FOOD price hikes have sparked demonstrations in many countries and Government should be careful when it comes to pricing mechanisms in any value chain system that end up triggering a scenario where product prices go beyond the reach of many people.
The increase in the prices of commodities such as bread, rice, sugar and cooking oil has caused demonstrations in Zimbabwe before, some of them even turned nasty.
This alone explains why Government should never take chances and allow industries and other service providers to unjustifiably increase prices of basic commodities. It is against this background that as soya bean farmers prepare to market their crop, there are so many unscrupulous middlemen who want to take advantage of their networks in banks to withdraw large amounts of cash to exploit our growers.
Already like in the tobacco sector, some traders are moving around promising desperate farmers cash if they supply them with soya beans.
Although Government this week implored soya bean farmers to be patient and not rush to sell their crop at give-away prices as the State is finalising a more viable price, it is our humble submission that this should not take too long as the growers are already under siege from the traders.
Before the announcement of the official producer prices, middlemen normally buy grains from farmers at very low prices and later sell it to the Grain Marketing Board at a higher price.
It is, however, intriguing that Lands, Agriculture and Rural Resettlement Deputy Minister Davis Marapira, yesterday said the new producer price will be announced in the next three weeks and when this happens, the farmers can plan for the next farming season.
“Government would like to inform the farming community that it is currently finalising a soyabean producer price for farmers, which will be much higher than the current GMB buying price. GMB is currently buying soyabean at $610 per tonne.
“Farmers are therefore requested to be patient and wait for this exercise to be finalised. Government wants the price benefit to go directly to the farmers. It is possible that people buying the soyabean will later on sell to GMB for a higher and better price. Farmers are encouraged to act wisely,” he said.
However, there is a greater need for Government to be mindful of the fact that the increase of soyabean price might have a boomerang effect if some mechanisms are not put in place to protect the consumers of soyabean products such as cooking oil, creamers and many other related products that constitute a reasonable component of a family’s meal.
If some unrealistic producer prices are set, what it means is that the oil processors will be left with no choice, but to pass the burden to the consumers. If Government moves to manage the prices, the country might be hit by a shortage of cooking oil.
Therefore as the authorities deliberate on the new soyabean price and to keep our farmers in business, it should be mindful of the latent consequences it might also have on the other side of the market.
The Deputy Minister said Government was expecting around 200 000 tonnes of soyabean during the 2017-18 marketing season and that the country expect to be self-sufficient in the next two years. However, that takes a great deal of planning for that to be achieved.
President Mnangagwa has declared the country’s economic future will be anchored on mining and agriculture and therefore that demand more support to the agriculture sector so that most of the crops are produced in abundance.
Government will from this season include oilseed crops under Command Agriculture and as part of strategies to boost production and ensure the processing industry has adequate raw materials to boost production capacity.
We implore the Government to continue supporting the agriculture sector until a time when farmers will be able to fund themselves and cut deals with the agriculture banks.