ED defends GMB prices

zanu-pf  Second Secretary and Acting President Emmerson Mnangagwa and Secretary for Finance Obert Mpofu (right) share a lighter moment at the revolutionary party’s National Fundraising Business Breakfast meeting in Harare yesterday. — Picture by Kudakwashe Hunda

zanu-pf Second Secretary and Acting President Emmerson Mnangagwa and Secretary for Finance Obert Mpofu (right) share a lighter moment at the revolutionary party’s National Fundraising Business Breakfast meeting in Harare yesterday. — Picture by Kudakwashe Hunda

Zvamaida Murwira Senior Reporter
Acting President Emmerson Mnangagwa yesterday defended an arrangement by the Grain Marketing Board (GMB) in which it buys grain from farmers at $390 per tonne and sells it to millers at $250 saying the decision was meant to ensure that millers saved foreign currency from grain imports.

Acting President Mnangagwa was addressing a Zanu-PF national fundraising business breakfast meeting in Harare held under the theme; “Command Agriculture and its Impact on the industry and the economy at large” He said the media was criticising GMB arguing that the arrangement was not economically viable.

“The media thinks it is uneconomic. It is very economic,” said Acting President Mnangagwa.

He said the $390 per tonne was meant to enable farmers to remain on the land by paying viable producer price while millers bought grain at $250 to ensure that they did not import grain thereby saving foreign currency.

“If we do not produce enough maize in this country, the millers will have to import maize from outside Zimbabwe. They will spend between $800 million and $1 billion (a year) in importing grain into Zimbabwe and that is strengthening or paying farmers in other countries,” said Acting President Mnangagwa.

“They bring in that grain at an average of the import parity price of $250 per tonne. So we got together as stakeholders, which include financial service sector, millers, seed companies, chemical companies and farming organisations and agreed with millers that they stop importing maize from other countries.”

Acting President Mnangagwa said it was agreed that the millers would pay in advance their purchase of grain from GMB and would draw down their maize while the grain utility used the money to pay farmers.

“If it is $800 million, they give us the $800 million which they have been using to import grain at $250 per tonne. Chinamasa has to pay $390 to the farmers. If we get the $250 from millers, Chinamasa will pay the difference of $140, so the fiscus has been assisted and the millers just have to draw grain from GMB,” said Acting President Mnangagwa.

He said the millers would have to make regular payments of his or her grain requirement per year to the GMB as an advance payment. “The farmer is happy, the miller is happy and we are happy. So the media, that is the trick,” said Acting President drawing laughter from the floor.

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  • yowe

    Hazvina kana musoro izvi how is Chinamasa funding that 140…iri kubva kupi mari iyoyo??

  • kutototo

    The explanation clearly shows that dunderheads really exist. A normal leader should be investigating the cost drivers and come up with solutions so that our farmers can be competitive.

  • Dr Newton Galileo Einsten

    Gvt effectively pays farmers the extra 140/ton so that the farmers can pay back command agric loans to the same gvt! But I think the issue is to suffer a better loss of 140 per ton and have control on prices of mealie meal and not expose the market to the vagaries of import based costing. If millers are allowed to buy from outside not only at higher prices but also for hard currency , its a darker devil than controlled transactions in zim using transfers and bond notes. By no means, the gvt is not aiming profitability. They have never been, the idea is to minimise losses and arrest inflation. The gvt can easily create funds albeit under fuzzy schemes to fund such clear deficits. Its on a clearer radar screen than a deficit that hides in the negative BOP if they allow uncontrolled imports. And elections are near , this gvt goes populist . Remember utility bills nullified the other time?

  • Analyst

    no, you didn’t not understand what he said..no grain will be sold for $230.. its just being given back to those who funded the program at $230 per ton.. very simple indeed

  • Analyst

    which is better paying US$ 250 real us $ to a foreign farmer and $390 bond notes to local farmer? after all the farmer will pay back part of $390 to gvt meaning it won’t make any loss at all

  • Moe_Scyslack2

    Do you even know how subsidies work? Farmers are given subsidies so they sell more and become competitive. These can even be in the form of tax breaks, etc. But to buy something for $390 then in 2 seconds sell that same commodity for $250 is moronic. Why aren’t millers buying directly from the farmers and cut out the moribund GMB? Because croc and his minions are busy pilfering our tax dollars and people like you are urging him on muchizhinya kunge $2 hooker.

  • jaison manyasha

    If gmb pays off farmers at $390 a tone the cost will rise to $550 per tone due to labour cost,electricity and water charges since history growing maize &wheat in zim is worse than to import .our gvment can import maize for less than $2oo and sell it to millers @ $250 a tone