Small grain millers petition government over payment terms

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Harare (New Ziana) – Small to medium grain millers have petitioned the government to relax payment terms for monthly grain allocations from the Grain Marketing Board (GMB).

This is contained in a May 11 letter by Small to Medium Millers Association of Zimbabwe chairman Davis Muhambi to the Ministries of Lands, Agriculture, Fisheries, Water and Rural Resettlement, Finance and Economic Development and Industry and Commerce and the GMB.

At the moment the GMB demands payment within the first seven days of receiving an allocation.

The small millers want the government to allow them to make weekly payments for their monthly grain allocations.

Muhambi said the GMB was availing at least 40 000 tonnes of grain per month to both small and big millers at $32 000 per ton.

“Prior to the harvest we used to get weekly allocations (of grain) and then you were required to make your payment within that week and at the end of the week you do your returns and apply for more (grain), but because of the (good) harvest and the demand for money so that farmers get paid on time, government has said that millers be given a monthly allocation which they should pay for within the first seven days (of receiving their allocation) and that poses a challenge for SME millers because we do not have that sort of money,” he said.
“We not only need to finance the maize (purchase), we also need to finance the packaging and we also need to finance the market because in a harvest year there is plenty of maize to go around and demand for maize meal is a little bit subdued so it becomes a biased market in the mealie-meal market.

“Retailers and wholesalers are spoilt for choice because there is maize-meal everywhere so they then demand terms and those terms in a harvest year are much longer than in a drought year. Given that scenario, it would mean that we would have to fund the maize, a month in advance and when we get that maize we need to also fund the market because they would demand 14-21 day terms for payment that becomes a very impossible situation for SME millers.”

In addition to relaxed payment terms, millers were also proposing that those members who consumed their allocations before the month ends be allowed to apply for more maize, upon providing verified returns, he said.

Muhambi urged the government not to implement a one size fits all approach as smaller millers lacked the financial muscle and capacity of their bigger and more established compatriots, who he said have the ability to even import their own grain.

“We feel that the big millers and members of Grain Millers Association of Zimbabwe should comply with the first seven-day payment period of every month in the national interest so as to cushion farmers from price fluctuations obtaining in the market. They have demonstrated their capacity to support global farmers through import programs –they should thus have no excuse for not supporting the local farmers and national cause,” he said.

New Ziana

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