The ManicaPost
Kudzanai Gerede: Post Correspondent
THE planned setting up of the Agriculture Commodity Exchange is expected to go a long way in closing the marketing gap for agricultural products in the country as Government steps up on liberalising the grain market environment.Currently the Grain Marketing Board is the grain buyer of first choice for most of commercial grain producers in the country at a time the parastatal did not have a ready market with quick returns for its products resulting in Government failing to pay farmers on time.
This has successively impacted negatively on farmers’ preparation for the next planting season which has compromised productivity.
As part of its restructuring and revival strategy of the country’s once vibrant agribusiness system in its recently launched two-year Interim Poverty Reduction Strategy (2016-2018), Government seeks to liberalise the agricultural products market by creating a platform for new alternative grain buyers to enhance market competitiveness for the commodity and quick financial returns for farmers.
The move comes at a time when there are calls for urgent restructuring of most agricultural parastatals whose under-performance and massive debts has weighed down on agriculture production creating a barrier in the agriculture value chains.
Farmers particularly those producing smaller grains have found accessing markets for their produce a cumbersome exercise and the coming in of a commodity exchange is expected to be a relief as it will accommodate more players in the buying and selling of agriculture products who will be prepared to fetch far enough for the commodity from communal farmers in the rural areas as well.
“Market linkages in the agriculture sector remain a challenge. There is centralisation of the limited markets particularly in urban centres which are distant from the actual areas were farming is actually being done and this piles costs for farmers which then affects productivity as the farming exercise ends up not viable,” Mr Charles Dhewa, an agronomist in agricultural markets with eMkambo, a physical and web based knowledge platform for agriculture markets and products told Business Post in a telephone interview.
He said having a regulated bourse would also help in curbing the scourge of mispricing of the commodities value which has seen most communal farmers sell their produce at a far lesser price owing to market illiteracy.
The agriculture commodity exchange is therefore expected to guarantee competitive pricing and a ready market for farmers.
Analyst further highlighted that the coming in of the Special Maize Production Programme (Command Agriculture) is expected to prop up grain output next year, hence it was imperative to note that once farmers are able to reimburse Government with the five tonnes per hectare as stipulated, a huge marketing gap is likely to present itself as farmers will needs alternative markets to sell surplus maize.
“Market systems knowledge is, however, essential for farmers to fully comprehend in order to fully benefit from such initiatives. Farmers should be able to interpret and foresee the trends in demand of commodities so as to balance supply and demand.
We have cases were farmers rush into farming a flooded commodity as recently noted with tomatoes which had to be sold as little as 50 cents a box at Mbare market,” said Mr Dhewa.
With Zimbabwe seeking to rejoin the international export market for grain by 2018, the introduction of the commodity exchange is likely to play a major role in attracting external markets and increase the country’s foreign currency receipts.
Other regional countries that have had success stories since setting up agriculture commodity exchange platforms include Ethiopia, Rwanda and Nigeria.These have helped in reducing market segmentation and stimulated exports.
Ethiopia set up its commodity exchange in 2008 and its bourse reached trading volumes of $1.4 billion in 2012.
