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September 30, 2010

Zimbabwe's fertilizer industry attempts to meet seasonal requirements

by Walter Muchinguri

Zmbabwe's fertiliser industry has mobilised US$50 million this year as it aims to produce 300 000 tonnes of fertiliser before the end of the year to meet farmers’ requirements for the 2010-2011 agricultural season.

Chemplex Corporation Limited chief executive and spokesperson for the industry, Mr Misheck Kachere told stakeholders, who included presidents of farmer organisation, at a meeting recently that of the 300 000 tonnes, 100 000 tonnes was already available. He said an additional 100 000 tonnes was already being produced while the remaining 100 000 would be available before year-end. Mr Kachere said they were currently producing 20 000 tonnes of fertiliser per month

Fertiliser had, over the past few years, emerged as one of the most difficult inputs to access largely due to low production levels. This had affects yields and hence the overall production figures.

Mr Kachere said presently major challenge has been the uptake of available stock due to liquidity challenges on the market.

"For instance last month we only sold 3 000 tonnes against 20 000 tonnes that we produced. We are finding it difficult to continue as the banks from which we borrowed the US$50 million are already on our throat," he said. He added that as an industry they were willing to accept a situation where Government pays for at least 30 percent of the cost of the fertiliser it requires with the balance being settled at a later date. This way the industry can continue producing while at the same time off-setting some of the debt but we prefer a situation where the facility is done through a financial institution," he said.

Mr Kachere said that the 300 000 tonnes were sufficient to cover the requirement for the season.

"This has been proven by an assessment that we have done which has taken into account the constraints that farmers are facing such as finance and capacity," he said.

Speaking at the same occasion Zimbabwe Commercial Farmer’s Union president Mr Wilson Nyabonda said the appetite for fertiliser was huge within the farming community although there was need for farmers and the fertiliser industry to co-operate. He concurred that farmers were failing to buy the fertiliser due to liquidity challenges.

"For the 2010-2011 agricultural season there is no donor support save for the money set aside for 400 000ha for small-scale farmers. How is the commercial agriculture sector supposed to finance itself? The Minister of Finance has in the past talked about a number of credit lines being made available by the likes of African Development Bank, we need clarity on where those lines of credit are," he said.

He added that there should be clarity on the fertiliser requirements for each season and for such information to be communicated to the fertiliser industry. At the same time he said there was need for complete disclosure on the role that the industry should play and if need be on what Government would need import to augment local production. "Lets not play hide and seek with each other because we are one family," he said.

Mr Nyabonda underscored the need for Government to come up with realistic estimates for crop production each year, which do not solicit undue expectations. He cited an example where a target of four million hectares of maize was proposed during a meeting he attended, which he said was unrealistic.

"For us to produce this we require 1 million tonnes each of compound D and ammonium nitrate which will be impossible to mobilise even if we are to import.

Commenting on the same issue, ZFC managing director, Dr Richard Dafana said estimates should not just focus on requirements alone but should also factor in how farmers are going to finance their requirements.
Zimbabwe National Farmers Union president, Mrs Monica Chinamasa said farmers, particularly her membership which comprise of resettled farmers, needed Government support to access inputs as they were reeling from the effects of sanctions. She said while other farmer’s unions such as the ZCFU, ZFU and CFU enjoyed support from multilateral organisations, these have shunned her organisation as it is made up of resettled farmers.

"Resettled farmers are prepared to work, we have produced maize and delivered to the GMB but we have not been paid. We have produced tobacco, which has brought in fresh capital to the tune of US$300 million and we believe government needs to help us get the inputs that we require because it has benefited from proceeds from agriculture," she said.

The Herald

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