The country is gearing for the 2022/2023 agricultural season. Harvesting of the 2022 winter wheat crop has also commenced for the early crop. It is all hands on the deck to ensure yet another successful agricultural season.
Calls have been made by various stakeholders for clarity on the marketing of grains and other oil seed products. The purpose of this article is to provide a clear and concise guide on the marketing of grains in Zimbabwe to enable farmers, contractors and other stakeholders to make informed decisions.
Basically, grains are crops such as maize, traditional grains (finger millet, rapoko, sorghum, among others), wheat, barley including other oils seeds such as sunflower and soya beans. It is important to note that maize, soya beans, wheat and barley and are controlled products in terms of the Grain Marketing (Control of Sale of Maize) Regulations, 2019 (Statutory Instrument 145 of 2019), the Grain Marketing (Control of Sale of Soya Beans) Regulations, 2021 (Statutory Instrument 97 of 2021) and the Grain Marketing (Control of Sale of Wheat and Barley) Regulations, 2021 (Statutory Instrument 188 of 2021) respectively. The effect of these regulations is that certain restrictions apply on the marketing of the crops.
Essentially movement permits are required to move these crops from one point to the other and there are also sale restrictions depending on the scheme of production.
Financing of production
The marketing of grains is based on the production scheme. The government’s thrust is for heightened private players’ participation in the production of agricultural products and in particular grains.
The current policy is that industrial players should finance at least 30% of their raw material requirements. As an example, companies such as National Foods or Delta Beverages which are into manufacturing must ensure that they support the production of the necessary raw materials through contract farming arrangements.
There are basically four forms of financing arrangements for grains production in Zimbabwe namely contract farming by private contractors, Government supported programme – Pfumvudza/Intwasa, National Enhanced Agricultural Productivity Scheme (NEAPS) (formerly known as Command Agriculture) and self-financed farmers.
In contract farming, private contractors enter into volume-based contracts with farmers whereby inputs and the necessary extension services are supplied to the farmer. In return, the contractor will recover the investment from the yield.
The Pfumvudza/Intwasa scheme is a climate proof initiative supported by Government. The NEAPS is mainly administered by CBZ Agro-Yield and the AFC Land and Development Bank. Self-financed farmers are those farmers who finances their own production from free funds. Self-financed farmers are now categorized as contractors for marketing purposes and must thus register with the Agricultural Marketing Authority (AMA) as such.
Marketing of grains
Marketing of the grains produced under the above-provided production schemes differ. All farmers who produce under the Pfumvudza/Intwasa scheme and NEAPS must deliver their produce to the Grain Marketing Board (GMB). Contracted farmers must deliver to the respective contractors in accordance with the terms and conditions agreed in the contract farming agreement.
For movement purposes, contractors must obtain grain movement permits from GMB. Self-financed farmers are allowed to market their produce freely, but must also obtain movement permits from the GMB.
As a measure to curb side-marketing, self-financed famers are required to be cleared by Agritex and the Agricultural Marketing Authority to check on other obligations either to government or private contractors as the case maybe, before movement permits are issued.
In terms of pricing, government announces prices for the grains that are delivered to the GMB. The pricing is on a cost-plus basis whereby the cost of production is taken into account and a margin is added. In private contract arrangements, parties agree on an offtake pricing applicable depending on certain variables such as type of crop, support level among others.
For this winter wheat season, a sleek movement permit system has been put in place. Contractors shall be issued with bulk permits by GMB based on yield or output from the registered data. The bulk permits are dispatched to various GMB depots where goods dispatch vouchers are issued to individual trucks transporting the wheat.
The Agricultural Marketing Authority is calling upon all contractors and self-financed farmers to register before commencement of the 2022/23 farming season. Registration is done online at www.ama.co.zw.
This article was written by Peter Mudzimiri, AMA Head of Compliance and Corporate Secretary.
Word from the market is a column produced by the Agricultural Marketing Authority (AMA) to promote market driven production of agricultural crops. Feedback email@example.com or WhatsApp +263781706212.