13 February 2018

Zimbabwe: Gmb Blames $209 Million Loss On Government's Producer Price Incentive

Photo: The Standard
Silos in Zimbabwe.

The Grain Marketing Board (GMB) has blamed its cumulative $209 million loss to producer price incentives provided to local farmers by government.

This was revealed by board chairperson Charles Chikaura at a 2018 parastatals strategic meeting held recently in the resort town of Nyanga.

"The GMB is fully aware of the government's objective of ensuring food self-sufficiency through producer prices incentives provided to farmers," said Chikaura.

"This has partly contributed to trading losses currently sitting on GMB balance sheet, represented by a balance of $209 million accumulated since 2009, which renders GMB balance sheet weak."

Last year, the state-owned enterprise (SOE) procured maize and small grains at a flat price of $390 per tonne, up from $335 in 2016.

The 2017 price was higher than what was paid in regional countries such as Zambia and South Africa where a tonne costs $150 while Brazil, in Latin America, pays its farmers $140.

Chikaura said GMB will be working with the Auditor General to come up with "appropriate accounting of various strategic grain reserve (SGR) disbursements from government to the parastatal" which would have the effect of adjusting the loss position.

The company has also developed a new business model that seeks to rationalize its business by refocusing business activities towards fulfilment of its food security mandate.

"This can be achieved through separating the SGR and commercial business such that GMB focuses on the SGR social mandate while the commercial business will focus on value addition business.

"Implementation of the business model is anticipated commencing April 1 this year which is the beginning of the financial year," said Chikaura.

Meanwhile, speaking on the same event, lands and agriculture deputy minister David Marapira said the economy is projected to record substantial growth rate of about 4,5 percent, while agriculture sector is expected to grow by 10,7%.

"This growth will enable the sector to meet the national goals of a nutritious, self-sufficient and food surplus economy which will contribute to both export earnings and employment creation," said Marapira

He warned GMB workers to shape up, saying; "We all have to embrace a culture of performance.

"To those stuck in yester-year ways of doing business, your place is not within the new dispensation."


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