Farmers’ union moves to curb side marketing

THE Zimbabwe Farmers Union (ZFU) has called for improved market information sharing and timeous payment to farmers for produce deliveries as part of efforts to curb side marketing, which distorts commodity pricing.

Side marketing takes place when parties to the contract violate the agreement, either when a farmer sells to other merchants or when a company buys from farmers it has not contracted.

Speaking at the recent 10th Annual National Agribusiness Conference, ZFU chief executive officer, Mr Paul Zakaria, said in dealing with side marketing all players in the agricultural value chain have a role to play.

He was making a presentation on agricultural output marketing challenges for farming business sustainability.

Mr Zakaria said there are several factors that force farmers to side market their produce or look for alternative markets other than their contractors.

“Contractors only focus on funding their crop and neglect the farmer’s other essential needs,” he said.

“Without appropriate funding to cater for everyday costs, farmers will side market to finance other household costs.”

Mr Zakaria said late payments by contractors also put pressure on farmers as they have other needs and costs.

He added that farmer’s lack of appropriate information by farmers on produce costs also leads to side marketing.

“Farmers have been locked in unfair contractual agreements due to information asymmetry.

“Contractors are more enlightened about market prices than the farmers,” he said.

To curb side marketing, Mr Zakaria said farmers need to be equipped with relevant market information.

“Farmers should be capacitated in understanding contracts to prevent them from engaging in unfair contracts.

“There is also a need to improve the flow of market information and market trends. Mechanisms should be put in place to cushion repayment problems in years of poor weather, including strengthening the extension and other support services to address technical and other production problems at an early stage,” said Mr Zakaria.

Annual National Agribusiness Conference,

He added that policy measures are needed from the Government to ensure that the value chain remains viable including increasing foreign currency retention thresholds , export incentives and reduction in statutory obligations.

He implored contactors, both private and public ones to practice fair business practices “including fair pricing and stop fueling side marketing by procuring produce that they have not financed.”

Mr Zakaria urged farmers to appreciate market forces in price determination and urged them to control their cost by improving overall productivity on the land rather than focusing only on the producer price.

The Government has always warned against side marketing and in June the the Grain Marketing Board (GMB) was directed to operationalise Statutory Instrument 149/19 to prevent side marketing of grain following low deliveries since the start of the marketing season on April 1.

Grain Marketing Board (GMB)

The development came on the backdrop of just 5 000 tons being delivered to the national silos against 30 000 that had been harvested by farmers.

In a memorandum to GMB chief executive officer Mr Rockie Mudenha dated May 24, the permanent secretary in the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development, Dr John Basera, said the Government was concerned with the low deliveries at a time the country was targeting 1,8 million tons during the current marketing season.

“You are therefore, required to operationalise the provisions of SI 149/19 in order to prevent and avert the side marketing of grain with immediate effect,” he said.-chronicleolzw