The farming industry has some of the most-funded contributors to the national Gross Domestic Product (GDP), with many projects and programmes being rolled out to ensure increased production and profitability.
However, despite this influx of financial structures are being put in place to warrant the profitability of these projects and programmes, it is still a long way before the underdog farmer responsible for the agricultural sectors’ viability has the financial freedom to fix prices to their produce.
The Zimbabwe Integrated Commercial Farmers Union president Mrs Mayiwepi Jiti believes farmers are too financially disadvantaged to price their produce as most outputs come with a pegged price from the contractors who would have funded production.
The majority of rural farmers are contracted growers who do not profit from their produce, as most contractual inputs come with a pegged price that ensures the contractor earns their cut from the outputs leaving farmers with nothing to claim for their blood and sweat.
Essentially, contract farming is an agreement between companies, organisations or the Government to sponsor economically weaker farmers, to create an effective way to promote enhanced production and marketing of the agriculture sector. In addition, if managed properly contract farming can become a source of increased income for the farmer and enhanced profitability for the sponsor.
Though, that does not seem to be the case with most of our farmers who are turning to contract farming as a way of escaping the weight of debts that come with outright borrowing or financial instability.
Although acknowledging that contract arrangements have positively changed the farming landscape, Mrs Jiti cannot help feeling that such arrangements are in some cases pushing some farmers into more debt after failing to produce enough to service their first debts and therefore keep nurturing debts from previous seasons.
Such a situation, she believes, has naturally made farmers less credit worthy with banks shunning giving them fresh capital injections to finance other agricultural activities that would potentially generate income for them to even service old debts. In the end, all farmers are stereotyped into one group that is not eligible for bank loans.
