eBusiness Weekly
Business Writer
Government has allowed major private sector participation in the agriculture sector and this has led to a combined effort which has led to the rapid recovery of the country’s agriculture sector.
With the sector contributing between 11 to 14 percent to Zimbabwe’s gross domestic product, the sector continues to be critical to economic growth.
The country’s agricultural sector continues to be pivotal, with circa 60 percent of the working population directly or indirectly employed in the sub-sector as per World Bank estimates.
Economist Tinevimbo Shava said; “Economic performance is largely correlated with developments in the agricultural sector via value chain additions downstream. The past three farming seasons have seen a shift in agriculture methods and the results are being seen by breaking records of different crops annually.
Latest reports reveal that the government has set aside more than US$600 million for the 2023/24 farming season, whilst private sector support according to Reserve Bank of Zimbabwe statistics, the agriculture sector is the largest recipient of the private sector’s loans.
Private sector loans dedicated to agriculture account for 20 percent – 35 percent of the banking sector’s loan book and banks have committed $68 billion and US$160 million to complement the efforts of the government.
According to Morgan and Company research, wheat output has significantly improved in the last decade owing to an increase in hectarage from 11,000 hectares in 2014 to 45,000 hectares in 2023 through government support.
“Additionally, the producer price has somewhat improved because of the Russia-Ukraine conflict and improved modalities of US$520.22 per tonne with 75 percent payable in USD and the remainder in local currency at the prevailing interbank rate,” the report read.
Zimbabwe’s tobacco sector experienced its best year in 2023 with output almost exceeding 300 million kg. Key drivers of the improved output were increased hectarage and adequate rainfall.
“The additional area planted has largely been driven by growing contract farming activity in the country. Given a 7 percent increase in tobacco seed sales for the coming season, the crop might even exceed these set levels in the near future all thanks to the private sector,” said Vincent Makoni of Sabi Tobacco.
According to Morgan and Company, sugar production in Zimbabwe is estimated to increase to 410,000 tonnes in the 2023/24 season, up from 396,683 tonnes in the previous season.
“Key drivers of sugar production include hectarage and cane quality. Area planted has increased in the last decade, from 44,700 ha in the 2014/15 season to 54,000 ha in the 2022/23 season,” the report read.
Dr. Shingai Mukoko an agronomist alluded to the fact that the increase in sugar was largely the result of the completion of the Tugwi Mukosi irrigation project in 2017 as well as progress made under Project Kilimanjaro.
“Currently, the Tugwi-Mukosi Dam, which collectively supplies 72 percent of total sugarcane area with Mutirikwi Dam, has enough water to irrigate sugarcane fields for next two seasons. To date, 700 hectares has already been planted under Project Kilimanjaro. This means the private sector intervention will lead to a growth of the sector in the upcoming season,” he said.
Shava added that; “Payment modalities to farmers have improved since the 2019/20 season, much to the benefit of local farmers. Previous arrangements entailed the GMB paying farmers a static local currency price which significantly handicapped farmers’ ability to prepare for the following season. So such an improvement has led the sector to where it currently is today.”
These modalities changed in the 2022/23 season and farmers began receiving 30 percent of their dues in USD and the remainder in local currency at a static price. Currently, USD payments account for as much as 75 percent of total dues while the remainder is paid in Zimbabwe Dollars but at a price that is pegged to the official exchange rate.
