Harare (New Ziana)-Government on Tuesday announced a new producer price of wheat of ZW$55 517.69 per tonne of the ordinary crop to cushion farmers from inflation.
In a post Cabinet briefing, Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa said the reviewed prices will enable farmers to go back to production next season.
“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 percent 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,” she said.
She said the biggest contributor to production costs is credit, which accounts for 40 percent.
“Farmers expect viability in their operations, and are grappling with cost increases in Labour (51 percent); fertilizers, both Compound D and Ammonium Nitrate (27 percent); and tractor and equipment (144 percent). The input increases have a net effect of a 32 percent 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 percent; seed, 5.14 percent; fertilizers, 26.15 percent chemicals, 3.20 percent; and operations, 12.37 percent. The biggest driver of costs is the cost of borrowing which stands at 40 percent,” she said.
Mutsvangwa said Zimbabwe expects to have enough wheat in the country to meet its needs, for the first time since 2005.
The country forecasts wheat harvests of over 300 000 tonnes in the current harvest.
Over 66 000 hectares were put to wheat this year, the third highest hectarage since Independence.
“The nation is being informed that following a successful wheat season, Zimbabwe is anticipating a volume of more than 300 000 metric tonnes of the cereal, against a national annual requirement of 360 000 metric tonnes,” she said.
She added: “This is on the backdrop of the current national wheat stocks which stand at 70 000 metric tonnes, making Zimbabwe wheat self-sufficient for the first time since 2005.”
The country will however still need to import some of its wheat.
“We will still import some wheat, but this time only for blending,” according to one miller. “We also need to import ingredients such as packaging, fats, enzymes, gluten, calcium and premixes,” said Mutsvangwa.