$50m bank loans too little: LMAC

THE Livestock and Meat Advisory Council (Lmac) has said the maximum bank lending limit of $50 million for each project is inadequate to finance cropping by major contracting companies for the new season due to escalating costs.

BY MTHANDAZO NYONI

In its latest update, Lmac said inflationary pressures, predominately driven by exchange rate depreciation, continue to characterise the operating environment and as such, farmers would find it difficult to put more hectarage under crops this season.

“The principal concern for the forthcoming season is the tight liquidity on the market. Farmers estimate that in local currency terms, the nominal amount required to cover a fixed hectarage is 13 times higher than that needed a year ago,” read part of the update.

“This will severely constrain producers as the maximum bank lending limit of $50 million for each project is inadequate to finance cropping by major contracting companies for the new season,” it said.

Lmac said estimated maize stocks were currently at 400 000 tonnes and to date, intake of maize by the Grain Marketing Board amounted to 150 000 tonnes, while monthly draw-down is between 100 000 to 120 000 tonnes.

Framers have already painted a gloomy picture for the upcoming 2019/20 agricultural season due to the high cost of inputs and electricity shortages, among other challenges, raising fears of yet another poor harvest next year.

They said their preparations were being curtailed because of the high cost of inputs.
The council also revealed that the supply of raw materials, both for human consumption and the manufacture of stockfeed was constrained.

“The maize situation is dire and users of maize have reported that the Grain Marketing Board has rationalised the drawdown and authorities have prioritised drought vulnerable communities, then milling companies and lastly, stockfeed manufacturers,” it said.

“The local supply of soya-bean is already exhausted. Reportedly, Zambia and Malawi have excess stocks of soya-beans available for export for around US$500/tonne, landed in Harare. Maize and wheat bran are not available and the price of molasses ex-factory has also increased.”

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