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February 12, 2012

Poor rain, access to inputs and finance may slow Zimbabwe agriculture recovery in 2012

The poor rains that have affected most of southern Africa in the 2011/12 cropping season have resulted in reduced farmland put under cultivation, lowering the expected yield of maize and other key crops. Chronic poor availability of fertilizer and other inputs have contributed to the problems, as well as weak farmer access to credit.

The government’s Agricultural Extension Services (Agritex) said Zimbabwe planted
247 000 hectares of maize from November to January, down from 379 993
hectares in the same period the year before because of late rains, according to the Zimbabwe Independent newspaper in late January.

Farmers planted 130 944 hectares of sorghum and other small grains, compared with 136 131 hectares, Agritex said. Cotton planting also decreased from last season. A total of 45 000 hectares were planted compared to 107 727 hectares last season. Farmers planted soybeans on 5,079 hectares compared to 13 674 hectares, and tobacco on 39 393 hectares compared to 43 545 hectares to last season.

Zimbabwe has both a number of fertilizer manufacturing companies and a well developed hybrid seed development and marketing system. However, a variety of operational difficulties over several years, including high power costs and power cuts, have prevented them from being able to fully utilize their installed production capacity. Fertilizer exports were suspended by the government in December 2011 to try and steer all production to the local market.

The government runs a coupon-based seed and fertilizer subsidy scheme through the State-owned Grain Marketing Board, but it has been plagued by late deliveries of the inputs to farmers. In early February a number of GMB officials were arrested for corruption in the distribution of the inputs. There has also been outrage that the subsidized inputs are first snapped up by the political elite before the poor farmers for whom they are intended have access to them. In any case, the US$45 million subsidy programme, targeted to benefit 500, 000 farmers, is a small proportion of farmers’ needs.

The GMB is in charge of buying maize, the country’s main staple crop, from farmers, but takes as long as six months to pay for deliveries, which severely hampers farmers’ operations and preparations for the following season. This has caused some maize farmers to shift to the currently more lucrative tobacco, an export crop sold at auction and for which farmers are paid on delivery. 

At the start of the 2011/2012 season, in October 2011, the GMB had reportedly paid farmers a total of $27 million for delivered maize from the 2012/11 season, but owed them $40 million more.

However, the up-front costs of farming tobacco are much higher than those of maize. The per hectare costs of maize is about US$1200, while tobacco costs are between $9500 and $10000 a hectare. Particularly where agricultural finance is so hard to come by, this presents a significant barrier to entry into large scale tobacco farming.   

The government mandated maize producer price is US$285 per tonne for 2012, a slight increase on 2011’s US$275 per metric tonne. The highest tobacco auction price in 2011 was about $2.75 per kg.

The tobacco marketing season for 2012 has just began (February), with Monica Chinamasa, chairwoman of the Tobacco Industry and Marketing Board saying the sector was ‘targeting 150 million kg.’ The total crop auctioned in 2011 was 132 million kg. Her estimate might not be realizable given the reduction in hectarage planted.

Finance minister Tendai Biti, in his budget presentation for 2012, said, “The financial requirements for adequate support to agriculture are large, translating to around US $2, 5 billion per annum for grain, cash crops as well as livestock production. Of this amount, grain requirements amount to US $702 million.” The total budget for agriculture in 2012 was US$227 million.

Zimbabwe’s agricultural production had been forecast to grow by 11 percent in 2012, compared to an expansion of seven percent in 2011. Key sectors in which increases are expected are tobacco, maize, cotton, soya beans and poultry. After decline in most sectors of agriculture from the year 2000 as a result of poorly planned land reform, steady improvements have been noted in several sectors since 2008.

How the actual yields will compare to earlier forecasts will only become clear towards the end of the current rain season, in April/May.

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