23 OCTOBER 2009

 

EXECUTIVE NEWS

 

This has been yet another traumatic week for certain of our embattled farmers to endure and undoubtedly this traumatism and uncertainty has spilled down to a fair portion of our farming community. The new planting season is already upon us but the pressure against us seems to have been ratcheted up a few notches and some dairy farmers have become the new target.

 

Despite all the gloom and pressure exerted against us President Deon Theron urges us all not to lose hope. As your union continues to promise and reassure you there are many positive discussions continuing behind the scenes. Unfortunately a lot of this cannot be discussed openly on these means but those who were able to attend the recent meetings in Harare and beyond would have some idea of what we are talking about.

 

We need to take courage from President Deon Theron whose own mother was this week convicted in court under the Gazetted Land (Consequential Provisions) Act for farming on their own property. Yes, this has caused a huge problem as he had evacuated his herd to her farm when he was evicted by the courts off his Zanka Farm in 2008.

 

Despite all these traumatic events he and his family are very far from giving up. In fact these unsavoury events have given him a renewed stimulus to seek a resolution of the current problems facing our farmers and Zimbabweans as a whole.

 

All in all, this week (and last), we had another five farmers and a farm worker convicted under the controversial Gazetted Land (Consequential Provisions) Act.

 

What has become very apparent in most of these cases is that the direct orders that were allegedly given to the police, magistrates, prosecutors and Lands officials via the document titled Handling Land Cases has been used. It has been the opinion of many that this document is a direct assault against the independence of the judiciary and also the Constitution because of its alleged prejudgment of cases before they even come to the courts.

 

It is in direct contradiction of the ‘presumption of innocence’ and is responsible for much of the perception and impetus behind the current aggressive actions of the new beneficiaries who are attempting to illegally evict us from our homes and businesses without compensation.

 

So far we have had 12 farmers evicted by the courts, the first being in May 2008, and although all the victims have appealed none of their cases have ever been brought to court. Although, in theory, when an application for an appeal to be filed the sentence should in effect be put on hold. However, so far nobody has tested this (out of fear) as most of the sentences imposed included a mandatory 6 month jail term suspended for 5 years. 

 

What we do find interesting about the recent evictions is that 60% of those evicted were not current members of our union and had previously stated that they were afraid of rejoining in fear of the perceived victimisation of our members.

 

We also only received the information of their evictions via a third party, which is unfortunate because we cannot over stress the importance of sharing information of what is happening to our members both on their farms and in the courts. We need to be able to share all the positives and negatives to the benefit of all.

 

For the last three years your union has been striving to bring together all the previously splintered groups in organised agriculture, which is an extremely important component of our plans to move forward in a single direction and to achieve compensation as well as to get the industry back on its feet again.

 

To this end we are extremely encouraged by the large numbers of people who are coming forward to register their properties with the Valuation Consortium, where the total number has now increased to somewhere in the region of 3 600 properties on their books.

 

This is incredible and we continue to urge everyone to ensure that they and their friend’s properties are registered and credibly valued by this professional team who have already stood the scrutiny of the international courts in the Dutch case in Paris.

 

Their credibility is an extremely important factor in the achievement of our final goal and they have recently been visited by, and received approval from a number of people and groups who are or will be involved in the final resolution and implementation of the compensation/restitution package.

 

Everywhere in business practitioners seek business opportunities for their investments, which therefore makes the compensation package an obvious and open target to many in that particular line of business.

 

As individuals we are also obvious targets as our own lives have been turned completely upside down and our life’s investments destroyed so just the thought of getting maximum benefit from this exercise obviously excites us.

 

However, we need to be very aware of any possible exploitation and promises that may again divide our community through greed and which may also derail any gains we may have made in the direction in which we are currently heading. We must be very careful because the stakes are high and there is a lot of money which could be exploited.

 

Many of us fell victim early in the fast track land acquisition to an eloquently speaking young man who took our money and made pie in the sky promises of swift compensation, which he knew he could not keep. Let us not be led down that path again and let us all move forward together by using a credible organisation with a proven track record.

 

On the positive side, we have been approached by a commodity broker who is willing to finance farmers to grow essential foods. Please contact Crops Manager Richard Taylor or Vice President Charles Taffs for more information.

 

There is growing concern over the apparent exploitation of our surviving farmers in many areas for their now limited available finance to be overtaxed for use in areas where public amenities and services are failing. We are therefore seeking legal advice in the following areas:

 

a)    Water Rights. At the moment ZINWA is on a campaign to raise revenue and is levying substantial charges based on the old water rights regime. Those few farmers who remain on the land are facing a serious dilemma do they on the one hand pay the high possibly illegal charges in order to secure/acknowledge/accept the water rights or on the other hand do they refuse to pay and risk losing the water rights in question.

 

b)    ZESA: In this regard we need to also confirm the legal position with regard to ZESA as a number of farmers are facing similar exorbitant fees.

 

c)     Rural District Council Unit Taxes vary throughout the country and in some cases are extremely high. We need to establish whether these rates have in fact been correctly processed and gazetted before being levied. There is also the question of course as to who exactly owns the land which is being levied, the dilemma being whether actual payment constitutes de facto or recognised ownership of that piece of land.

 

We are constantly working on improving our CFU website www.cfuzim.org and have requested your advice on how we can make necessary improvements, without too much response. However, we have recently found that a hacker loaded links to undesirable pornographic material onto the chat site, which we hastily removed once detected.

 

Vice President Louis Fick is gathering information of South African investors in Zimbabwean agriculture and requests that anyone who has so far not registered through him to kindly do so.

There are still cases where beneficiaries are trying to unilaterally take over farm equipment. The following legal advice has been prepared by our legal advisor:

 

ACQUISITION OF FARM EQUIPMENT AND MATERIALS – LEGAL ADVICE

 

All members experiencing the acquisition of farm equipment and material are reminded again of the correct procedure that government ought to follow when endeavouring to acquire such equipment and material.

 

The following procedural steps are mandatory and must, in the terms of the High Court case of Kwezaan, be followed failing which the purported acquisition is invalid:

 

1. Only a duly authorised employee of Government may enter (holding a certificate indicating his authority) upon a farm to establish if there is any equipment or material “not currently being used for agricultural purposes”.

 

1. Before identifying any such equipment or material the employee must ask the owner or occupier of the farm whether he or she has any material or equipment not being used.

 

1. If the owner or occupier refuses to compile an inventory of such equipment or material only then is the employee entitled to compile such an inventory.

 

1. It is up to the owner or occupier to prove whether any equipment or material is being used. The fact that the equipment or material lies idle for some months of the year does not mean that such equipment or material is idle.

 

1. After identifying equipment the government is required to appoint a valuation officer to value the equipment and this officer must have a certificate confirming his or her authority.

 

1. Government must then give the farmer a written notice of not less than (7) seven days of its intention to acquire such equipment or material.

 

1. Government may then acquire such equipment by serving on the owner or holder an acquisition order which order must invite the owner or holder within 14 days to contest the acquisition and/or the compensation fixed there for.

 

1. Upon serving the order the ownership of the equipment or material vests in Government who can take possession of the equipment and material.

 

1. If the owner or holder of the farm equipment contests in writing the acquisition or compensation as invited to in the order then Government must in not less than 30 days after the acquisition order was served file a court application in the Administrative Court to confirm its entitlement to acquire such equipment and material and to pay the level of compensation so assessed.

 

1. The owner or occupier is entitled within no more than10 business days to oppose the application.

 

1. Government is obliged to pay 25% of the compensation offered within 30 days of the order of acquisition served and the balance within5 years after the acquisition of farm equipment and within 5 years after the acquisition of farm material.

 

1. No owner or holder may sell or otherwise dispose of any equipment acquired.

 

1. Government rarely conducts the correct procedure and very often confuses the order of the procedure. So many defences arise in the course of any acquisition including attacks that can be made on matters such as valuation and compensation.

 

1. There is also a constitutional argument that can be raised to the effect that in terms of the legislation the farmer is not offered an opportunity to make representations prior to the filing of the acquisition order.

 

1. We strongly recommend that upon receipt of an acquisition order you consult your lawyer to fully articulate your defences.

 

We trust the above may assist. Should you have any queries please do not hesitate to contact either Mike Clark or Marc Carrie-Wilson at CFU.

 

Once again we remind farmers that our door is always open for those who wish to seek advice or just come in for a chat.

 

Remember – if we stick together with God’s help we will overcome all evil. We continue to pray for all those who are currently facing problems and are in distress.

 

 

COMMODITY UPDATE

 

NATIONAL ASSOCIATION OF DAIRY FARMERS (from the desk of Rob Van Vuuren)

 

The EU Stabex ‘95 Marketing Programme is looking for dairy heifers and young cows to buy for the seven small scale dairy projects in the programme i.e. Rusitu, Umzingwane, Tsonzo, Gokwe, Guruve, Marirangwe and Sangano.

 

If you have reasonably priced, hardy stock for sale, including dairy crosses please contact Sue Bell at [email protected] with details of animals on offer and prices required. If you are either in the vicinity of one of the dairies or could transport the animals to the dairies this would be a benefit.

 

ESSENTIAL VACCINE PROGRAMME UPDATE

 

Ø  The vaccination schedule for the seven small-scale dairy projects has now been completed, except for the Umzingwane area, where, due to communication problems, just over half of the cattle identified for mass vaccination were done.

Ø  The Union Project Trust Office now has a date stamp and distribution of vaccines will commence.

Ø  Rift Valley Fever (Cattle) and Vibrio Leptoform 5 vaccines are currently not available until the next order of vaccines arrives in Harare

Ø  We have reliably been informed that there is currently a shortage of day-old-chicks and consequently the two poultry vaccines will only be available early in the New Year.  In addition the quantities available are minute compared to national requirement and distribution will therefore have to be discussed.

 

Now that a reasonable number of livestock producers have applied for vaccines under the STABEX ’95 Essential Vaccine Programme, it is possible to monitor trends.  These trends are at variance with vaccinating trends during the recent past.  The vaccine requirements schedule for the programme was based on these trends.

 

We believe the variance is due to two factors, namely:

1.   Vaccines have been in short supply or not available.

2.   The subsidized price for 2009 has encouraged livestock producers to introduce vaccination programmes again.

 

Livestock producers who intend applying for vaccines are reminded to please state accurate livestock data and vaccine requirements applied for must be for the 2009 season only.  Any producer who has or will benefit from this programme may well be audited by E.U. monitors.

 

CATTLE PRODUCERS ASSOCIATION

 

CATTLE PRICES

 

For the full CFU Calling with graphs please kindly email [email protected] and request it.

 

ZIMBABWE CROP PRODUCERS ASSOCIATION (from the desk of Richard Taylor)

 

Fertiliser Options

2009-2010 Fertiliser Prices (per tonne)

 

Nutrichem:      Maize Blend       US$ 440

                        AN                    US$ 510 (subject to availability)

 

Omnia:            Maize Blend       US$ 515 (7:14:7)

                        Grain Blend       US$ 535 (8:16:7)

                        LAN                  US$ 430 (28%)

 

ZFC:                 Comp D             US$ 470 – 480

                        AN                    US$ 540 (subject to availability)

 

Windmill:         Comp D             US$ 490

                        AN                    US$ 488 (available 3^rd Week Nov)

                        CAN                  US$ 440 (28%)

 

With the Stabex fertiliser now fully subscribed and utilized, there are still a lot of farmers requiring fertilizer.

 

With the planting season on top of us, and the need to get fertiliser in as soon as possible, we cannot wait to see if we are authorized further Stabex fertiliser. In light of this, I have visited the main fertiliser companies enquiring if a bulk order could be placed for those still requiring fertiliser. I have managed to negotiate the above prices, however, these may still be adjusted downwards should we have a good response and large volumes are required.

 

Schedule giving the differences between the companies:

 

For the full CFU Calling with graphs please kindly email [email protected] and request it.

 

As one can see, Nutrichem is the cheapest, however, I again stress we need support and volume. Please would you get back to me with your comments and requirements should you be interested so as to help me expedite your needs for fertilisers at the cheapest possible price.

 

Finance

 

Where does one start!

 

All the banks I have visited in the past week or so have existing clients, but are interested in new ones joining. When one brings up the subject of agriculture, they are very understanding, but tenure is the problem. Therefore, security of some sort against borrowed money, for the likes of us, is the only way in which we can secure finance.

 

Security requested comes in various forms. Your house (should you own one), your share certificates (to the value of your borrowings), other fixed assets that you may own locally or externally, or some brave chap (or institution) who is prepared to stand guarantor for you.

 

Interest Rates vary from bank to bank according to which scheme they are involved in.

 

ZB Bank has made a deal with ZFC for fertilisers (Compounds only). The farmer pays 30% of the value on order to ZFC. ZB will then guarantee payment over a 180-day period for the remaining 70%. Their interest rate is 9%. Should you then require a roll-over facility, you will be charged a flat rate of 8% on the outstanding value, and 6% per annum of the new value.

 

ZB Bank will finance those on this scheme for their seasonal requirements. The interest on this value will be a 5% flat rate and 7% per annum. This is subject to some form of security from you, should ZB Bank be unable to secure financing through the “private sector” for this scheme. (The “private sector” being those we pay already, as in insurance companies, pension companies etc. See if they can give something back for a change!!)

 

BancABC is trying to source some of the GMB inputs scheme (fertilisers only, including AN) Here is one for the books. 18% interest on unsecured loans over a 270-day period! Should you still require a roll-over facility for this at the end of the 270 days, the interest on the loan will increase to 36%!! You would need to be one hell of a productive farmer to cover this! If you give them security, then the interest rate would drop to around 10%. This does include seasonal finance.

 

The Agribank-GMB inputs scheme… Agribank are trying to source funds through the Ministry of Finance for seasonal loans. They are keen for new clients however old clients who have left recently will have to get to the back of the queue. The interest on loans, should they get the funding, will be around 9% per annum for those who join them and you will have to put up your house or some other form of security for this privilege.

 

CBZ has the GMB scheme. This is a 270-day facility effective from the 1 October 2009, so if you choose this scheme, your days are up at the end of June regardless. Interest rate for this is a flat 4% rate, and 8% per annum; there is no roll-over facility.

 

Seasonal funding is for 180 days only. Strange, when you view the inputs scheme as a 270-day facility???? Loans are again tight – so only 30% of your seasonal requirements will be effective initially, and the rest will follow, as and when funds become available. Interest on this will be a flat 4% rate and 8% per annum, with no roll-over facility. Hopefully, you will have some drying capacity to help you get your product onto the market early!

 

Standard Chartered Bank have made a deal with USAID. They have around US$4 million for seasonal finance available. Standard Bank has remained constant in their business dealings and their tough requirements towards farmers have not changed; you will have to meet their criteria should you wish to access their money. The interest rate for this facility is 12% per annum along with your house or some other form of security. However, Standard Bank is looking at medium term loans as of next year.

 

I have not visited NMB Bank yet, but have heard that they have a similar deal on fertilisers with Omnia as ZB with ZFC. Interest rates will not be too different and they will also want your house, kitchen sink and everything else!

 

When one looks through all this, comparing Standard Bank at 12%, and including their establishment and management fees etc with the other banks with their flat rates, then the compounded interest per annum, is all much of a muchness.

 

If we now look at our cash flows and take the profit margin on a 10% compounded scenario, you will need to produce a 7 t/ha dryland maize crop or a 3 t/ha dryland soya crop to make a profit! Add a further 2% compound interest (i.e. Standard Bank) – and you will need a magic season!

 

I was sitting here in my office drafting this yesterday afternoon, feeling rather despondent and wondering how farmers reading this would feel, and what else out there will help. I debated with myself whether to delete the finance portion and just leave the fertiliser section for your comments, when into my office walked an ex-Middle Sabi farmer, who now works for company X in town. Maybe this is that brave institution I mentioned earlier…..

 

This company wants to finance maize inputs in partnership with farmers. They have an agronomy section, so soil sampling is a requirement. Liming etc is a ‘must’ and the participating farmer must agree to farm visits. A bit late for this season, but I’m sure we can overcome some of this.

 

Basically, they are willing to supply all chemicals required for the maize crop – but this can be adjusted according to the agreement between the parties. The farmer will still have to source his own running expenses, and will have to sell the contracted maize to this company. Two options of payment have been discussed. Option 1: your crop would be sold at the prevailing SAFEX price plus US$70 (i.e. this would be US$268/tonne at today’s price). Option 2: the maize would be sold at an average price prevailing in local market, as quoted by the top three traders. The company would fix a yield target which will vary depending on whether the crop had been irrigated, or not. For example, if the yield was set at 7.5 t/ha before harvest, the profit accrued would be split 60:40 in the company’s favour after sale. Anything over this target goes into the farmer’s pocket, but a yield below this would be to the benefit of the company on a sliding scale.

 

We are still negotiating some of the aspects of the contract with this company e.g. the possible supply of fuel – and still need to work out some of the finer details before publicizing the contract. This contract with company X could work well with bulk fertiliser orders, and I’m sure we could negotiate a similar scheme with chemical inputs.

 

Please get back to me with your comments, or should you like more details on these issues. We need to move quickly as planting time is upon us.

Contact details are: CFU direct line 309862, CFU Switchboard lines 309806-19 and email [email protected] or [email protected]

 

 

Trading Prices

 

Local as at 23 October 2009 (US$)

 

For the full CFU Calling with graphs please kindly email [email protected] and request it.

 

South African Foreign Exchange (SAFEX) as at 23 October 2009

 

For the full CFU Calling with graphs please kindly email [email protected] and request it.

 

International Gulf

 

For the full CFU Calling with graphs please kindly email [email protected] and request it.

 

Source: South African Grain Information Service (SAGIS)

 

 

ACE Trade Report for 23 October 2009

 

Wholesale prices in selected countries in East Africa are supplied by (RATIN) the Regional Agricultural Trade Intelligence Network. Current prices are indicated below and are valid as at 22 October 2009.

(N.B. Changes shown are calculated on the basis of today’s prices against those previously recorded, which may not necessarily be the previous days).

 

For the full CFU Calling with graphs please kindly email [email protected] and request it.

 

Excerpts from the ZAMACE price report for 22 October 2009.

 

For the full CFU Calling with graphs please kindly email [email protected] and request it.

 

The following prices are also made available to us courtesy of SAFEX.

 

For the full CFU Calling with graphs please kindly email [email protected] and request it.

Exchange Rates

MWK 19. 51 = 1 ZAR     Down

MWK 143.97 = 1 US$  Up

ZAR 7.38 = I US$                      Up

 

COMMENTS AND VIEWS

 

Please let us know your comments and views on items contained within this issue or any other issues of CFU Calling by sending an email to us on [email protected]Disclaimer: This email and files transmitted with it contain confidential and privileged information and are intended solely for the use of the individual or entity to which they are addressed. If you have received this email in error please — do not read, disseminate, distribute, copy or take action in reliance on this email and- delete it immediately and arrange for the deletion thereof on your server, and- notify the administrator immediately. Any unauthorised, use duplication or interception of this e-mail or any files transmitted with it is expressly and strictly prohibited. No representation, guarantee or undertaking (expressed or implied) is made or given- As to the confidentiality or security of the e-mail system’ or as to the accuracy of the information in this email and any files transmitted with it is virus-free. No responsibility or liability is accepted for: the proper, complete transmission of the information contained in this email or any files transmitted with it or any delay in its receipt; or rising from or as a result of the use of or reliance on the content of this email or any files transmitted with it. Any views expressed in this email or any files transmitted with it are not necessarily the views of the Commercial Farmers’ Union. Queries regarding this email or any files transmitted with it should be directed to [email protected]. This disclaimer forms part of the content of this e-mail for purposes of section 11 of the Electronic Communications and Transactions Act 2002 (Act No. 25 of 2002).