‘Banks must help prepay farmers’ Zesa bills’
THE Government has implored local banks to pre-pay a portion of electricity bills for farmers and treat power as an essential input like seed and fertiliser.
The move is expected to reduce the financial risks faced by farmers, as they will no longer have to worry about unexpected electricity costs that could jeopardise their operations.
Electricity is a crucial component of agriculture, and as one of the major costs, pre-paying bills can significantly alleviate the financial burden on farmers.
“The banks will be encouraged to treat electricity as an input and pre-pay part of the estimated bill on behalf of the farmer as they do for seed and fertiliser,” according to the Government Summer Plan for 2024/25season.
The Government has noted that the success of the summer cropping season hinged on a consistent electricity supply for irrigation.
To address this critical need, the ministries of Lands, Agriculture, Fisheries, Water and Rural Development, and Energy and Power Development have established an agriculture energy task force to coordinate strategies and ensure adequate electricity provision.
As a way of supporting production, supply to the farmers has been prioritised when power generation is not adequate to meet demand.
ZESA Holdings, the power utility, said it was mobilising financing for the installation of about 120 megawatts (MW) of solar power at productive farms.
This would ease the electricity demand load from farming on the system, and at the same time allow farmers to feedback excess energy to the grid.
The summer farming plan also noted that increasing frequency and severity of debilitating pests, diseases and climate-related risks necessitate a paradigm shift in agricultural insurance. Both Government and farmers must adopt new approaches to manage these challenges effectively.
To mitigate these risks, farmers will be encouraged to view insurance as a crucial input in their production processes and to insure their crops accordingly.
Weather-indexed insurance and area yield insurance, which have proven effective in climate-proofing agriculture, will be rolled out nation wide following successful pilot studies for all Pfumvudza production.
To further support smallholder farmers, the Government, through the Africa Risk Facility, has established a cover for agricultural risks.
To ensure clarity and direction on food security policy, the Government will announce planning, pre-planting and marketing prices.
The pricing system will be designed to balance food security objectives with macroeconomic stability.
The proposed marketing arrangements categorise farmers into five groups namely farmers financed under the Climate-Proofed Presidential Input Scheme (Pfumvudza/Intwasa), self-financed farmers, Government-guaranteed financed farmers supported by selected banks, farmers financed by private contractors and ARDA-financed farmers. It has been proposed that the Grain Marketing Board (GMB) will purchase all summer crops financed under the Presidential Input Programme and ARDA scheme, as well as by self-financed farmers, acting as the buyer of last resort.
Contractors may also sell their crops to GMB.
All contractors, including the Food Crop Contractors Association (FCCA), Commercial Bank of Zimbabwe (CBZ), Agriculture Finance Corporation (AFC) and NMB Bank, are obligated to buy back contracted wheat at market prices. Self-financed farmers can sell their crops to the best advantage on the market or to GMB.
The GMB will provide commercial warehouse receipt services to all stakeholders.
The Zimbabwe Mercantile Exchange (ZMX) will offer a central warehouse receipt system and spot market trading platform for agricultural commodities.
A Statutory Instrument will mandate private players to provide returns on grain storage to enable tracking of national grain stocks, including wheat.-herald
