HomeNewsLoan, subsidy, power woes hit wheat hopes

Loan, subsidy, power woes hit wheat hopes

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Credit shortages, subsidy hiccups and high energy costs have dashed hopes of a rebound in wheat production in Zimbabwe, leaving a country once known as the breadbasket of Southern Africa facing another year of record imports.

Zimbabwe’s farmers will produce 20 000 tonnes of wheat in 2012-2013, well below the 75 000 tonnes that the government initially targeted, and historic harvest levels, US Department of Agriculture (USDA) officials said.

“Wheat production is on a declining trend since 2001, when Zimbabwe produced more than 300 000 tonnes,” the USDA’s South Africa bureau said in a report.

“A number of constraints, such as unreliable power supplies for irrigating the crop, dilapidated irrigation infrastructure, and late payments by the (State-run) Grain Marketing Board, have contributed to the declining trend in wheat production,” the briefing said.

Thanks to “erratic rainfall”, the harvest of corn, the source of the food staple mealie meal, looks set to decline too, by more than one-third to 900 000 tonnes.

Zimbabwe’s wheat production should be more resilient — against weather upsets, at least — as the crop is typically planted under irrigation, in the April-to-May period,

However, the sowings window “passed with very little wheat-planting activity” after fertiliser companies failed to release nutrients targets by a government-backed $20m support programme.

This was “due to the government’s failure to settle a $50m debt dating back several seasons”, the USDA said, adding the State also owes money to “the majority of” farmers for wheat deliveries made in October.

As a further financial setback to farmers, loans for inputs are only on offer for up to 90 days, “mainly due to the unavailability of credit because of Zimbabwe’s high country risk”, while farmers report paying interest rates of 30% a year on loans.

The country’s economic situation has in fact, significantly improved since the administration of President Robert Mugabe began power sharing with the opposition Movement for Democratic Change was implemented three years ago.

Inflation, which hit 500 trillion% in 2008, has fallen to less than 5%, and the economy expanded by more than 7% a year.

Even growers who did get wheat into the ground, have faced high costs of irrigating it, estimated at $700-800 per hectare, on top of charges of $350-500 for inputs and labour, according to the Zimbabwe Farmers’ Union.

For output to be viable requires electricity prices of about $0,03 per kilowatt hour, rather than the $0,14 per kilowatt hour farmers are charged, the union said.

The USDA officials estimate Zimbabwe’s wheat imports reaching a record 250 000 tonnes in 2012-2013 for a fourth successive season.
In the October-to-April period, Russia was the biggest exporter to Zimbabwe, with 25 722 tonnes, with Argentina another major supplier.

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