Farmers welcome new producer prices
Precious Manomano Herald Reporter
Government has announced pre-planting producer prices for the present summer cropping season in US dollars at levels high enough to ensure average farmers can make a profit.
Farmers have welcomed the development.
Maize is set at US$335/tonne, almost the same as what an imported tonne would cost once landed in Zimbabwe.
The pre-planting producer price for maize of US$335 a tonne, with production costs estimated at US$1,602,20 a hectare and average yields at 5,5 tonnes a hectare, gives an average farmer a profit of US$43 on each tonne and US$240 for each hectare. The percentages of the producer price paid in local and foreign currency is set later on when final producer prices are announced. The pre-planting prices guarantee farmers the base price, with the final price being the same or higher.
Producer prices for traditional grains are set at the same US$335 a tonne; soya beans at US$597,59 a tonne, sunflower at US$687,23 a tonne, cotton grade D at US$0,40/kg, grade C at US$0,41/kg, grade B at US$0,43kg/kg and Grade A US$0,46/kg.
Speaking during a press conference on pre-planting producer prices for 2022/23 summer season crops, Lands, Agriculture, Fisheries, Water and Rural Development Minister Dr Anxious Masuka said the pre-planting producer price had a bearing on the planning, production and management regimes.
Dr Masuka said he seeks authority and guidance together with the Minister of Finance and Economic Development Professor Mthuli Ncube from President Mnangagwa.
“A viable pre-planting producer price will incentivise farmers to commit more land under specific strategic crops. The marketing and pricing system being proposed is consistent with achieving both food and nutrition security and macroeconomic stability,” he said.
The price determination of maize, said Dr Masuku, is based on the approved pricing policy which uses a standardised maize production model, a cost-plus model. It assumes an average yield level of 5.5/ha and a 15 percent margin above the break even price as the profit margin.
“From the model, the total cost of producing a hectare of maize is US$1,602,20 and the break even price is US$291.31. The model also uses a yield assumption of 5.5 tonnes per ha for a farmer committing inputs in the ranges as highlighted in the maize budget. The major cost factor is fertiliser taking up about 48.6 percent of the total cost per hectare. The import parity price for maize ranges from US$330 to US$458 per tonne,” he said.
The import parity price is what imported maize and the required transport and other costs total by the time the grain reaches Zimbabwe.
The price of soya beans and sunflower is based on the approved pricing policy which uses the standardised production model with cost-plus pricing and a 15 percent profit margin. In addition sunflower is set at 15 percent above the price of soya bean.
Dr Masuka added that the import parity price for soya bean ranges from US$690/tonne to US$744/tonne.
He said the proposed prices for maize, traditional grains, soya beans and sunflower are obligatory prices for grains purchased by GMB and the proposed price for cotton is obligatory price for cotton purchased by Cottco.
Zimbabwe Indigenous Women Farmers Trust president Mrs Depinah Nkomo applauded Government for reviewing the producer prices but said farmers expected a maize producer price that is higher than US$335, adding that the cost of production is relatively high.
“We, however, expected a higher price for maize considering that it’s a staple food. Majority of farmers are in maize production and they enjoy it. We want farmers not to lose interest and continue their hard work in farming. Yes, we also have many farmers who are in traditional grains and we persuade them to keep on planting as they are drought resistant crops. We also feel this year there is possibility of a good harvest. We expected higher prices in all crops but reviewing of producer prices is a positive initiative in farming seasons as it guides farmers,” she said.
Zimbabwe Commercial Farmers’ Union president Dr Shadreck Makombe was grateful for the positive development shown by the Government, adding that the short season varieties are critical during this period.
“As farmers, we are happy with the pre-planting producer prices. It shows the Government is sensitive to the plight of farmers and in the same vein, we encourage farmers to work hard this season so that they will achieve a better yield which will enable them to embark on farming again the next season. Sunflower is crucial, planting is still on, it’s not too late,” he said.
Maize, traditional grains, soya bean and cotton are strategic crops which play an integral role in the Zimbabwean economy. The pre-planting prices and marketing arrangements are announced every year before the planting season.