COMMODITY trade experts are calling for stronger partnerships between governments and smallholder farmers to implement supportive policies for exchanges focused on agricultural goods.
This emerged during a panel discussion at last week’s African Continental Free Trade Area (AfCFTA) Association of Commodity Exchanges (A-ACX) Annual Conference held in Victoria Falls.
The A-ACX, established under the Guided Trade Initiative of the African Continental Free Trade Area, comprises 16 national and regional exchanges.
It aims to play a pivotal role in enhancing the commodity trade ecosystem, contribute to the advancement of regional trade, economic growth, sustainable development, and stimulate investment in Africa's agricultural and natural resources sectors.
According to the A-ACX’s website, the objectives of the association are multifaceted, with a focus on piloting cross-border trade mechanisms between different African markets, exploring exchange-intermediated pan-African supply and procurement strategies.
This also includes facilitating regional price discovery, creating pan-African markets, establishing efficient single-window trade gateways, and advocating for policy and legal reforms to unlock rapid intra-Africa trade growth through commodity exchanges.
“We have seen how the government policies have capacitated the smallholder farmers and our extension farmers so that they are able to reach out to all points of farmers,” said Clemence Bwenje, business development markets and trade chief director in the Lands, Agriculture, Fisheries, Water, and Rural Development ministry.
“And these government policies also incentivise participation of smallholder farmers in the market.”
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Bwenje said government policies created and facilitated smallholder markets and that the government had a role to play in making sure these smallholder farmers were exempt from taxes.
He highlighted the government’s current initiatives in making sure that support was available to smallholder farmers and traders to boost production.
“We will be beginning now to see farmers also getting information through the commodity exchanges,” Bwenje added.
Food Crop Contractors Association chairperson Graeme Murdoc said an opportunity for the two sides to find each other needed to be created.
“There is a huge amount of distrust between the public and private sector, particularly in Africa, primarily because of historical issues,” Murdoc said.
“And, it was mentioned yesterday that we have the opportunity on a weekly basis to interact with our minister of Agriculture (Anxious Masuka).
He said that opportunity and exchange of information had trickled down, resulting in substantial private sector involvement in a number of the subcommittees that involved agricultural production and marketing across Zimbabwe.
Uganda Commodity Exchange representative Deborah Kyarasiime said leveraging technological innovation was key in the commodity exchanges and urged governments and the private sector to make these technologies accessible.
Masuka said well-functioning and coordinated commodity markets played a critical role in fostering trade, ensuring economic stability, and enhancing prosperity across Africa.
“To date I have gazetted 48 commodities for eligibility for trade on the warehouse receipt system that anchors the ZMX’s (Zimbabwe Mercantile Exchange) operations,” he said.
“These commodities range from maize, cotton to livestock, wheat, soya beans, red and white sorghum, sugar beans, white rice, and rice bran.”
Masuka said the ZMX had established a network of 33 warehouses providing 642 000 metric tonnes (MT) of storage space in seven of the country’s 10 provinces.
“Consequently, warehouse receipts totalling 437 000MT across nine commodities (maize, wheat, soya beans, red and white sorghum, ginned cotton seed, sugar beans, white rice, and rice bran) have been cumulatively issued by ZMX, which is now operating weekly auctions,” he said.
ZMX, launched on October 18, 2021, operates an electronic warehouse receipt system (WRS) and a commodity trading platform for the trading and financing of agricultural commodities.
The WRS enables commodity holders like farmers to deposit their commodity with a designated warehouse in exchange for a receipt, a negotiable instrument that can be used as collateral for credit facilities or for spot trading.
ZMX is operated by the Financial Securities Exchange and was founded as a joint venture between it, TSL Limited, CBZ representing the private sector and the government.
