zimbabwe Farmers Union director, Mr Paul Zakariya weighed in, saying there has been an increase in the price of imported agricultural products.

“The situation is not as bad as it is with basic commodities but we are facing challenges, especially for imported items like chemicals. We are also anticipating a rise in tillage costs because the cost of equipment such as tractors has gone up by up to 100 percent.

“A 75 horsepower tractor, which not so long ago was going for a figure around $30 000, is now around $65 000.

“The price hikes are pushing the cost of production higher and this could reverse the gains registered in the last few years.

“We hope that the market will respond favourably, otherwise farmers will not be able to recover their costs.”

In 2016, it cost roughly $1 055 per hectare to produce dry land maize and over $1 500 per hectare for the irrigated crop.

Figures provided by ZCFU showed that on labour costs per hectare, most farmers used $95 from planting to harvesting, while $47,43 was needed for a 25kg bag of seed to cover a hectare.

Other costs included $384,24 for fertiliser, $38,58 for herbicides, $8,70 for insecticides, $31,50 for grain bags, $60,38 for transport, $7,32 for insurance, $7,98 on levies and $9,73 for sundry expenses.

Indirect costs related to operating a tractor were $193,79 for fuel, $72,02 for oils, $19,08 for filters and $7,08 for tyre punctures.

When all the figures are added, the total — depending with the area — was between $982,82 and $1 055 per hectare. However, most of the prices have since increased by 50 to 100 percent, with most of the items only available on the black market.

Given the current situation, farmers could incur costs of over $1500 to finance a hectare of maize.

However, with farmers struggling to achieve even yields, it may be difficult for them to produce a crop that gives them $1 500 per hectare basing on the current producer price of US$390.

According to official figures, the overall maize yield per hectare has, for the past couple of years, been averaging around 0,85 tonnes per hectare.

Using the current producer price, this has a value of US$331, 50.

In South Africa and Zambia, it costs between R7 500 and R9 000 to produce a hectare of maize, which is about $700 and $850 when converted to United States dollars.

Farmers say the high cost of inputs such as fertiliser, seeds, pesticides, and farming machinery is making farming expensive.

Most farmers said they are now relying on Command Agriculture to sustain their operations, while some communal farmers are banking on the Presidential Well-Wishers Inputs Scheme.