Drought, grain imports and private sector role
ZIMBABWE is facing a serious drought situation which requires cooperation from all stakeholders in ensuring that everyone has access to food. This food will be distributed to some as free aide, mostly to the vulnerable and through the market for on sell to other citizens.
The private sector will play a significant role in mobilising resources to procure grain from all over the world to assist in addressing the drought situation.
As the government moved to declare the drought situation as a State of Disaster, the private sector was already in the process of putting in place a plan. Apart from donations to assist in the situation, the private sector, through grain traders and millers had put in place plans and finance mechanisms to bring about 90 000 tonnes per month. The maize grain would be coming mainly from the United States, Mexico and South America.
In discussions with government officials on the logistics of the grain imports, the Confederation of Zimbabwe Industries (CZI) and millers representing private sector told government that of this 90 000 tonnes, 70 percent would be for human consumption, while the balance would be for stock feeds.
CZI has urged government to exercise extreme caution in the issuance of import permits for maize meal as this would affect the plans and the financing of grain importation by the private sector. With the serious shortage of grain, there are already people being issued maize meal imports and importing this maize meal from South Africa, mainly taking advantage of the weak South African rand at the expense of local processors who are importing grain, milling it and then selling on the local market. Importing grain, as opposed to maize meal, is crucial in that it creates and maintains jobs for Zimbabwean by our milling companies.
In some parts of the country, there are reports of cancellation of orders from millers in preference to cheap imports.
The arbitrary issuance of maize meal import licences may, therefore, threaten the viability of the local milling industry to who government has made an appeal to join in efforts to bring in grain into the local market as part of the private sector role towards drought management.
Government has also made an appeal to the private sector to work with farmers closer to water bodies in producing more grain for the country, and all these efforts might be frustrated by maize meal imports.
Everyone should play a role in addressing the maize situation and ensure that every one has access to food.
The vulnerable groups in different parts of the country would certainly need special attention and urgent steps should be taken to deliver food aid to them. It is one thing to have maize meal being brought into the country and is directed to alleviate the situation for the vulnerable groups.
However, it is another thing to import maize meal for sell on the local market. Maize meal imports would affect the capacity utilisation of millers and their ability to finance farmers locally through contract farming.
If imported maize meal is to be sold on the open market as opposed to being used for food aid then this would be harmful to the private sector’s ability to participate in supporting drought mitigation efforts and to then continue to have the capacity to engage in contract farming.
The impact of bringing in processed grain, not just maize, also threatens the livestock sector, that is the farmers and the stockfeeds manufacturers, who might be forced to import stock feeds. The impact on the import bill and jobs would also be felt.
While making every effort to address the drought situation, it would also be wise to also look beyond the drought, and remember that farmers and the private sector, through the various agro value chains, will need each other if the country is to continue on the path of increasing value addition.
The private sector, in its continuous engagements with government has also urged the State to put in place mechanisms to ensure that white maize being imported is prioritised for human consumption with yellow maize going for stock- feeds as the white maize stocks on the international market were reducing by day.
The private sector cautioned government against taking too long to get into action as genetically modified organism (GMO)-free grain stocks on the international market were also running low. Government has a no GMO policy, although GMO grain can be imported under strict supervision for direct milling.
Government put in place a team to coordinate grain importation to ensure smooth movement into the country following challenges with the capacity of the country’s rail transportation system.
The private sector, which had already started negotiations with Mozambique Ports and Rail warned that the capacity at Beira and Maputo is also constrained.
Beira port is small and can only accommodate a limited number of vessels. While Maputo port has bigger capacity, part of the port area meant for grain delivery was gutted by fire and would only be ready in about five months’ time.
There are plans to move most of the maize through Beira and Maputo ports.
As both private sector and government, as well aid agencies move grain, coordination of these efforts would be important to avoid losses and increase in costs, given the capacity constraints of the ports.
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