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ZIMBABWE: No winds of change at the Grain Marketing Board

01 Jul 2009 20:22:45 GMT
Source: IRIN

Background

• Zimbabwe crisis

• Food and hunger

• Zimbabwe hunger

HARARE, 1 July 2009 (IRIN) - The Zimbabwean government has announced new measures to boost local cereal purchases through its crisis-ridden Grain Marketing Board (GMB), but farmers are not convinced the plan will work.

In early June the finance ministry said it had secured US$100 million for a revolving fund to support the GMB's procurement of rain through its countrywide depots.

The board had a long-standing monopoly on cereal purchases until March 2009, when private traders were allowed into the market - a response to the GMB's inability pay decent prices to farmers, which fuelled a parallel market.

"The availability of resources to the GMB should facilitate timely payments to farmers for their maize deliveries," said the finance ministry, adding that farmers would, as a result, be shielded from "exploitation by unscrupulous buyers".

Good and bad news

A recent joint crop assessment report by the Food and Agriculture Organization (FAO) and the World Food Programme (WFP) described the liberalization of the grain market as a "very positive development" that would encourage farmers to produce commercially and improve grain reserves.

The GMB has announced a floor price for grain of US$265, while private buyers are offering between US$180 and US$200. But the crop assessment report noted that the move was "largely ineffective at the moment, due to GMB's inability to function with virtually no liquidity". Local farmers are adopting a wait-and-see approach.

Denford Chimbwanda, president of the Grain and Cereal Producers Association (GCPA), told IRIN the GMB needed a far larger financial injection. "The move by the finance ministry to give assistance to the GMB is noble, but it is difficult to see how it will help the country - that money will buy less than 400,000 tons of cereals, a far cry from what we need in grain reserves."

Zimbabwe requires about 1.7 million tons of cereals to adequately feed itself; this year, according to the FAO/WFP report, it harvested just 1.14 million tons, an increase of 130 percent from the previous disastrous season.

"As far as I know, the majority of our members and the subsistence farmers are not surrendering their produce to the GMB ... They are still not confident that the GMB will pay them adequately, and are still smarting from the failure by the parastatal to pay them in past years," said Chimbwanda.

No guarantees

Local television quoted a GMB spokesperson as saying on 30 June that the grain board would only be able to pay cash for the first 40 tons a farmer delivered. "That does not sound as though much has changed," said Chimbwanda.

"There is no guarantee of timely payments for the remainder, so that farmers can be well prepared for the summer farming season that starts in September." Better financing for the GMB was unlikely, he added, as the government was still battling to get funding from donors to run the country.

A coalition government of three rival political parties was formed earlier in 2009 to tackle Zimbabwe's political andhumanitarian crisis, but its efforts to convince the international community to come to the rescue with aid have had mixed results.

Chimbwanda said lack of confidence in the GMB would force farmers to sell to stock feed producers and dairy farmers, reducing the amount of cereals available to the public.

John Robertson, an economic consultant, told IRIN: "It is unclear why the GMB has decided to buy at US$265 when imports can be made at cheaper prices - this will force the grain utility to sell its products at unaffordable prices. In any case, I have spoken to a number of people in the milling industry and they ... favour importing rather than buying locally."

Robertson warned that the GMB might be tempted to use some of the money from government to bankroll its operations and offset its debts.

Initial forecasts by FAO/WFP estimate that about 2.8 million people will require food aid by March 2010, a substantial decrease from the 7 million beneficiaries during the March 2009 "lean season" - the month prior to the main harvest in April.

tt/oa/he

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