ZIMBABWE Stock Exchange-listed agricultural concern Aico Africa Limited has suspended contracting soya bean farmers after the company lost more than $1 million through side marketing, a company official has said.
In an interview with NewsDay Business, Aico Africa Limited chief executive officer Patrick Devenish said the company was now buying soya beans directly from traders as it was less risky than contract farming.
“We have not contracted any soya bean farmers this year. Two years ago, we did a big contract production scheme and lost a large amount of money because people took our inputs and didn’t deliver the soya beans,” Devenish said.
He said soya bean output has over the last years been on a downward spiral due to a myriad of problems besetting agriculture.
The cash crop is a critical raw material in the production of cooking oil, soaps and opaque beer.
Devenish said one of Aico’s subsidiaries, Olivine, requires up to 90 000 tonnes of soya beans per annum, while the country last year produced 70 000 tonnes of soya beans.
He said Olivine, which requires $20 million to recapitalise, is faced with working capital constraints, aged and inefficient equipment.
“Olivine is not exporting very much as we are unable to service the local market,” he said.
He added that to revive the agriculture sector in Zimbabwe, the country requires a firm plan which will be supported by a well thought-out government plan.
“We have this terrible thing called side marketing and side marketing is a cancer because what it does is it disencourages people to contract farm.
“I think we need to strengthen our legislation to ensure that every one who participates in the industry, be it cotton, maize or tobacco, is contributing to that industry in terms of providing inputs for farmers and giving a fair reward to farmers,” Devenish said.
Turning to the cotton industry, Devenish said the sector has also been affected by liquidity constraints besetting the economy.
“All players must contribute equally to the production of cotton and if that happens, we feel there is a huge future for cotton,” he said.