THE month of October signals the start of the rainy season and most people shift their minds to how the country and as individuals they are prepared for the challenges brought about by a new agricultural season.  The government recently announced the setting aside of US$253 million for the Presidential Inputs Scheme that will cater for small scale farmers in the communal, old resettlement and A1 resettlement schemes.

This is an increase of 58 percent from the US$160 million that set aside for the same exercise last year. This year in addition to sponsoring maize and small grains, government has also included cotton inputs and has also increased the level of fertiliser allocated per household from 100kg each of basal and top dressing fertiliser to 150kg of each of the fertilisers. Each household will also receive 10kg seed and 150kg of agricultural lime.

The scheme will still benefit in excess of 1,6 million small scale farmers. This exercise is being done in order to achieve food self sufficiency at household and country level in our country. Food self sufficiency at household level is defined as the ability of a household to secure either from production or from purchase, adequate food for meeting the dietary needs of all members of the household during one calendar year without having to beg for food from well wishers. It is acceptable for a household to use the proceeds it gets from growing another non food crop to buy food.

In this regard it will be acceptable for cotton farmers to grow cotton because that is the crop most suited to their region, sell it and then use the proceeds to buy food. This is the reason why government this year found it necessary to sponsor the growing of cotton by small scale farmers along with the sponsoring of the growing of maize and small grains. However traditionally a household that fails to produce enough grain in a grain producing area is regarded negatively in our African culture even if the reason is to do with their failure to buy sufficient inputs. With the Presidential Input Scheme households will not have the excuse of failing to buy fertilisers and seed.

At national level, food self sufficiency is also defined as the ability of a government to feed its people. Whilst a government can still import food to feed its people in a drought year, a Government that continuously imports food from its neighbours is also regarded negatively by its neighbours as being unorganised or failing to put the right policies in place to encourage food production locally. In our case in Zimbabwe, some of our enemies will capitalise on that to try and discredit the land reform programme. In order not to give our distracters that chance, we owe it to ourselves to make sure we have sufficient maize and small grains to feed our people year in, year out.

Whilst the distribution of Presidential Scheme Inputs was largely responsible for the production of over 1,4 million tonnes of maize last year, the occurrence of droughts can lead to us getting a lower yield in some years. In this regard it is essential to have a strategic grain reserve (SGR), where government buys maize in good years and stocks it in silos in preparation of such drought years.

In our case government maintains its SGR with the Grain Marketing Board (GMB) and the set target is for 500 000 metric tonnes. However it is not possible to buy this amount of grain in a single year and the highest amount that GMB has purchased in a single year over the past five years is 249 792 metric tonnes in the 2010/11 season. It is therefore the duty of Government through Treasury to buy the maize for the SGR as well as provide the necessary funds to maintain the silos. Recently government borrowed some US$51 million from China for this purpose.

Whereas government has provided funds to GMB to purchase maize for the SGR, the funds have been erratic with the result that farmers have had to wait for long periods to get their money and in some cases they fail to get the money before the onset of the next farming season and yet some would want to use the money to buy inputs. Desperate farmers have therefore ended up selling their maize to middlemen who offer cash on the spot, but in most cases lower prices.

This exercise has lead government to consider introducing a floor price whereby it announces a floor price at the start of every marketing season. This year there was heated debate after Government, in addition to announcing the floor price, also gazetted a Statutory Instrument (SI) that prohibited any buyer from buying maize below the floor price. Whilst the intention was good, those responsible failed to explain this SI properly.

It does not make sense for a buyer to buy maize at US$390 in say Karoi and then transport it to Harare, when another farmer can deliver to a depot in Harare at the same price. Essentially the transport cost to move the maize from wherever the maize was being bought to Harare should be factored into the maize producer pricing structure.

The concept of a minimum producer price or floor price is also a highly debatable one. GMB has always been regarded as the buyer of last resort, in other words, if a farmer is not happy with all the other buyers, he/she can still sell his/her maize to GMB and get the floor price. However early this year the Agriculture, Mechanisation and Irrigation Development deputy Minister Davis Marapira had to announce that GMB did not have the necessary funding and urged farmers to seek markets elsewhere.

The delay in paying for delivered maize has also made farmers sceptical about selling their maize to GMB. The delay emanates from the fact GMB first accumulates maize from farmers at its depots first, then sends that information to government indicating how much maize they have taken and the money required to pay for it.  However government has its own bureaucracies that will delay the whole process. Ideally Government should just indicate to GMB at the start of the year, how much maize it requires for its SGR and makes sure that the money has been provided for in the national budget and given to GMB in advance. That way, GMB will be able to pay farmers on the spot. One hopes that as national budget consultations are taking place, the Minister of Finance will consider this option.

Government has always been muting the idea of a commodity exchange where farmers can sell their grain and other crops in a free market environment. The astronomical rise of tobacco sold from 55,4 million kilogrammes in 2006 to the 216 million kg this year has been attributed to an efficient marketing system where farmers are paid for their crop on the spot.

A commodity exchange provides that option and besides spot payments, farmers can use a warehouse receipt system where they can deposit their maize and use the receipts as collateral security to borrow from banks. A commodity exchange provides price discovery through the interaction of sellers and buyers and removes the need to come up with a floor price every year.

Government is therefore on the right path to mobilise its small scale farmers to produce enough food for themselves as well as for the country through the Presidential Inputs Scheme. The necessary infrastructure to store the maize in a SGR is also available at several GMB silos and Government recently provided funding to maintain them. What remains is for it to complete the puzzle by setting up the commodity exchange market to ensure orderly and efficient marketing of grains by farmers.

Peter Gambara is an agricultural economist and a local farmer.