GOVERNMENT wants the private sector to increase funding for agriculture in the 2022/23 season and plans to lower its exposure to the industry. It, however, plans to maintain some subsidies to support farmers.
Now that the new 2022/23 summer cropping season is in its second month, the authorities and farmers fear a repeat of the previous season which was categorised by erratic rainfall patterns.
Farmers have been calling for more financing into irrigation schemes and farming inputs with the government launching the US$20 million Small-holder Irrigation Infrastructure Development Fund that covers 18 smallholder irrigation schemes last month.
“Despite the opportunities and the ongoing transformation of the agriculture sector, the financial sector has largely been hesitant to support the sector and are still to develop effective mechanisms of mitigating risks associated with the sector, such as low repayment levels, side marketing and crop failure due to climatic change impacts,” Finance minister Mthuli Ncube said, in the 2023 national budget last week.
“Hence, government has up-scaled the engagement with relevant stakeholders to review the current agricultural financing model, in order to increase the role of the private sector in the financing of agriculture activities. The aim is to limit the government’s role to supporting the vulnerable households, provision of requisite infrastructure, as well as extension services, among other relevant supportive services.”
He said government’s support towards various agriculture programmes had significantly increased output of strategic crops.
“While output levels for targeted crops such as wheat which has the highest ever output in 2022, yields have generally remained low when compared with our neighbouring peers. The low yields undermine the competitiveness of the other sectors dependent on agriculture for inputs, increase the demand for imports to cover the production shortfalls which increases fiscal outlays to unsustainable levels and undermine the balance of payments position,” Ncube said.
From the 2023 national budget, it was revealed that the country’s maize yields are generally below 1,5 tonnes per hectare, lower than neighbouring Zambia, Malawi and South Africa at 2,5 tonnes, two tonnes and five tonnes per hectare, respectively.
With inflation being elevated as a result of the depreciating Zimbabwe dollar, farmers are struggling to purchase farming inputs or irrigation systems that are now requiring either public or private assistance.
The United States Agency for International Development, through its food security arm, the Famine Early Warning Systems Network (FEWS NET) said throughout the main 2022/23 agricultural season, access to crop inputs is expected to be significantly below normal, due to above-average prices in both US and Zimbabwe dollar terms.
“Most smallholder households are expected to depend on government crop input assistance, given their inability to purchase inputs on the markets,” FEWS NET said in its latest update.
“As has been the case over the last few years, shortages of some fertilisers are likely and the demand for top-dressing fertiliser is expected to be higher than normal given above-average rainfall forecasts across the country and anticipated high levels of leaching.
“Despite input access challenges, green harvests and consumption are expected at near-normal levels in early 2023 and the main harvest is also likely to be near-average from April/May.”