HomeBusinessGMAZ withhold $25 mln for contract farming

GMAZ withhold $25 mln for contract farming

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GRAIN Millers Association of Zimbabwe (GMAZ) members are holding back $25 million they pledged to finance contract farming awaiting government to first come up with clear policies regulating the scheme, an official has said.

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GMAZ president Tafadzwa Musarara told Southern Eye Business in an interview that member companies had in 2012 committed $25 million to finance maize and other grain contract farming but have withheld their funds after farmers failed to meet demands of the contracts largely due to unclear policies governing the scheme.

Musarara said the Statutory Instrument (SI) 140 0f 2013, Agricultural Marketing Authority (Grain, Oilseed and Products) Regulations, regulating contract farming had loopholes which has seen farmers continuing with side marketing leaving millers who will have financed the scheme counting loses.

“Millers from 2010 had committed to financing contract farming but we had our hands burnt after farmers failed to pay up as per arrangement,” he said.

“The SI instrument regulating contract farming is too lenient to farmers and as such millers are now holding back they money because there are not benefiting from the arrangement.”

The government recently announced that it would be banning importation of grain and called on millers to finance contract farming to support local production and reduce the ballooning import bill which last year reached $8.3 billion last year compared to $7.6 billion in 2012.

Musarara however said a total ban of maize imports will push millers out of business considering the dysfunctional agriculture sector in the country.

He told said that millers were never consulted regarding the move to ban maize imports. He accused the government of arm twisting them into financing contract farming without first closing the loophole disadvantaging players.

Musarara added that government should first ensure that there is adequate maize in stock in the country before enforcing the ban.

“We need at least 100 000 metric tonnes of maize is storage before government can ban the importation of maize and without that we are out of business,” said Musarara.

GMAZ recently announced that 27 companies have suspended operations in Matabeleland provinces in the past fortnight due to a shortage of grain in the region after government capped maize imports at 2 000 metric tonnes per month.

However Agriculture Mechanisation and Irrigation Development deputy ministry David Murapira said the cap has been temporary suspended but added that government was finalising a structure to completely ban the importation of maize.

He said his ministry was finalising a statutory instrument that will enforce contract farming and the ban on the importation of maize.

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