Manufacturers intensify contract farming

FOOD manufacturing entities will be intensifying their contract farming initiatives for the 2022-23 summer cropping season as they come up with strategies that ensure reliability of raw materials supply.

This is coming from the need to localise the production of raw materials after 2022 proved to be a menace characterised by immense disruptions emanating from the Russia-Ukraine conflict which kickstarted in February this year.

Supply chains were severely disrupted as the two countries, which provide a considerable global market with raw materials, particularly for oils and confectionery, were embroiled in territorial conflict.

Ukraine’s inability to export grain throughout the first five months of the conflict worsened a global hunger crisis, with catastrophic impacts throughout the world.

Generally, the global economy continues to be weakened by the conflict through significant disruptions in trade as well as food and fuel price shocks, all of which are contributing to high inflation and subsequent tightening in global financing conditions.

This means Zimbabwe can easily remain a victim of imported inflation if it continues to get the bulk of its raw materials from other countries.

In that regard, cooking oil and margarine manufacturing group, Pure Oil says it has this season embarked on a 125 000 hectare contract farming initiative for sunflower production, incorporating small scale farmers across the country.

This will enable the small-scale farmers to participate in the local agriculture value chain and also boost raw material supplies needed for Pure Oil’s premium branded sunflower cooking oil.

To date, the programme has managed to plant over 109 000 hectares of the crop as Pure Oil distributed free seed across the country.

This is a significant growth from last year’s pilot project where 3 000 hectares of sunflower was planted.

The company’s partnership with farmers follows pressing need for the availability of locally sourced raw materials for crushing and manufacturing cooking oil.

Historically Zimbabwe’s cooking oil was extracted mainly from sunflowers but it has deteriorated over the years owing to a drastic decline in the production of the crop and lack of processing capabilities within manufacturing entities.

As a result, Crude Degummed Soya Bean Oil (CDSBO) has grown to become one of Zimbabwe’s major raw material imports gobbling a significant amount of foreign currency
yearly according to Reserve Bank of Zimbabwe (RBZ).

Soyabean oil and its fractions are some of Zimbabwe’s major imports accounting for 2,54 percent of total import flow to Zimbabwe in 2020.

Zimbabwe requires up to 750 000 tonnes of soyabean per year for cooking oil production to attain self-sufficiency,and according to ZimStats data the country managed to harvest 71 290 tonnes in the 2020-21 soyabean production from a national hectarage of 46 158 thus still imports huge quantities of soya bean oil, due to low levels of production.

Critically, having locally produced sunflower will reduce the demand of imported CDSBO effectively lessening the amount of foreign currency used for purchase of the raw material.

“Farmers stopped growing it so we started a pilot project last year, where we did 3 000 hectares, we saw the success and this year we are doing a bigger free input scheme for 125 000 hectares.

“Majority of cooking oil which is being processed here is from imported crude oil because as a country we are not able to produce oil seeds , so sunflower is one oil seed which has very high oil content and it is a very healthy oil, it is one of the healthiest cooking oil one can have,” said Mr Pradyumn Ganediwal the executive chairman of Pure Oil Industries in an interview with the Business Weekly.

If executed effectively the initiative will help in curbing the ever-growing import bill with regard to raw materials used in making cooking oil.

He also indicated that the company would be opening buying points across the country to ensure that farmers have no need to travel long distances to sale their produce.

“We realised that the small-scale farmers, in particular, need to have some cash crop as a summer crop, so sunflower is one of the easy crops to grow, yes cotton is also a good cash crop, but cotton needs regular pesticides,” he added.

All this is coming as government is creating more synergies with the private sector to achieve the desired yield for crops used in cooking oil production.

Another corporate, National Foods in its 2022 annual report indicated that it continues to “keenly” support the production of critical raw materials required in their business encompassing maize, soyabean, wheat, sugar beans, sorghum and popcorn.

Further indicating that the various products grown under this program now constitute a significant portion of the group’s raw material requirements.

“During the current winter season around 12 000 hectares of wheat has been planted, representing a significant portion of the contracted crop.

“In addition to this, 40,000 tonnes of maize and soyabean were delivered on this year’s summer cropping programme,” said Mr Todd Moyo, National Foods Independent, non-executive chairperson in its annual report.-ebusinessweeky