Soya bean growing deal collapses
By Tabitha Mutenga, Features and Supplements Editor
SOYABEAN contract growing arrangements mooted last year by stakeholders have collapsed due to failure by the Oil Expressers Association of Zimbabwe (OEAZ) to provide the offtake agreements required by financial institutions.
Many of the OEAZ members have been unwilling to guarantee farmers’ loans, arguing that banks were in a better position to issue loans directly to the farmers.
Under the initial contract arrangement, banks were to advance cash to OEAZ members, who were to act as the guarantors for the farmers who received the loans. But OEAZ members, fearing the risks involved, refused to be the guarantors and requested the banks to deal directly with the farmers.
“We are aware banks … have been supporting production of soya beans and our members have been required to give offtake agreements, but most of them are unwilling to give security for loans to farmers as the bank is in a better position to secure the loan to the farmer,” OEAZ chairman Busisa Moyo told The Financial Gazette.
The oil producers were expected to mobilise $100 million worth of inputs and irrigation infrastructure to improve production in the 2017/2018 growing season.
In preparation for the season, through command agriculture, government was targeting 150 000 tonnes of soya beans.
Soya bean farmers experienced a number of challenges, but production is expected to surpass the 30 000 tonnes achieved last season.
The association has also called on government to criminalise side-marketing to boost contract farming in the 2018/2019 season.
“The side marketing loophole has affected some of our members immensely,” said Moyo.
Stakeholders have previously urged government to expand the scope of Statutory Instrument 79 of 2017, Agriculture Marketing Authority (Command Agriculture Scheme for Domestic Crop, Livestock and Fisheries Production) Regulations, 2017 to include civil contracting agreements between farmers and private sector players to curb side marketing.
“We will be holding an all-important meeting in February to discuss pre-harvesting pricing and the command pricing mechanism as mooted by Ministry of Agriculture,” said Moyo.
“(We want to see) how it’s going to operate so that we (are able to) access soya beans at import parity in order to provide affordable stock feeds and cooking oil to the consuming public,” Moyo said.
The Ministry of Agriculture had proposed a price of $780 per tonne.
The soya bean value chain affects edible oil prices, soya meal and soya protein feeds, chicken meat prices, egg prices, fish pricing, pork and sausage pricing, soya chunk prices, tofu and lactose free soya milk pricing.
“This is a huge value chain that has been neglected over the last 17 years, but is valued at $0,5 billion and has the potential to generate exports of at least a dozen products.”
The association is targeting 240 000 tonnes of soya bean in the next three to four years and will be able to employ at least 10 000 people.
The country has a crushing capacity of 500 000 tonnes, but capacity utilisation is at 16 percent, owing to limited supply of soya beans and foreign currency for imports.
“We also trust government will allow oil expressers to enter into joint ventures for corporate farming by availing secure land over the next few years,” Moyo added.
Despite government’s intervention under Command Soya beans and the Presidential Well Wishers Programme, which distributed seed to farmers, fertiliser shortages and the Fall Armyworm have been major challenges to the production of the crop.
The major drawback during the planting season was that the seed was distributed without the corresponding basal fertiliser and farmers planted the crop either without fertilisers or with very little basal fertilisers.
Despite its importance, soya bean production has been on the decline from 150 000 tonnes in 2000 to 35 000 tonnes in 2017, the lowest output since the land reform programme.
This falls short of the national demand of
220 000 tonnes.
“We are glad the government is now fully aware of the importance of the crop and have included the soya value chain in the Rapid Result Programme for 2018 to 2019. Our target is to grow 240 000 tonnes of soya bean in three to four years and employ at least 10 000 directly as value chain people and benefit at least twice as many farmers, including small holder farmers.
“We also trust government will allow oil expressers to enter into joint ventures for corporate farming by availing secure land over the next few years,” Moyo said.