MARKET researchers, Morgan & Co, have predicted that the government will slow down on its drive to distribute agricultural inputs to farmers because the ruling Zanu PF party is no longer in a campaign mode.
Zimbabwe held harmonised elections on August 23 and 24 and President Emmerson Mnangagwa was declared winner of the polls with 52.6% of the votes against Citizens Coalition for Change leader Nelson Chamisa’s 44%.
In its new 2023-24 Food and Agriculture Sector Report, Morgan & Co predicts the summer cropping season will be heavily impacted by drought that has been attributed to the El Nino phenomenon and electricity shortages.
“El Nino is anticipated to result in below-normal rainfall in southern Africa between November and April,” Morgan&Co said.
“Zimbabwe in particular will likely face drought and heat waves in November and December 2023, which coincides with the sowing period of maize, tobacco, millet, and sorghum.
“Farmers with irrigation infrastructure could be affected indirectly through limited supply of electricity.
“The phenomenon also causes a surge in pests and diseases, and this further worsens the sector’s odds in the 2023/24 season.”
It said past trends show that government reduces its support to farmers after elections.
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“Electioneering activity typically results in increased disbursements of agriculture inputs in the season preceding the election year,” the report said.
“These disbursements often decline after elections, resulting in slower growth in the agriculture sector.
“Latest reports reveal that the government has set aside more than US$600 million for the 2023/24 farming season.
“In addition to the annual budgetary considerations afforded to the sector, the government recently partnered with the International Finance Corporation to develop the agriculture insurance index based on insurance framework for smallholder farmers.”
However, the market researcher noted that the uptake of such a product has been low among small scale farmers in Africa.
“For example, Ghana — a country that employs 65% of its labour force in the agriculture sector — set up the Ghana Agriculture Insurance Pool (GAIP) in 2011 to cover its five million farmers from natural disasters,” Morgan&Co said.
“However, since inception, GAIP has insured less than 35,000 farmers because of affordability issues.”
The report cited central bank statistics that show that the agriculture sector is the largest recipient of the private sector’s loans, accounting for 20% to 35% of the banking sector’s loan book.
Banks have committed $68 billion and US$160 million to complement government efforts in financing the agriculture sector.
“These loans, however, have slowed down because of a tight hold in ZWL money supply by the central bank and calculated USO lending by banks,” Morgan & Co said.
“While payment modalities to farmers have improved since the 2019/20 season, much to the benefit of local farmers, such payments still lag.
“Previous arrangements entailed the Grain Marketing Board paying farmers a static local currency price, which significantly handicapped farmers’ ability to prepare for the following season.
“These modalities changed in the 2022/23 season and farmers began receiving 30% of their dues in US dollars and the remainder in local currency at a static price.
“Currently, US dollar payments account for as much as 75% of total dues while the remainder is paid in local currency, but at a price that is pegged to the official exchange rate. Delays in payments, however, remain a key problem.”
Lands, Agriculture, Fisheries, Water and Rural Development minister Anxious Masuka is on record promising to support farmers with irrigation systems to ensure that they deliver on grain and livestock production.
