No subsidies because they are open to corruption-minister

The Deputy Minister of Agriculture Paddy Zhanda has ruled out subsidies because they are open to corruption. Instead, he said the government was offering high prices for crops like maize to encourage farmers to produce more.

“When we subsidise fertilizer at half of the price, who gets the fertilizer?  Those people who are in the privileged position will get the fertilizer at the expense of the general people. Mostly if you get the fertilizer at half the price sometimes you do not need to go into the field, it pays you better to just sell the fertilizer without going to produce,” Zhanda told the Senate.

It was therefore better to offer higher prices so that people could produce. This was a direct subsidy.

Zhanda said maize yields in Zimbabwe were extremely low.

“We are yielding 0.85 tonnes per hectare and we are putting 1.4 million hectares on maize alone.  Let me refer you back to 1995/1996, this country produced 2.6 million tonnes of maize and 1.6 million tonnes of that maize came from communal farmers before even the land reform, at an average yield of nearly 2 tonnes per hectare with one extension officer per every ward,” he said.

“Now, we are putting 1.8 million hectares and we are producing 0.85 tonnes. This year it is 0.03 tonnes per hectare. That is highly unsustainable; highly inefficient….”

Zhanda said Zimbabwe needed to address the issue of productivity because some people were producing 15 to 17 tonnes of maize per hectare.

“We have seeds that produce 14 tonnes. We have average yield producing 10 tonnes so the issue is about the yield…..”

Q& A:

SENATOR MUSAKA: I thank you Mr. President. My question is directed to the Deputy Minister of Agriculture, Mechanisation and Irrigation Development; appreciating all efforts being made by the ministry in relation to specifically grain production. My question is why are we as Government scared of subsidizing maize production like what is being done in Zambia and Germany who subsidize the basic commodities or the most essential commodities? They have lake mountains, wine pools, they simply subsidize. America does the same thing. What are we afraid of in Zimbabwe to subsidise agriculture? I thank you Mr. President.

THE DEPUTY MINISTER OF AGRICULTURE, MECHANISATION AND IRRIGATION DEVELOPMENT (MR. ZHANDA): Thank you very much Mr. President. I want to thank the hon. member. When I was answering the question I could see he was going to ask me this question. Mr. President, subsidies all over the world are not a bad idea. One thing about a subsidy is that Government must decide what commodity to subsidise and why it should subsidise that commodity. Secondly, they should decide and determine the cost of that subsidy. Thirdly, it should then identify sources of financing.

The problem of subsidizing a commodity without going through those various issues really has a negative effect to the intended goals. It can also bring in corruption especially when you decide to subsidise before production. One would think that if you were to subsidise you want to encourage production and productivity. As I alluded earlier on, the cost of 390 is a price that you will never find anywhere in this world, there is nothing that pays growing in agriculture than maize at 390. If I could get somewhere where I could grow 400 hectares, you are a millionaire. What we lack is the efficiency of production, our yields are very poor, we are yielding 0.85 tonnes per hectare and we are putting 1.4 million hectares on maize alone.

Let me refer you back to 1995/1996, this country produced 2.6 million tonnes of maize and 1.6 million tonnes of that maize came from communal farmers before even the land reform, at an average yield of nearly 2 tonnes per hectare with one extension officer per every ward.

Now, we are putting 1.8 million hectares and we are producing 0.85 tonnes. This year it is 0.03 tonnes per hectare. That is highly unsustainable; highly inefficient that will cause untold suffering which is unbearable on the value chain. As I said earlier on that 390 has a negative effect on the cost production of milk making it highly uncompetitive; that is why you cannot talk of even exports, we cannot export at 390. You cannot produce milk and chicken at 390 and export. So, to subsidise with the budget limitation that we have, subsidies calls for resources to be there in order to subsidise and as I said again if you subsidise fertilizer, I think the example was there, when we subsidise fertilizer at half of the price who gets the fertilizer, those people who are in the privileged position will get the fertilizer at the expense of the general people. Mostly if you get the fertilizer at half the price sometimes you do not need to go into the field, it pays you better to just sell the fertilizer without going to produce.

So, you will rather incentivize by other production that is why people are being paid 390, it is a direct subsidy. I think that must be very clear. What we need to address is the issue of productivity, anything that you do in agriculture without productivity, you are not going to survive. Some other people are producing 15-17 tonnes per hectare and other are producing one tonne. How do you survive in an environment like that? Other countries are producing not only on conventional seeds not GMO. We have seeds that produce 14 tonnes, we have average yield producing 10 tonnes so the issue is about the yield and the issues that even in livestock other mombes are producing 220 CDM (cold dress mass) after it has been slaughtered, other are producing 90kgs. So, that is a yield funder we must encourage our people to produce in a manner that will make them sustainable.

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