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Maize buyers should consider production costs

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IT is almost 90 days since farmers began harvesting and selling their maize.
And farmers are negotiating with buyers for better prices.
The grain marketing season begins on April 1.
Past marketing seasons have been characterised by price disputes with farmers not happy with prices offered by private buyers taking advantage of the failure by the Grain Marketing Board (GMB) to pay farmers on time.
Last year, the Government intervened by gazetting Statutory Instrument (SI) 122 of 2014 that regulated the minimum mandatory grain producer prices.
The SI announced that Government minimum producer prices of grain including maize and wheat at the beginning of marketing seasons.
Government announced at the commencement of the previous maize marketing season that the producer price would be US$390 per tonne.
Then Zimbabwe had the highest prevailing producer price of US$320 in the Southern Africa region with the average price ranging from US$200 to US$220.
This season, the market has been liberalised a move that has left the farmers once again being taken advantage of by private buyers.
Private buyers are buying a tonne of maize for as low as US$180 arguing that it was in tandem with the import parity price.
Zimbabwe Commercial Farmers Union president, Wonder Chabikwa said the situation on the ground was depressing as maize farmers were being ripped off by the private buyers.
Farmers have continued to shun delivering maize to GMB as it has failed to pay them.
The inability by GMB to pay farmers on time has, however, remained a worrying issue with market watchers arguing that if the entity continues to pay farmers late maize production will suffer.
“This is a very difficult time for the farmers as they have the crop and the buyers are offering prices that will not allow them to break even,” he said.
“Maize buyers want to make huge profits at the expense of farmers, offering them prices lower than the cost of production.
“Grain traders and millers are taking advantage of the loss of confidence by farmers to GMB and offering prices that will not allow farmers to break even.”
Millers have indicated that the floor price of importing a tonne of maize from neighbouring countries was less than buying locally.
Like other products on the market, calls have been made to allow market forces to determine the prices of maize rather than having a flat price guiding the different stages of the season.
Chabikwa said it was not fair for buyers to use the prices offered in the region as a benchmark.
“The cost of production for local farmers is higher than that of their counterparts in the region,” he said.
“Our local farmers are being made to compete with farmers say in Zambia who have most of their inputs subsidised.
“For instance our electricity is US14 cents per kilowatt while our counterparts in Zambia pay US2 cents.
“Our borrowing rates from banks are higher than those in the region.
“Locally rates are as high as 200 percent while those in the region range between 10 and 50 percent.”
Most farmers in the region are subsided by Government with others using GMO seed that produce a much higher yield per hectare compared to traditional seeds used locally.
Chabikwa said the liberalisation of the market was negatively affecting the farmers.
“Now that the market is open the farmer has emerged the biggest loser,” he said.
“If farmers are to prove that the Land Reform Programme was noble and it remains a success the playing field should be even with farmers also benefitting from their efforts.”
Agriculture has remained the key sector of the country’s economy.
Under the Land Reform Programme, more than 400 000 black households benefitted and since then, indigenes have been the drivers of the sector.
Despite efforts by the West to sabotage the programme resettled farmers have remained resilient with Government being the major supporter of resettled farmers.
So as the marketing of maize continues, it is hoped that farmers and buyers reach an agreement with the latter offering favourable prices.

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