Post-mortem of winter wheat season
http://www.theindependent.co.zw/
Friday, 22 June 2012 09:04
Peter Gambara
THE winter wheat planting period in now over and indications are that only 4
000 hectares of the crop were actually planted countrywide this year. This
is against a target of 50 000 hectares that had been set by government.
Wheat takes 140 days to maturity and a crop planted second week of June will
only be ready for harvesting end of October, or beginning of November. It
will help us as a country to look back on what went wrong so that we can
plan better for tomorrow.
Although wheat can be produced in summer, wheat production in Zimbabwe is
done in winter starting in May of each year. This means farmers need to
irrigate the crop as our winter is dry. Winter wheat production in Zimbabwe
has generally been on the decline over the past 10 years.
Over the last decade, local producers have managed to produce up to 26 0000
metric tonnes from about 65 000 hectares, with the balance being imported.
However, over the past three seasons production has gone down to around 12
000 hectares, yielding about 50 000 metric tonnes. In 2010, while government
set aside US$26,6 million targeting 45 000 hectares, only 12 000 hectares
were actually planted.
In his 2011 and 2012 budget statements, the Minister of Finance Tendai Biti
did not set aside any funds for winter wheat production. However, after some
pressure from interested groups, government has tended to provide some
inputs as the season approaches. This year the Minister of Agriculture,
Mechanisation and Irrigation Development Joseph Made and Biti jointly
announced the availability of inputs from the Grain Marketing Board (GMB) a
few weeks before the onset of the winter wheat planting period.
However, the logistics were poor hence the uptake of these inputs for wheat
production was insignificant and the total area planted to wheat this year
is estimated at only 4 000 hectares. Why is this so?
The challenges facing winter wheat production in this country centre around
the loss of interest from growers that emanates from a host of challenges
that producers continue to face. These include unreliable electricity
supply, high electricity charges, lack of a firm market for the crop,
shortage of finance on the local market and expensive water charges.
The loss of interest from farmers to grow wheat is mainly emanating from
electricity availability problems. Every year towards the start of the
winter season, Zimbabwe Electricity Transmission and Distribution Company
(ZETDC) has always been quick to reassure farmers that it will reserve a
certain amount of the electricity for winter wheat production, but half way
through the season, farmers realise those were empty promises as
load-shedding becomes too excessive to produce a reasonable crop.
By its nature winter wheat production relies on irrigation that is driven by
power. After planting the crop in May, one expects to harvest around end of
October, making the whole venture a six-month undertaking. It is not
sustainable to use diesel-powered generators to irrigate the crop for that
long and generators have generally been used to supplement availability of
power during critical stages of wheat production, however generators cannot
substitute ZETDC electricity.
Some farmers have experienced situations where electricity availability has
deteriorated midway through the season and they have had to abandon sections
of their wheat to concentrate on a smaller portion that they could irrigate
during the few hours that they received electricity supply. In such
situations, farmers make huge losses and this has contributed to some vowing
they will never grow wheat again until the electricity situation has
improved.
This past season (2011), a lot of farmers found themselves with huge Zesa
bills that make it completely unviable to grow wheat. Made recently
estimated the cost of electricity at US$700 per hectare. If a farmer were to
grow just 20 hectares, that means he/she incurs a bill of US$14 000. After
settling these bills, most farmers would actually end up in the red. There
is definitely a need to relook at the cost of electricity on the farms,
otherwise after last year’s experience a lot of farmers would rather not
venture into wheat production this year. A lot of farmers are therefore
looking at alternative winter crops like potatoes, cabbages etc.
The marketing of last year’s wheat crop presented a lot of challenges as
most farmers were stuck with their wheat with no real market to talk about.
Biti announced that he would not provide funding to purchase wheat as he
felt that millers, who directly need the wheat, should purchase the crop.
Those who delivered to GMB therefore did not get any payment.
Most members of the Grain Millers Association of Zimbabwe (GMAZ) preferred
to import wheat claiming it was cheaper to do so. Some said their silos
were full. Others said they could only pay for the wheat three months after
delivery. Some farmers have still not received their payments up to now. The
lesson here is let us as a country mobilise the finances to purchase a crop
on time and not leave it until the last minute. Failure to pay for delivered
crops demotivates farmers to grow the crop the next season as, was the case
with maize and now wheat.
The issue of the producer price is another contentious issue. Normally
government, either through GMB or the Ministry of Agriculture, would
announce a producer price at the start of the marketing season for winter
wheat, that is September1. However, last year this was not done.
It is important to mention here that the producer price is announced after
consulting producers through their farmers unions or associations as well as
some research as to the prevailing input prices at the time the crop was
planted. It is not a fixed price, as producers are expected to use it as a
guide in their negotiations with millers.
In the absence of a producer price, there is a tendency by millers/buyers to
offer a very low price coupled with cash on the spot incentive.
The availability of finance on the local market is another challenge that
has contributed to the decline in interest from farmers. It costs about
US$1200 to produce a hectare of wheat and the average yield is about 4
tonnes per hectare at US$475 per tonne, thus the profit from wheat farming
is therefore very small. Most banks say they advanced loans to wheat growers
last year and due to the chaos that characterised the marketing of the crop,
they could not fully recover the loans and have therefore stopped lending to
wheat producers. After all it is a very low profit crop that has the added
danger of not getting adequate water due to electricity load-shedding.
Farmers have become their worst enemies by not paying back loans to banks or
input suppliers like fertiliser companies. The habit of farmers not paying
back loans is spreading like cancer among the farmers. It is not a secret
that there is very little money available to banks to lend to all the
productive sectors of the economy and if farmers get into the habit of not
paying back, banks have a good reason to ignore the farming sector and
concentrate on less risky sectors.
The confusion that characterised the government winter wheat input scheme
this year left farmers with no real alternative source of finance to grow
the crop. Farmers were told to approach CBZ Bank to apply for the inputs and
get vouchers that were redeemable at GMB and yet for quite a long period,
CBZ staff professed ignorance about the input scheme. CBZ also demanded that
all those who wanted to access the inputs had to open bank accounts with
them.One wonders whether this is essential; why should all wheat farmers
bank with CBZ so that they can access a government input scheme?
If it’s a government scheme, why not provide the money through the Reserve
Bank of Zimbabwe, it only makes sense for it to manage commercial banks
rather than have one commercial bank managing other banks. The lesson here
is if government wants to support winter wheat production, it should first
of all put it on the budget. It should then bring all the stakeholders
together early, say February, to agree on the logistics. The tendency by
ministries to plan and implement schemes without consulting the stakeholders
should be avoided.
Government had problems convincing the fertiliser manufacturing companies to
deliver fertiliser to GMB depots as they claimed they were owed money for
previous deliveries. There has been trading of accusations between the
Ministry of Finance and the Ministry of Agriculture over the delay in
providing funds for the winter wheat and to pay farmers for crops delivered.
This impasse over the delay in paying farmers who delivered maize to GMB
last year actually contributed to the decline in the area planted to
commercial maize this year, as farmers lost confidence in GMB’s ability to
pay for delivered maize.
While government could not pay farmers on time for maize and wheat
delivered, the same government, through the Minister of Energy Elton
Mangoma, has directed ZETDC to disconnect farmers who have not settled their
electricity bills. This just shows poor coordination in government. If those
bills were incurred irrigating wheat that has not been paid for, where does
government expect these farmers to find the money to pay their electricity
bills?
Whereas wheat farmers face a finance crisis, the situation is different for
barley growers contracted by Delta. The farmers get their inputs on time and
they are paid for deliveries on time, but most importantly, they can be
relied upon to grow and deliver. Besides those who grew wheat and failed to
meet their loan obligations, there are quite a number of farmers who get
government subsidised inputs every year, but never plant a single hectare of
wheat.
Others reduce the area they would have promised to plant so that they divert
some of the inputs towards their summer crops. There is need for government
to separate real wheat farmers from pretenders.
The cost of water is another factor but not very big challenge facing winter
wheat growers. Users of water are required by law to obtain permission and
pay for it by Zinwa. However, over the years the farmers have said Zinwa’s
charges are too exorbitant to the extent of being more expensive than
fertilisers.
Wheat farmers in this country continue to face a lot of challenges that have
discouraged them from growing the crop. Maybe there is need for an indaba
where all players take part and iron out these differences and challenges.
Without addressing these challenges and trying to make wheat an attractive
crop to grow, the hectarage under wheat in this country will continue to
drop year after year.
Gambara is an agricultural economist and consultant with AgriExpert, a
consultancy firm. He writes in his personal capacity.Email:
[email protected]