Think Outside the Box, Zimbabwe Vice President Tells Agricultural Industry

Republic of Zimbabwe Vice President Joice Mujuru. Zimbabwe is building relations with other African, Asian and Latin American states to offset the impact of Western sanctions., a photo by Pan-African News Wire File Photos on Flickr.

Think outside the box: Mujuru

Thursday, 04 October 2012 00:00
Walter Muchinguri Assistant Business Editor
Zimbabwe Herald

STAKEHOLDERS in the agricultural industry have been urged to find common ground to reach an amicable solution to the problems affecting the sector to ensure a successful 2012/13 season.

Addressing the stakeholders during a breakfast meeting in Harare yesterday, to gauge the country’s preparedness for the coming season, Vice President Joice Mujuru said the solution should be one that guarantees a win-win situation for all.

The stakeholders included ministers, permanent secretaries, bankers, seed houses, agro-chemical manufacturers, fertiliser companies, millers, power utility Zesa Holdings and the Rural Electrification Agency.

Said VP Mujuru: “The challenges that we have in the agriculture sector require a holistic approach because Government cannot do it alone, without the private sector. We are partners. We are all equal and very important.

“Yes, as Government there are things that we have done in the past that have impeded the private sector from operating successfully. But we are willing to listen to your concerns and discuss those things to ensure that they are corrected to enable us to move forward.”

The Vice President chairs the Government task force on food and nutrition security which organised the meeting.

She said resolving the challenges in the sector would also require innovation.

“We need to think outside the box, as it were,” she said. “It’s not enough, for instance, for fertiliser and seed companies to depend on the Government through GMB for a market for their products. They should be going out there into the remote parts of the country because that is where the farmers are. The market is out there and they should be where the market is.

“Go and work with those people out there.

They are the ones who will grow your businesses. We really need to change the combination. When we talk of the agriculture sector, we are not talking of other people but ourselves. We really need to do our part.”

VP Mujuru said the Government would not tolerate the continued exploitation of farmers under the contract farming system.

The Vice President’s comments came on the back of presentations made by representatives of various sectors that feed into the agriculture sector.

Seed Co managing director Mr Denias Zaranyika, speaking on behalf of seed houses, said they were prepared for the coming season as they had 64 000 tonnes of seed maize, more than enough for the country’s requirement.

But he indicated that they were concerned about the slow uptake of available stock due to the liquidity challenges obtaining in the market, as farmers were still owed money by the Grain Marketing Board.

He said the low uptake was worrying as they had to roll over stock from previous seasons into the next season. This was resulting in the depreciation of the germinating rate of the seed.

“The germination of our seed deteriorates over time, from about 90 percent to about 60 percent, after two years, and in some cases, we have had to destroy seed that has deteriorated because we do not want to disadvantage the farmer,” he said.

Mr Zaranyika also noted that the low uptake put a strain on them, as they have had to borrow to finance operations at a time when the Government and agro-dealers owed them money.

“We are owed money by almost everyone and as a result we have not been able to pay seed producers who have been holding on to their produce, which includes part of the 64 000 tonnes that I talked about,” he said.

He added that while their wish was to have their product within a 5km radius from the farmers, they were facing challenges in that they were still owed money by agro- dealers and could not continue extending credit to them.

Chemplex Corporation Limited chief executive Mr Misheck Kachere, the spokesman for the fertiliser industry, echoed Mr Zaranyika’s sentiments on payments and loans and urged the Government to grant the industry special dispensation to export so as to raise money to increase production.

“I know that the issue of exports is hard to justify, but when we export we are paid cash and this will enable us to expand,” he said.

Barclays Bank of Zimbabwe managing director Mr George Guvamatanga, the Bankers’ Association of Zimbabwe and Business Council of Zimbabwe president, said they were keen to support farmers but were concerned about the high cases of defaults, with banks already being owed US$90 million by farmers.

He said the highest default in the banking sector was from the agriculture sector.

“As of yesterday banks have loaned out US$1 billion to the agriculture sector. We want to support the agriculture sector from the industry to the farmers but farmers need to learn to repay their loans.

“I do not know whether this defaulting is emanating from a culture where farmers are used to getting inputs from Government without paying for them,” he said.

Mr Guvamatanga cited an example where a tobacco farmer who owed his bank money managed to outwit his officials who had gone to recover the loans as the farmer was delivering his tobacco at the floor through the use of seven grower’s numbers that did not belong to him.

In this regard he said that it was critical to reintroduce the stop order system within the industry to ensure that farmers pay back their loans.

He also called for a brainstorming session to chart the way forward on how the 99-year leases can be turned into bankable instruments.

Turning to interest rates, Mr Guvamatanga said the Ministry of Finance, the Reserve Bank of Zimbabwe and the BAZ were working towards coming up with interest rates that would be fair and reasonable. He said the three recently signed a Memorandum of Understanding to find a common level for interest rates and the MoU is still being circulated.

Mr Guvamatanga also called for timely preparations for upcoming agricultural seasons.

“Why do we need to wait till October to plan for the next season, why can’t we meet in January or February? Why do we need to create a crisis?”

The principal director in the Ministry of Finance, Mr Pfungwa Kunaka, said they were cognisant of the need for Government to settle its debt obligation to stakeholders in the agricultural season.

To this end, he said the GMB had been capacitated to pay all farmers who delivered their maize before August 31 this year and only a balance of US$3 million for deliveries after August 31 was still outstanding.

In terms of the US$40 million owed to seed houses and fertiliser companies Mr Kunaka said they had approached banks for bridging finance to offset some of the debts while Government has authorised the disposal of some of the maize stocks that GMB is holding.

“Government took a conscious decision that the money received will be ploughed back into agriculture to pay off fertiliser companies, seed houses and transporters,” he said.

Mr Kunaka also indicated that they were also coming up with measures to deal with inter-parastatal debt as part of efforts to get the agricultural industry back on track.

Agricultural and Rural Development Authority chairman Mr Basil Nyabadza said that there is need for the agriculture sector to move away from over-reliance on Government.

“For instance, the Agriculture Marketing Authority should partner with one of our mines to raise money which will then be used to finance those agriculture sectors with quick-wins,” he said.

He added that future meeting should be held in the rural or farming areas where farmers could also have a say.