Biti gets his maths wrong


HON. NDIWENI:  Thank you Mr. Speaker Sir.  My supplementary question was – it would be prudent and transparent if instead of coming up with incentives and the like, if what the Minister says that they are now offering more than the import price, why do they not peg it to the import price because we have many people there and it would mean a lot if they just said the price that we are buying grain is exactly the same as the import price.  You would find so much grain would be delivered to GMB as of next week.  I thank you Mr. Speaker.

HON. DR. MASUKA:  Mr. Speaker Sir, again I thank the Hon. Member for the supplementary question which is a suggestion about what would happen should certain things be done without the proof that indeed that will happen, first the suggestion that if we paid then the deliveries would be accelerated.  The cost incurred by farmers on the farm are in Zimbabwean dollars and in United States dollars and we think that the model that we have proffered is the best under the circumstances although we are prepared to consider any other suggestions which will incentivise and motivate farmers to deliver the grain as the policy is intended to do.  Thank you Mr. Speaker Sir.

HON. BITI:  Hon. Speaker Sir, the price offered by the Government yesterday is now effectively US$239.  If you divide the $75 000 with the official exchange rate and you add US$90, you get to $239 per tonne when externally FOB is $289.  The Minister says the target is US$300 but quite clearly, from the figures I have just given it is US$239.  So the critical question to the Minister is, why simply not abolish the Zimbabwean dollar component and just pay all the amounts in United States dollars so that the farmer is adequately remunerated?  What is going to happen Mr. Speaker Sir, is that we are going to have a drought because farmers are not going to deliver to the GMB.  I thank you Mr. Speaker Sir.

THE HON. SPEAKER:  Hon. Biti, you have asked the question.  Thank you.

HON. DR. MASUKA:  Mr. Speaker Sir, I thank the Hon. Member again for a suggestion.   The numbers that he has proffered, we are talking about $75 000 per metric tonne which even if you use the exchange rate that he has suggested and then add the US$90, we will certainly be above US$300.  So they can revise their arithmetic in that regard.

The import parity Mr. Speaker Sir, is not the price that the farmers in those jurisdictions are paid.  It is the price of landing maize.  Let us clarify this aspect.  The price of landing maize in Zimbabwe is not the cost that farmers are paid.  So you need to subtract that and if you do so, you will find that Zambia is at US$180 and Malawi is at US$225.  So Zimbabwean farmers are actually getting more than the other farmers in the region because of the cost plus pricing model which takes into account exactly what the Member has said that the micro economic environment is different and therefore our farmers need to be rewarded differently.  Thank you Mr. Speaker Sir.


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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.


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