Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Post-mortem of winter wheat season

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: 
pgambara@hotmail.com 

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