Home » Industry » A Disaster in the Making [editorial]

ELSWHERE in the current edition of Financial Gazette, we carry the story about Zimbabwe’s dwindling wheat production figures, which will this year hit an all-time low of about 10 000 tonnes. This is sad for a country grappling with a liquidity crunch and which desperately needs to ramp up output in all its agricultural sectors to either earn foreign currency or to keep the little cash already in the economy by ensuring the country does not import what it can produce.

But the sombre reality is that Zimbabwe’s situation appears to be getting worse, and government and its bureaucrats appear not to give a damn. Since dollarisation of the economy in 2009, wheat farmers have had to contend with a plethora of challenges, among them high production costs, cheaper imports, difficulties in accessing funding, ageing irrigation infrastructure and ballooning electricity overheads.

Without meaningful support from government, which has done nominally little to bail out this important farming sector, a number of wheat farmers have retreated from the crop, and have begun focusing on other crops like tobacco. Principally, the problem has been that government and its institutions that are meant to support these farmers have failed to respond to the call of duty to ensure success by its hard-working wheat farmers.

In the past years, many farmers have seen their crops wilt in the fields, unable to irrigate because of electricity supply interruptions. Add to this the fact that many were bankrupted by government, which failed to fund the Grain Marketing Board, consequently resulting in its failure to pay wheat, as well as maize, farmers for crops that had been delivered in 2008 up until 2012.

For farmers who break their back to ensure the nation is fed, that is certainly heart-breaking. But the country will now have to contend with a huge import bill for wheat to ensure it meets the shortfall for the national requirement of 450 000 tonnes of wheat. That amounts to a staggering US$220 000 million at the ruling international wheat price of US$500 per tonne.

There will be additional costs related to logistics. That’s a bill Zimbabwe could have avoided, money the country could have kept in the economy but which is now being exported to other economies, draining liquidity in an already strapped market. This reflects badly on our planning it shows we are either not planning at all or that we are poor planners.

The government’s own economic blueprint stipulates an ambitious plan to ensure that Zimbabwe becomes food self-sufficient, producing surplus for export to earn foreign currency and increase the stock of money in the economy. Wheat production, according to the Zim-Asset document, was expected to reach 200 000 tonnes this year. Compare that with 10 000 tonnes. This is a disaster!

Source : Financial Gazette