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Agri Alert
Commercial Farmers' Union Zimbabwe
August 17, 2012

http://www.swradioafrica.com/cfu-press-statement-agri-alert/

Several years ago Zimbabwe not only produced enough maize to feed its people but also had surpluses to export. More recently Zimbabwe's food security position is governed by its inability to attain self-sufficiency in maize production and this position is now set to get worse. Output in 2012 is less than half of domestic consumption, and substantial imports will be necessary to meet the production deficit.

These imports will have to be undertaken when the world grain markets are under supplied. The main commodities affected are maize, wheat, and soyabeans. Droughts have struck food producing regions in all the continents. Of special significance to Zimbabwe are world maize production and trade developments because this commodity is our staple food commodity.

In the United States maize crops continue to wilt in the corn belt of the mid-West because of dry conditions and unusually high temperatures and this position is forecast to extend into the autumn. As a result U.S. maize exports for the 2012/13 marketing season are projected to fall by more than 8 million tonnes. This will seriously impact on its main customers in the Far East and elsewhere. Already unsettled overseas financial markets and shortages are driving up world maize prices. Zimbabwe cannot secure all of maize imports within southern Africa and will be forced to compete for scarce and expensive maize elsewhere.

GMO maize is produced in South Africa so that market cannot be tapped as GMO maize is prohibited for human consumption in Zimbabwe. Two other regional countries, Zambia and Malawi, have surpluses of non-GMO maize available for export but the limited quantities available will not be enough to satisfy Zimbabwe's requirements. In any event Zimbabwe will be in competition with other importing countries in the region. Thus Zimbabwe needs to act expeditiously to secure maize supplies from both regional and world markets.

Looking into the future, prospects for Zimbabwe's maize production in the coming season and beyond are not good. This situation stems from funding difficulties arising from illiquid money markets and looming input supply problems. Farmers are faced not only with scarce and costly inputs but also have a great difficulty in raising loans in a hostile financial environment where competition is stiff for limited funding resources. Credit is scarce and interest rates prohibitively high.

Regarding inputs seed companies and fertilizer manufacturing companies are also owed tens of millions of dollars by debtors for purchases of seed and fertilizers.

Production of maize seed this year, at 27,170 tonnes, was below the national requirement of around 36,000 tonnes. Seed companies have not paid many growers who were contracted to grow seed for them because of the outstanding debts owed to them. As a result many small scale maize seed growers cut their losses and on-sold or consumed the seed as grain.

Carryover stocks this year will fortunately plug the supply gap and negate the need to import seed for the coming maize growing season. On the down side, however, the non-payment of seed growers is likely to reduce plantings in the coming season with farmers switching to other crops where payments for product are more certain. This will undoubtedly increase Zimbabwe's dependency on imports of a major input which traditionally domestic output has always met demand with sizeable surpluses being exported.

The local fertilizer industry is also in a precarious position. Procuring working capital and a substantial level of unpaid debts have prevented manufacturers from importing potash and other required ingredients. Stocks at the end of June were very low at 29,000 tonnes. The production capacity of the industry will not be able to meet the combined national requirements for growing maize of 370,000 tonnes for both Compound "D" and Ammonium Nitrate by December. Thus there will be a need to import substantial quantities of fertilizers to make up shortfalls. Farmers will have to bear the higher costs of imported fertilizers.

Unless the Zimbabwe Government immediately puts in place policies that boost maize production the country may well face starvation. The Commercial Farmers' Union stands ready to assist in formulating such policies and contributing to food production.

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