Grain producers want forex payment

Pressure mounts for Treasury as farmers on Wednesday demanded that a fraction of the new grain prices they receive this year be paid in foreign currency to ensure they are hedged against inflation.

The Government on Tuesday set new prices for maize and traditional grains at $75 000 per tonne, up from $58 000 and $70 000, respectively.

Soya bean will now be sold at $171 495 per tonne from $125 530.17 while sunflower flour will go for $205 794.52 per tonne up from $150 686.20.

However, farmers’ representatives said that the new prices would be eroded by inflation before they procured inputs for the next cropping season.

Zimbabwe Commercial Farmers’ Union president, Mayiwepi Jiti, said while the upward review of producer prices was commendable, a fraction should be in United States Dollars and another in local currency.

“The amount is okay, but the challenge is when we want to go and buy. Everything is priced using the parallel market rate of the United States dollar. If you buy in ZWL, they charge you using the black market rate.

“The best thing is to pay a certain fraction in United States dollars and the rest in local currency like what they are doing for tobacco where they are paying 75 percent in USD and 25 percent in Zimbabwean dollars,” she said. Past president of the organisation, Wonder Chabikwa, said paying the whole amount in
local currency would prevent farmers from breaking even and returning to the field the next season.

“We would have benefited if only the exchange rate of the local currency was stable against the United States dollar,” he said.

The Government said the new grain producer prices were intended to maintain farmer viability and profitability.

Addressing a post-Cabinet briefing Tuesday, Information, Media and Broadcasting Services Minister, Monica Mutsvangwa, said: “A good price that promotes sustainable growth of a particular value chain is that which allows the farmer to realise at least a 15 per cent profit margin.”-eBusiness Weekly