Zim grain marketing board in debt to producers

The Zimbabwe Grain Marketing Board (GMB) owed an estimated R660 million to wheat farmers amid fears that further delays may derail preparations for the forthcoming winter cropping season.

The Zimbabwe Mail reported that the payment delays were likely to be heightened by Zimbabwe’s recent introduction of a new currency, which has triggered a payment hold-up across markets.

The Zimbabwe Central Bank introduced its new currency early last month, with the Zimbabwe Gold (ZiG) notes and coins coming into circulation at the end of April. According to Bloomberg.com, the new unit was backed by bullion and foreign currency reserves held at the central bank. The ZiG was the country’s sixth attempt at establishing its own currency since 2008, when inflation crossed 500 billion percent, according to International Monetary Fund estimates.

According to the Zimbabwe Mail report, GMB was among many companies that were fine-tuning their payment systems as Zimbabwe migrates to the new currency. Last season, the government set the maize and traditional grains producer prices at R6 320/t, with a split payment of US$200 (about R3 800) in foreign currency plus R2 546,99 payable in the local unit at the prevailing interbank rate.

GMB CEO Edson Badarai added that the parastatal was working on ways to pay the farmers. “GMB has fully paid for delivered summer crops (maize and traditional grains). GMB urges farmers whose payments have not reflected in their bank accounts to approach any nearest depot and have their query resolved within seven days. However, GMB owes wheat farmers R660m and efforts are being made to clear balances,” he said.

According to Liam Philp, the Zimbabwe Commercial Farmers Union president, GMB was still owing farmers US$34 million (about R644 million).

“I cannot tell you exactly [how much is owed by GMB] but from my understanding, all our farmers who delivered wheat to GMB directly have received their ZWL payments, but USD payments are still outstanding.

“The total amount owed is R641,78 million and I cannot tell you how much of that is to our members,” said Philp.

GMB is currently paying R7 361,60/t of maize and traditional grains.