‘Millers are fully behind Command Agriculture’

Command Agriculture is a Government initiative whose objective is to ensure the country attains food security. The Herald’s Christopher Charamba (CC) spoke to the Grain Millers’ Association of Zimbabwe president Tafadzwa Musarara (TM) to discuss how mille

CC: The Government has set out the Command Agriculture programme. What are your thoughts as grain millers on this initiative?

TM: Well, this is a very important programme, which has been done in other parts of the world, notably Russia. As a result, it is now ranked among the top three in the world, in terms of wheat production, and top 10 in the world in terms of maize production.

As industry, we welcome any initiative that will provide raw materials for our factories and our raw material is maize. We have been importing and, this is the best way of substituting the imports. So, we will fall and stand by Command Agriculture.

We also feel that as agro-processers, we have managed to get sufficient support from Government, which provides us with total control of our local markets.

We need that.

It’s a matter of time that these policies are executed and we have the local markets to ourselves so that whatever we are going to buy from Command Agriculture, we will process and find a market. To date, we have committed to buy 800 000 tonnes of maize from Command Agriculture.

CC: So, not all maize is going to

GMB?

TM: Well, all maize is going to GMB and we will buy from there. GMB has a wide geographical spread and will serve as a collection entity that will collect and store, and we will buy from those silos.

CC: What about side markets? How are you as millers going to avoid the creation of side markets particularly in relation to produce from Command Agriculture? What will happen in the event that a farmer has maize and a miller has cash on hand and is willing to buy directly?

TM: We are going to co-operate with what Government is going to advise and direct. We want to work with the Government on that. I also want to admit that side marketing has been a very big problem in maize, unlike in tobacco and other crops because there are fewer buyers of tobacco.

With maize, in a country of 14 million people, every Zimbabwean is a potential buyer. So, we will work with the Government to ensure that the maize buyers are registered, therefore they are directed on how and, from whom they should buy the maize.

CC: How many registered buyers are there currently, and what is the procedure for registration?

TM: You will appreciate that the right to buy is not exclusive to millers, anyone can buy. So it would be up to the Government to legislate proper laws that will regulate the buying of maize. But currently, we have about 32 operating millers and they have rights to buy maize.

CC: Is that something that is feasible in terms of creating legislation that regulates the buying of maize?

TM: Yes, it is feasible and it has to happen. You should understand that from a farmer’s perspective, they have been prejudiced. We have had people who go to the farmers with soap and cooking oil for barter trade and farmers have been short-changed in that regard.

Then these buyers will come to Government or to millers and sell at a higher price. What that has done is simply to have a middleman making more profit than the producer of maize. So, that anomaly, which the press has been reporting year-in and year-out, of farmers being prejudiced must be addressed and it has to be addressed by law.

CC: What are you as millers anticipating out of the Command Agriculture programme, particularly as you have seen it rolled out thus far?

TM: We have no interest whatsoever in importing grain. Grain importation is the second best alternative. What we want is to have maize, grown in Zimbabwe, enough to feed the country and also enough to make sure that we have a Strategic Grain Reserve that can feed the country for at least a three-year period.

If you look at a country like Syria, they are at war but you can see that the first two years of the war they were not importing because they were able to rely on their grain reserves. Those grain reserves are meant for any eventuality. It’s not that we wish for war, but anything can happen that could make the importation of maize difficult.

At the moment, the issue of Nostro accounts - us being unable to import because we can’t pay out - is another issue. So, if we had a two- or three-year cover, we would be able to spend two years with enough maize, while we work on the problem.

CC: What has the Grain Millers’ Association of Zimbabwe done to support the Command Agriculture programme?

TM: The initial stage that we have taken is to pledge our support to the chairman of the Cabinet Committee on Food Security and Nutrition. Secondly, we have committed to buy 800 000 tonnes of maize from the programme.

That commitment is bankable and assists Government to mobilise capital. It also encourages other financiers to join the programme because you know that the crop being funded has got a ready market.

CC: On the issue of importing that you mentioned, there are concerns that the price of the maize from Command Agriculture will be higher than imported maize. So essentially, it would be cheaper to import maize than obtain it on the local market. How are you as millers going to handle this dynamic?

TM: You should appreciate that anything in Zimbabwe which is not maize, has the same predicament. Anything produced in Zimbabwe will definitely cost more than importing the alternative. Whether you are talking of flour, of batteries or of steel, produce in Zimbabwe and the cost is higher than importing.

Secondly, you should appreciate the fact that some of these countries who export grain to us, they give rebates or export incentives to the entities and companies that will be exporting to us. Some rebates are as high as 30 percent. This is so that they get foreign currency.

Here in Zimbabwe, we have a 5 percent export incentive. So, imagine you are an exporter of maize, we are going to cost our maize 5 percent less because we are going to have 5 percent paid by the central bank.

This is not a Zimbabwean phenomenon. It’s the practice internationally that when a company is exporting, their own governments come up with incentives so that their grain lands in those foreign markets at a low price or a competitive price.

So, it’s something that we will work with, with the Government, on the issue of price. On the other hand, the farmer has to be paid.

Our fertiliser and inputs are probably the highest priced in the region. We don’t have a comparative advantage in terms of growing maize but we have to grow it.

Therefore as industry, we are also alive to the situation that producing maize in Zimbabwe is a high cost business and importing is low cost.

So, we just accept other subsidies or we simply close our borders on maize imports and we buy whatever is there on the local market.

CC: What can be done to create a comparative advantage in the country?

TM: The key thing is that we need to improve our yields. Our yields 10 years ago were two tonnes per hectare; now they are 800 kg per hectare, national average. So, God knows what the yield will be at that rate in 10 years’ time.

Roughly it will cost about $1 400 to produce maize per hectare. Now, if you produce 10 tonnes from that same hectare, the cost per tonne will be $140. If you do five tonnes, it will be double that.

So what we need now, and what Command Agriculture must do is to focus on yield per hectare so that we address the low yields

that we have, and also make sure that we have inputs on time, and that farmers adhere to the minimum crop husbandry practice and standards.

CC: Different millers also contract farmers on their own, what is the criteria for farmers to get contracted by the millers?

TM: One has to have the farm, with all the requisite papers, either title deeds, offer letter or the 99-year lease. Secondly, we have been prioritising those with water bodies. Then, of course, the third requirement is that they should have knowledge and experience in growing maize.

You know, we have people who got land five or 10 years ago, and they haven’t grown any maize and surely they will find it difficult to come to us so that they can be listed. And, of course, the farmers must have a record of them settling and honouring their obligations.

CC: What is the Grain Millers’ Association doing to support grassroot farmers, those who were resettled on A1 farms, small-scale and communal farmers, and how are you contributing to bridging the gap between subsistence and commercial farming?

TM: We are working with the Government to ensure that certain farming districts in this country are declared export processing zones or some similar facility.

Basically, a situation whereby whoever puts investment in that area, be it investment of inputs, irrigation equipment, road rehabilitation, dam repair or any other related work should get incentives.

That incentive regime will enable us to attract investment into maize farming. This is going on, and I am very confident that in 2017, Cabinet will come up with a position on that.

TAFADZWA MUSARARA . . . “What we want is to have maize, grown in Zimbabwe, enough to feed the country and also enough to make sure that we have a Strategic Grain Reserve that can feed the country for at least a three-year period.”