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By Joyce Mukucha
The government has approved an upward review of the wheat flour producer price to $55 517,69 per metric tonne for ordinary grade wheat at a 15 percent return on investment, and $66 621,22 per metric tonne for premium grade wheat for the 2021 marketing season.
Briefing the Cabinet as the Acting Chairperson of the Cabinet Committee on Food Security and Nutrition, this Tuesday, the Minister of Lands, Agriculture, Fisheries, Water and Rural Resettlement, Dr. Anxious Masuka said this will assist farmers to bounce back into production.
“Following extensive consultations with various stakeholders, including farmers unions, Cabinet has approved an upward review of the wheat floor producer price to ZW$55 517.69 per mt for ordinary grade wheat at a 15% return on investment, and ZW$66 621.22 per mt for premium grade wheat during the 2021 marketing season. This will enable farmers to go back into production,” Minister Masuka said.
He highlighted that following a successful wheat season, Zimbabwe is anticipating a volume of more than 300 000 metric tonnes of the cereal, against a national annual requirement of 360 000 metric tonnes.
“This is on the backdrop of the current national wheat stocks which stand at 70 000 metric tonnes, making Zimbabwe wheat self-sufficient for the first time since 2005.
“The upward review of the producer prices is being necessitated by changes in input prices which in turn resulted in higher production costs.”
Farmers, the minister said, expect viability in their operations, and are grappling with cost increases in Labour (51%); fertilizers, both Compound D and Ammonium Nitrate (27%); and tractor and equipment (144%).
“The input increases have a net effect of a 32% increase on the total variable cost per hectare. The net contribution of inputs to total wheat production costs in 2021 is as follows:
Labour, 3.19%; seed, 5.14%; fertilizers, 26.15%; chemicals, 3.20%; and operations, 12.37%. The biggest driver of costs is the cost of borrowing which stands at 40%.
“A viable producer price will incentivize farmers to deliver their wheat crop to the Grain Marketing Board. The GMB has made adequate preparations for the 2021 wheat intake.”
He added that Government will avail the requisite funds to pay for deliveries.
The harvesting of the wheat is expected to commence this week and should be completed by mid-November 2021.
The nation was also informed that the current subsidy framework to millers will be maintained.