Producer price rise not enough - farmers

The Zimbabwe government's announced increase this week in the producer price of maize and wheat is too low and does not cover escalating production costs, farmers' representatives told IRIN.

The price of maize had been raised to Zim $28,000 per mt (US $509 at the official rate), from Zim $15,000 (US $272) and wheat from Zim $25,000 (US $454) to Zim $40,000 (US $727) per mt. The government-controlled Grain Marketing Board (GMB) would still sell the maize at the subsidised price of Zim $9,600 (US $174) per mt and wheat at Zim $29,600 (US $538) per mt.

The minister of lands, agriculture and rural resettlement, Joseph Made, told the media this was to encourage more farmers to produce maize as a commercial crop and to ensure adequate supplies. It also showed the government's commitment to the land reform programme, he said.

"We find it [the increase] unrealistic in the environment of hyper-inflation that we have at the moment," said Doug Taylor-Freeme, vice president of commodities for the Commercial Farmers Union.

A more accurate producer price would be about Zim $60,000 per mt (US $1,090) as it cost about Zim $43,000 per mt (US $781) to produce the maize, he said.

"We believe the prices should be set on an export/import parity basis. At the moment Zimbabwe imports from countries in the region, like South Africa, and we pay a higher price to South African farmers to import but we should be paying this to local farmers."

Vanessa McKay of the Zimbabwe Grain Producers Association said the new price was not likely to be an incentive as costs had increased 122 percent.

"We've just gone through a difficult agricultural season and large scale farmers need to recover from the losses they made during the dry period. They have to be able to buy adequate inputs for next season. [The increase] is not nearly enough to put farmers in a strong position for next season," she said.

McKay said the current poor prices had already created a thriving parallel "bucket" market run by small scale farmers.
In defiance of laws banning anyone other than the GMB selling grain, they were selling buckets of maize in markets for up to Zim $83,000 per mt (US $1,509).

The government's grain policy, which also prohibits private imports and fixes the selling price, has been cited as one of the contributors to the country's chronic grain shortage.

McKay warned that by the end of July the country would have a total "stock out" of maize. Wheat is already rationed. The World Food Programme has warned that up to six million people will not have enough food this year because of the complex food crisis.