Biti’s statement on 2011-2012 Agricultural Inputs
LAUNCH OF THE 2011/12 GOVERNMENT FUNDED AGRICULTURAL INPUT SUPPORT
FACILITIES
Introduction
1. Honourable Ministers, the 2011/12 agriculture season has started in
earnest with farmers already preparing for the season following the recent
rains received throughout the country.
2. The agricultural sector remains one of the key sectors of the economy
together with communications and mining. To that extent it is therefore
critical for government to create conducive environment and policy framework
to maintain sustainability of the same.
3. In this regard the Government has since 2009 ensured meaningful financing
to agriculture together with the private sector and cooperating partners.
4. Between 2009 and 2011, the Inclusive Government together with
international partners and private financiers have committed a total of
US$1.9 billion into the agricultural sector. Budget support on its own has
totaled US$552 million.
Support to Agriculture (US$)
Source of Funding 2008/09 2009/10 2010/11
Government support 79,040,040 300,206,439 172,730,737
Presidential facility 30,000,000
Development partners 74,000,000 60,000,
Bank sector support 94,765,128 331,242,000 411,628,246
Lines of credit 162,746,635 150,379,749 14,500,000
Total 336,551,803 855,828,188 688,858,983
Total as % of Total Budget 37 40 25
Total as % of GDP 6 13 8
Support to Agriculture by Government, Development Partners & Private
Financiers; & Agricultural Growth Rates: 2008/09 Season – 2010/11 Season
5. Government finance alone has risen from US$79 million in 2009 to the
projected US$248.2 million in 2011.
6. The table below shows Government’s contribution to agriculture over the
past three years.
Item 2009 2010 2011 TOTAL
Grain Procurement 5,650,000 101,345,967 75,050,000 182,045,967
Input Support 60,000,000 87,400,000 45,000,000 192,400,000
Capitalisation of Agribank 17,000,000 2,500,000 19,500,000
Extension & Other Support Services 13,390,040 93,617,472 103,853,800
210,861,312
Irrigation Development 843,000 11,763,500 12,606,500
Total 79,040,040 300,206,439 238,167,300 617,413,779
2011/2012 Crop Input Support Facilities
7. Government has committed itself to mobilize and coordinate banks,
development partners, seed houses, farmers unions, fertilizer companies as
well as individual farmers to put in place the necessary financing
arrangements for the 2011/2012 Summer Cropping Season.
8. Therefore, Government has, in partnership with local input producers, so
far secured agriculture inputs worth US$75 million to be accessed by both A2
and Vulnerable farmers as highlighted below.
US$30 million Input Facility
9. The scheme targets farmers that have delivered grain to the Grain
Marketing Board and have not yet been paid for their deliveries. The farmers
will access inputs such as maize seed, fertilizers and lime against
outstanding amounts for grain deliveries.
10. The Ministry of Agriculture, Mechanisation and Irrigation Development
has already proceeded to sign contracts with individual producers of inputs
on 7 October 2011 and inputs are being delivered to GMB depots.
US$45 million Input Facility
11. The scheme which we are launching today (13 October 2011) will target
500 000 vulnerable farmers including 100 000 vulnerable households and will
be complemented by cooperating partners, whose support will be announced in
due course.
12. The scheme is structured as follows:
i. US$8.1 million Agriculture Input Support Facility for the Vulnerable –
This facility will support 100 000 vulnerable farmers with an input package
comprising 1x 10 kgs maize seed or 1x5kgs of sorghum, 1×50 kgs compound D
and 1 x 50 kgs Ammonium Nitrate.
The farmers will access the inputs from GMB depots for free through a
voucher system.
ii. US$20.3 million Communal Farmers Subsidised Agriculture Inputs Support
facility – This facility will support 250 000 communal farmers with an input
package similar to the one mentioned above.
The identified farmers will be given a voucher which will enable them to
access inputs at subsidised prices from GMB depots on cash basis.
iii. US$ 17 million A1, Small Scale Commercial and Old Resettlement Farmers
Subsidised Agriculture Inputs support facility – This facility will support
150 000 A1, Small Scale Commercial and Old Resettlement farmers with an
input package comprising 1x 25kgs maize seed, 1×50 kgs compound D and 2x 50
kgs of Ammonium Nitrate valued at US$17 million.
Access to inputs by this category of farmers will be through the same
mechanisms as outlined under the Communal Farmers Subsidised Agriculture
Inputs Support Facility.
Comprehensive Agriculture Strategy
13. Government finance alone does not deal with the problems of agriculture.
It is important to deal decisively with the problems which lead to
inefficient spending and wastages. As I indicated in my Mid Term Statetment,
there is need for a paradigm shift.
14. Identified areas of intervention include:
• Finalisation of the Fast Track Land Reform Programme and the Land Audit;
• Defining the judicial framework governing property rights and in
particular the restoration of the land market through a judiciary
enforceable title;
• Development of Human Capital, infrastructure, biological capital and
research including climate change;
• Strengthening use of technology including ICT;
• Establishing reliable and consistent private sector model of financing
agriculture;
• Establishment of open commodity exchange markets for agricultural outputs;
and
• Resolving the issues of compensation as defined in the GPA.
• Complementing the above will be measures aimed at enhancing farmers‟
productivity through improvements in mechanisation, high yield seed
varieties, use of fertilisers and chemicals, irrigation and provision of
extension services.
Pricing Policy
15. Consistent with the liberalisation measures instituted by Government
since 2009, the Strategic Grain Reserve should operate and be managed on a
revolving basis, to allow for renewal of old stocks and stabilization of
grain supplies and prices in the market.
16. However, the current pricing policy where the maize floor prices (US$285
per ton for 2011) remain above regional parity prices (US$220 per ton) is
resulting in grain stocks accumulating without any outflows, thereby putting
unnecessary pressure on the fiscus to finance procurement of grain and
storage costs.
Buyer of Last Resort
17. Now that the country has achieved the targeted threshold of 500 000 MT
of grain, it is necessary for us to institute policy measures and strategies
that guarantee our farmers access to markets for their produce in a
sustainable manner.
18. Sustainable marketing arrangements will need to be put in place to
ensure that GMB becomes the buyer of last resort unlike the current
situation where the parastatal is the buyer of first choice more so given
the competing demands on the fiscus.
19. The implementation of the Commodity Market Exchange will facilitate
farmers to access markets and credit in the absence of security of tenure.
20. Additionally, security of tenure for our farmers is critical to enable
investments in the agriculture as well as mobilization of funding from the
market, particularly the banking sector.
21. In this regard, provision of security of tenure through the issuance of
the 99-year leases becomes critical.
I THANK YOU