Government reviews wheat producer prices

by | Sep 21, 2021 | Business | 0 comments

Amanda E. N Jojo

Government has reviewed the producer price of wheat, a development which will see wheat farmers getting ZW$55 517.69 per mt for ordinary grade wheat at a 15% return on investment, and ZW$66 621.22 per mt for premium grade wheat during the 2021 marketing season.

In a statement, Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa revealed that the current national wheat stocks are at 70 000 metric tonnes, making Zimbabwe wheat self-sufficient for the first time since 2005.

She said the country is anticipating a volume of more than 300 000 metric tones of the cereal, against a national annual requirement of 360 000 metric tonnes.

“Following extensive consultations with various stakeholders, including farmers’ unions, Cabinet has approved an upward review of the wheat floor producer price to ZW$55 517.69 per mt for ordinary grade wheat at a 15% return on investment, and ZW$66 621.22 per mt for premium grade wheat during the 2021 marketing season. This will enable farmers to go back into production.

“The upward review of the producer prices is being necessitated by changes in input prices which in turn resulted in higher production costs,” Mutsvangwa said.

Government noted that farmers expect viability in their operations, and are grappling with cost increases in Labour fertilizers and tractor and equipment.

“The input increases have a net effect of a 32% increase on the total variable cost per hectare. The net contribution of inputs to total wheat production costs in 2021 is as follows: labour, 3.19%; seed, 5.14%; fertilizers, 26.15%; chemicals, 3.20%; and operations, 12.37%. The biggest driver of costs is the cost of borrowing which stands at 40%,” Mutsvangwa said.

Government said it will avail the requisite funds to pay for deliveries and a viable producer price that will incentivise farmers to deliver their wheat crop to the Grain Marketing Board.

“The GMB has made adequate preparations for the 2021 wheat intake, the harvesting of the wheat is expected to commence this week, and should be completed by mid-November 2021,” she said.

Government reaffirmed that the current subsidy framework to millers will be maintained.

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