The Grain Marketing Board owes farmers more than US$6,1 million thereby disrupting farming operations, Agriculture, Mechanisation and Irrigation Development Minister Joseph Made has said.
The minister also revealed that Government would not extend financial assistance to farmers for the winter wheat crop, saying the era of handouts was over.
Minister Made said delays by Treasury in releasing money to GMB had, however, hampered farming activities.
Minister Made said GMB's grain procurement scheme is wholly funded by Government to boost the national strategic grain reserve.
"The situation has left many farmers troubled as many were yet to pay back loans that they borrowed from banks and the loans have already accumulated interest," he added.
Government is targeting to put 1,6 million hectares of land under maize to produce 2,2 million tonnes for domestic consumption.
But some farmers have scaled down maize production because GMB takes up to two years to pay them and at rates that are lower than those offered by private buyers.
Further, Government pays higher prices for imported maize than it does to local farmers through the GMB.
On winter wheat, Minister Made said farmers should start approaching banks for financing now.
"Government is preparing for the winter wheat programme but farmers should not sit back and wait for handouts.
"It is the duty of every farmer to start approaching banks and other supporting institutions for resources. Farmers and the private sector should be pre-occupied with preparations for the winter cropping season as there will not be free handouts," he said.
"We want to create a sense of 'nothing for free'. We want farmers to make an effort or at least we put in the aspect of a down payment. Farmers should understand that even though we are under sanctions, they should work hard and pay for services," he said.
Under the stop-order system that Government appears to be favouring, farmers get inputs and service on credit and the money is deducted from them at point of sale.
Wheat production continues on a downward trend, declining from 33 700 tonnes in 2012 to 24 700 tonnes in 2013.
Last year Government wanted to raise US$88,4 million to produce 160 000 tonnes of wheat but failed.
Grain millers who promised to fund wheat production withdrew at the last minute citing the absence of a regulatory framework to guide the contract system.
Some farmers complained that the US$400 per tonne offered by the GMB was not viable considering high production costs of up to US$1 200 per hectare.