Africa News Bulletin

Zimbabwe: USD Payments for Wheat Farmers

Wheat producer prices for the 2022 marketing season have been set at US$620 per tonne for the ordinary grade, while the premium grade will fetch US$682 per tonne as the Government moves to preserve value for farmers.

In April, a pre-planting producer price of $175 741,86 per tonne of ordinary grade wheat and $193 316 per tonne for the premium grade, had been approved by Cabinet.

Addressing journalists in Harare yesterday, Lands, Agriculture, Fisheries, Water and Rural Resettlement Minister, Dr Anxious Masuka, said to align payment of wheat farmers to the obtaining summer crops payment modalities, and to preserve value for farmers, payment will be in US dollars and using a ratio of 33:67.

“The wheat floor producer price is US$620 per tonne for ordinary grade wheat, which gives the farmer a 15 percent return on investment and the floor producer price is US$682 per tonne for premium grade wheat.

“Farmers will be paid US$200 plus $243 680 for ordinary grade wheat and US$220 plus $268 048 for premium grade wheat,” he said.

Dr Masuka said contractors were free to buy on more favourable terms and they should buy wheat from their contracted farmers directly.

“For Government guaranteed schemes (AFC and CBZ), the wheat will be paid for by AFC or CBZ and should be delivered to GMB where a warehouse receipt will be issued. However, handling costs will be paid by the banks,” he said.

This year, self-financed farmers are regarded as contractors for the 2022 wheat marketing season and the Government will continue to purchase wheat, including from contractors.

To cushion farmers, Dr Masuka said the mandatory liquidation on local nostro transfers and taxes on nostro payments for farmers would be suspended.

“To preserve value for farmers, a suspension of the 20 percent compulsory liquidation on local nostro transfers for wheat farmers will be introduced for the marketing season for both Government and contract-purchased wheat and the 2 percent IMTT tax on nostro payments will be suspended for wheat farmers for the 2022 season.”

Farmers have welcomed the new wheat floor price, saying that it showed that the Second Republic values farmers’ contribution to national development.

Zimbabwe Commercial Farmers Union (ZCFU) president, Dr Shadreck Makombe, said the Government had taken the right decision.

“We are very grateful as farmers, the move made by the Government is welcome and it shows that they are aware of our needs,” he said.

“This also shows that we are in the right direction provided that all other things are constant and stabilising.”

A wheat farmer, Mr Silas Mumbemi, said: “As farmers we are very happy, it is a big win especially for us who benefited from the Presidential Inputs Scheme and we are very much excited about the US dollar component.”

Zimbabwe Farmers Union (ZFU) secretary general Mr Paul Zakariya welcomed the 33 percent US dollar component offered, but would have preferred at least 50 percent.

“We welcome the Government’s move, it has at least understood that the purchase of all supplies are in US dollars. However, the ratio seems to be very low, we are appealing to the Government to raise the USD component to at least 50 percent and the price should also track the current official rate,” Mr Zakariya said.

Wheat plays an integral role in the Zimbabwean economy as the second most important strategic food security crop after maize and traditional grains.

The estimated monthly wheat requirement stands at 30 000 tonnes translating to about 360 000 tonnes of the annual requirement for self-sufficiency of soft wheat.

In 2022, the wheat target was to plant 75 000ha to produce 380 000 tonnes.

However, 80 867ha were planted, with an estimated harvest of between 375 000 tonnes and 386 813 tonnes.

The attainment of soft wheat self-sufficiency is premised on Government’s agricultural transformation anchored on active private and public sector participation.

The private sector should finance 40 percent of their annual raw material requirements in line with Government policy.

The Government is pleased that the private sector met the target for wheat.


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