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Editorial Comment: Agric inputs suppliers need mindset shift

17 Oct, 2019 - 00:10 0 Views
Editorial Comment: Agric inputs suppliers need mindset shift Fertiliser

The Herald

The majority of key players in the agriculture sector in Zimbabwe appear to have for long been paying leap service towards agriculture financing.

As such, Government has been the biggest financier of agriculture since the inception of agrarian reform in the country.

However, due to economic challenges the economy faces that has seen inflation eroding many Zimbabweans’ disposable income, we have reached a point where even a few people who used their free funds from savings and Diaspora remittance to buy fertilisers also being hamstrung.

Farming as a business is under threat as a few will be able to use own funds to finance operations and as such, the country’s food security next year will be seriously undermined unless Government comes to the rescue.

Appearing before the Parliamentary Portfolio Committee on Lands, Agriculture, Climate, Water and Rural Resettlement this week, fertiliser manufacturers bemoaned low uptake by farmers, arguing operations were under threat as their products remained in stock even at the onset of the cropping season without buyers.

The country is coming from a devastating drought for the 2018/19 farming season that has seen Government announcing plans to import at least 800 000 tonnes of maize to cover the deficit.

The background is that Government is battling to raise foreign currency for this exercise.

That challenge alone to us is huge enough to force all stakeholders into action to avoid poor harvests during 2019/20 season which is expected to receive normal rains with a bias towards below normal throughout the cropping season.

However, there are many factors weighing down on our farmers and the price of fertiliser as of this week, which was ranging between RTGS$500 and RTGS$600 for a 50 kilogramme bag, is just too much, and the majority will be pushed out of business.

Even fertiliser companies are also now feeling the heat given that stocks lying ideal without takers have become a cost inform of storage expenditure.

Workers need to be paid together with rates and other statutory obligations against a background of subdued sales figures.

It is against this background that we challenge our fertiliser manufacturers to think outside the box and design some programmes for farmers.

This year, many farmers are likely to go for less fertiliser-demanding crops, leaving many fertiliser companies in a quandary and when that happens, the question is what should the fertiliser firms do?

Some of them have a risk of scaling down operations and retrenching workers staring at them unless they are given the green light to export in the region to markets where their prices might be competitive.

However, there is a syndrome in the local economy where companies hedge and never want to take the risk by creating synergies through backwards and forward linkages.

Here is a classic case of fertiliser companies that are faced with closure, while hundreds of thousands of desperate farmers without fertilisers among other inputs, are there.

There is no doubt local and foreign markets for the farm produce also exist.

The fertiliser firms are just not prepared to directly sponsor farmers, they want someone to go to the bank, borrow money and sponsor the farmers to buy fertiliser from them — and bear that risk on their behalf.

That is now history, those risk takers are no longer there and the manufacturers are crying like hungry wolves.

Given that thousands of farmers have been disenfranchised, there is need for a mindset shift and inputs suppliers should take control of the game and finance the agricultural sector directly.

Money can be recouped through stop order systems upon the sale of the produce — since high risks in most cases are associated with higher returns.

This having been said, we should understand that these fertiliser company managers are taking custody of shareholders’ money and one of their major roles is to preserve investor value and make profits.

However, previous actions by Government have created farmers who do not pay back loans, resulting in many financiers either demanding collateral or using Government as a buffer.

The culture of wanton looting of some inputs and defaulting on loans has to come to an end and failure to do that will see agriculture failing to attract financiers.

Farming is a lucrative business and all land owners have to treat it as such.

Let’s call a spade a spade, those who fail to pay should lose their properties.

As Government continues to fine-tune the land ownership patterns in Zimbabwe, there should come a time when those failing to payback loans or underutilising the land should have this finite resource transferred to those willing to use it productively.

People should know that you can only derive value from farmland when you work on it.

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