GMB can do with a bit of seriousness

Agri-Insight with Obert Chifamba
Last week, The Herald newspaper led with a story headlined “GMB’s $50 million storage headache” and when I first saw it, I thought they were grappling with problems of inadequate storage space for produce worth $50 million.

The sub-headlines “ . . . 75 percent national silos need repair” and “ . . . Command Agric spurs demand for space” jolted me out of my guessing game. The stark reality of the matter was there for me to appreciate even before I had gone through the story.

The Grain Marketing Board (GMB), reportedly has only three functional silo depots out of its 12 storage facilities countrywide and we are just a few months away from harvesting. Also, GMB has over 80 depots, 12 of which are equipped with silos designed to hold up to 500 000 tonnes of grain yet they are all dilapidated and need that whooping $50 million mentioned in the story’s headline for repairs.

On the one hand the country is expecting a bumper harvest, thanks to the Government’s Command Agriculture programme and God’s benevolence in releasing the normal to above normal rains currently being experienced. A total of 36 000 farmers have been contracted for the Command Agriculture programme and each is expected to deliver five tonnes from each hectare they planted.

These farmers have planted a total of 240 000 hectares of maize and assuming that each hectares yields the projected five tonnes or more, then it means they will generate a total of 1,2 million tonnes, which essentially means that GMB will not have sufficient storage facilities for all the grain to be produced this year.

In total, farmers, including those not contracted for Command Agriculture, have planted 1,2 million hectares of maize and most of them will surely have excess to sell to GMB, which means they will also contribute to the storage facility woes GMB will be facing after receiving the maize coming from the Command Agriculture programme.

It is an open secret that the few available silos that have escaped the dereliction curse will be up for the task of keeping the nation’s food reserves safely while the bulk that farmers will sell will likely be at the mercy of elements of the weather and human-inspired disasters. In 2014, in excess of 61 000 tonnes of maize in the custody of GMB deteriorated silos because of poor storage facilities.

This should have been a wakeup call for the parastatal to start renovating all silos and to date, they would have covered more than three quarters of their entire numbers. As we speak, the early planted maize should have ripened and starting to dry were it not for the incessant rains, which means that by the time it was going to be harvested and sent to GMB, there would be no storage space.

We must also not forget that as noises grow louder for farmers in arid regions to respond to climate change by switching from maize to small-grain crops such as rapoko, sorghum and millet that are more tolerant to drought, there are also chances of them producing surplus grain that may need to be sold to GMB where it will also be stored before disposal.

This means extra space is needed on top of that, which will be taken up by maize. Remember a tonne of sorghum is also fetching the same price with a tonne of maize, which will be an incentive for those farmers with surplus to sell. And from the look of things, more and more farmers are seeing the sense of switching to small grains, which are both drought tolerant and more satisfying in terms of nutritional elements in the wake of calls to observe healthy diets for better health.

But, picture this, in the unlikeliest scenario that GMB manages to provide storage facilities to all the grain coming from farmers, they will still be facing a monumental challenge in paying those farmers that produced maize independently, as has been the case every year.

Remember GMB buys a tonne of maize for $390, a price way higher than what Zimbabwe’s regional neighbours are offering, which means that with the prospects of a bumper harvest fast emerging from the horizon, GMB has to start planning once again. Of course they get funding from Treasury but under the current economic climate even Treasury is wobbling.

Maybe GMB may need to train more attention on its business unit and diversify lines of business to start generating more income, which it may use in times of distress and avoid over reliance on Treasury. It’s obvious millers will be looking for the cheapest maize for milling, which leaves them with external markets as their only option but Government has promised to stop all grain imports until GMB has exhausted all its stocks.

This may also mean local industry may scale down production and GMB will be left with lots of grain in their stocks against a background of poor storage facilities, which may be a sure recipe for promoting storage losses that may even cause food deficits.

 

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