Producer price of wheat up but…


The government has increased the producer price of wheat from $400 000 a tonne to $776 205 a tonne but farmers have said the price increase came too late. They also said the government should decontrol the market to enable farmers to operate viably.

Douglas Tayor-Freeme of the Commercial Farmers Union said the price increase was meaningless because this year’s crop had already been harvested. The price would not be good enough for next year’s crop because by that time farmers would probably require a producer price of around $1.5 million a tonne.

Ironically, despite the 94 percent producer price increase, the government kept the selling price for millers at $366 586 ostensibly to cushion consumers.

The price of bread, at an average of $3 000, is already beyond the reach of most consumers. Such heavy subsidies tend the benefit the rich rather than the poor and are costly to taxpayers as a whole.

Zimbabwe is estimated to have produced only 150 000 of wheat this year while the national demand is 341 353 tonnes.

It had opening stocks of 28 400 tonnes at the beginning of the current marketing season in April and had imported 50 000 tonnes by 18 August leaving a deficit of 112 953 tonnes.

The shortage of wheat has resulted in a shortage of bread and related products and, where available, the products are too expensive for most consumers. There is also a shortage of flour which would have enabled families to bake their own products.

But while the country is facing a shortage almost every cereal it has a huge surplus of rice. It has 57 565 tonnes of rice while annual consumption is only 11 653 tonnes leaving a surplus of 45 913 tonnes.

Most of the rice, about 50 000 tonnes, was donated by India. Though this was a donation from a third world country, it was a typical case of dumping, as rice is not a staple.

The country will have a deficit of 61 959 tonnes of maize, if it manages to import 240 431 tonnes. It also has a deficit of 95 802 tonnes of millet.


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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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