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GMB pays $67,8m to farmers

by Oliver Kazunga
30 Nov 2015 at 05:42hrs | Views
THE Grain Marketing Board (GMB) has cleared $67,8 million it owed to farmers for grain deliveries made between 2013 and this year. Announcing the 2016 national budget last week, Finance and Economic Development Minister Patrick Chinamasa said delays in paying farmers for grain deliveries to GMB have in the past constrained individual farmers' capacity to finance their future cropping activities.

Against this background, he said, the government was committed to expedite payment of farmers for their grain deliveries to GMB. "The government continues to prioritise payment for grain deliveries to the Grain Marketing Board also as a way of capacitating farmers. A total of $67.8 million has been paid between January and November 12 for grain deliveries, whilst a total of $11 million was availed to the GMB for handling and storage charges.

"The $67.8 million disbursed this year went towards the 2013/14 arrears of $44.9 million while the balance of $22.9 million cleared obligations related to this year's deliveries. "This effectively means that government has completely cleared all its arrears to farmers for the maize grain deliveries," he said.

Chinamasa said the government will strive to ensure that no arrears are incurred going forward. As at November 5, he said, fertiliser supply contracts amounting to 15,000 tonnes each for compound D and Ammonium Nitrate had been signed and deliveries were presently underway. This was in support of farmers' activities in the 2015/16 summer cropping season.

Chinamasa reiterated that the restoration of the stop order system was pivotal to enhancing the participation of the banking sector in funding of agriculture. "The framework, if managed well, provides the desired certainty of loan repayments, that way guaranteeing the sustainability of lending, much required by banks, depositors and borrowers."

Chinamasa said the Bankers Association of Zimbabwe was working on developing robust arrangements for the re-establishment of the stop order system for all agricultural crops.

"This will be in consultation with all relevant stakeholders, including the Reserve Bank, the Ministry responsible for Agriculture, and Treasury. "This should embrace marketing of a wider spectrum of crops such as soya beans and cotton, in a similar manner to loan recovery arrangements for tobacco," said Chinamasa.

He added that amendment of the Farmers Stop Order Act would be undertaken to protect all lenders by providing for the participation of all financial institutions, as well as curbing side marketing of crops.

Over the years, side marketing of crops such as cotton and maize has been one of the serious challenges crippling the growth and development of the agriculture sector in Zimbabwe. The challenges in the cotton sector that have seen collapse of cotton production against the background of low returns to the producers also emanate from absence of enforcement of stop orders," said Chinamasa.

He said the government recognises the importance of reviving cotton farming given significant agro-linkages with the textile industry and involvement of over 300,000 smallholder farmers. At its peak, cotton was the major source of income and livelihood for rural communities in different parts of the country including Gokwe, Sanyati, Rushinga and Checheche.



Source - chronicle