The Sunday News
Ngonidzashe Chiutsi Business Correspondent
MOST farmers in Matabeleland have indicated that they will stop engaging in contract farming this season arguing that they were being shortchanged by contractors. Contract farming is a system where agricultural production is carried out on the basis of an agreement between the buyer and the farm owner. Sometimes it involves the buyer specifying the quality required and the price, with the farmer agreeing to deliver at a specified period.
In an interview, Matabeleland Agriculture Business Chamber director Mr Gerald Bhebhe said due to a number of anomalies in the contract farming system, many farmers had stopped practicing the system.
“There are a lot of anomalies regarding contract farming. In Matabeleland region, if you do a quick survey, you will discover that those who were practicing contract farming have stopped, mainly because there was no regulatory framework governing contract farming and there was always a possible avenue for abuse by the contractors,” said Mr Bhebhe.
He said a number of affected farmers were in the poultry sector.
“The farmer always has those overheads that he has to cover as the costing model does not cover those. At the end of the day most of the farmers involved in contract farming found themselves making losses. Sometimes the system will not be able to cover other costs such as labour and utility bills,” he said.
Mr Bhebhe said some farmers were breaching the contract after failing to break even.
“There is also the other issue where farmers have an unbecoming behaviour and decide to short-change the contractor. There is a lot of side marketing and dishonesty that is happening as a way of trying to address the anomalies that are there. There is a need to widen the scope of contract farming. By design, contract farming should be a win-win situation but as it is, it is not.”
He said the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim Asset) policy called for private partnerships in the farming sector but regrettably the deals were not benefiting famers.
“If you look at the national blue print, the Zim Asset, it really encourages contract farming. It encourages PPPs where private institutions should support smallholder farmers to stimulate capacity. It’s an open secret that the agriculture sector is ailing because of lack of support, particularly financial support. The farmers are unable to acquire enough inputs for their production and in time and that has a negative impact on productivity. What contract farming does is, it bridges the gap and farmers get inputs on time. Most importantly it provides the market for the agriculture produce,” said Mr Bhebhe.
A farmer from Umguza district Mr Evans Ndlovu who was into poultry contract farming last year, blasted the contractors for short-changing them.
“I have stopped practicing contract farming after making huge losses. The problem is that, as farmers we have no say in the designing of the contract. The contract companies make the decisions for example like on how much to pay for each delivery of the product,” he said.
Mr Ndlovu said some unscrupulous contractors would inflate prices of inputs, thereby compromising profitability for farmers.
Mr Bhebhe said they were gathering information on how contract farming could be “panel beaten” and come up with a win-win situation.
“We have engaged all stakeholders, that is, the contract farmers, the producers and farmers so that we can engage in meaningful dialogue and articulate those issues in the contract farming system. It is through contract farming that we can see a meaningful recovery of the agriculture sector. The money is not there and the financing institutions are not willing to give money to smallholder farmers hence there must be a way of allowing production to go on,” he said.
Mr Bhebhe said they will craft a position paper that can be used to lobby Government and other relevant authorities such as Agriculture Marketing Authority (AMA) to bring sanity to the sector.
Experts say contract farming remains the only viable way and marketing solution for farmers who are unable to secure loans from banks. Zimbabwe has practiced contract farming for many years.
Reports say long back the system covered crops such as groundnuts, paprika, sugar cane, tea and the production of seed for a variety of crops. The system is now commonly used by poultry and tobacco farmers.
