GMAZ threatens to stop payments to farmers

Tafadzwa Musarara

Tafadzwa Musarara

Business Reporter
THE Grain Millers Association of Zimbabwe might stop paying farmers for maize produced under Command Agriculture if Government insists on fortification implementation. GMAZ has a standing agreement with Government in terms of which, it pledged to buy 800 000 tonnes of grain at a cost of $200 million and relieve pressure on cash strapped Treasury. The grain millers have already given an ultimatum, which will lapse at the end of this week, to waive the Statutory Instrument 120 of 2017, which provides for fortification.

If the millers continue with their proposed threat, the 2017/ 2018 summer cropping preparations may suffer a major setback due to the delays in payments to the farmers.

GMAZ chairman Tafadzwa Musarara told The Herald Business this week that Government needed to make up its mind, warning payments to farmers would be jeopardised.

Said Mr Musarara: “We have agreed a $200 million payment to the maize crop under the Command Agriculture Scheme until December (2017) with the Government. Of that amount we have already committed $10 million for the grain silo construction.

“We are confused with this fortification issue which needs us to pay more money for the nutrients additions when we already have committed a significant amount to another Government programme.

“To us there’s no point in continuing to buy maize because we have no extra money for the fortificants. This will not bring any good to the agriculture sector since it might slow down payment of farmers and affect the next summer cropping season as more farmers depend on these finances to kick start a season,” Mr Musarara said.

“Our commitment to the deal depends on the progress of the fortification issue.”

Health and Child Care Deputy Minister, Dr Aldrin Musiiwa said individuals could request for a grace period for the fortification.

“If individual companies in the milling and baking industry can come up with their vindications, we may consider giving them a waiver until the time they had given to comply with the law. We can’t stop the fortification process as it has become law and no one can challenge it now.

“We are free to negotiate with anyone or any company but what we don’t want is for an individual to lobby for a group of people without coming to see us as an individual,” said Dr Musiiwa.

Millers have been paying an average of $30 million per month towards purchasing the Command Agriculture produce depending on the availability of finances at any given period.

GMAZ claims that SI 120 lacked adequate consultation within Government departments as ministries such as Industry and Commerce and other relevant arms Government such as the Reserve bank of Zimbabwe have been left out in consultations.

GMAZ said since beginning of last month, health inspectors have been trailing millers and threatening to close down their companies.

This is despite that the milling and baking industry have aggregate outstanding Nostro currency liabilities of $87 million for shipments received and consumed as way back as August last year.

Millers also indicated that wheat imported and milled for the 2016 festive season was yet to be paid for.

They accuse the Ministry of Health and Child Care of imposing SI 120 instead of an raising awareness campaign being to inform and gain consumer acceptance on the food fortification.

The Grain Milers also fear that the consumers may resist buying food with artificial additives resulting in significant slump in sales, which will precipitate unprecedented losses to them.

The mandatory fortification programme will apply selectively to commercial millers and exempt hammer millers, considering that 70 percent of the country’s population resides in the rural areas where millers will grind grain without adding any nutrients.

Given millers’ contribution to the 2016 /2017 summer cropping and 2017 winter wheat, mandatory fortification may negatively impact the upcoming farming season.

Cooking oil producers are also resisting the compulsory fortification citing gratuitous costs associated with the procuring the fortificants, which requires specialist equipment.

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  • Jemedzo

    I think some of these associations are not developmental at all. They always operate through threats. This GMZ has been at the center of controversy with regards to grain management in the country. During the time we were importing grain to feed the nation they were busy diverting the grain to their premises and charging exorbitant prices when people came to buy grain from them and they set up grinding mills all over where they were forcing people to buy a certain minimum quantity in order for them to grind the grain for you.
    The issue of fortification is international and is to ensure people get nutritious food that improves their health. The GMZ should have been t the fore front of making sure their products are fortified instead of holding the government to ransom. We have ten universities in our country the GMZ should be dialoguing with the universities to develop the fortification ingredients locally thus creating local industries.