Wheat farmers across Zimbabwe have applauded the government’s decision to purchase this year’s wheat crop in foreign currency, with prices set at US$450 per tonne for standard wheat and US$470 for premium grade.
The move is seen as a positive step that aligns with import parity rates and allows farmers to retool and invest in future production.
The Grain Marketing Board (GMB) announced that payments will be made entirely in foreign currency, a measure welcomed by the farming community. The GMB also confirmed that it would purchase wheat grown under both the Presidential Input Programme (PIP) and from self-financed farmers, with the latter being able to sell their produce at the best market advantage. Additionally, GMB will act as a buyer of last resort and will collaborate with the Zimbabwe Mercantile Exchange (ZMX) to offer commercial warehouse receipt services.
Monica Chinamasa, president of the Zimbabwe National Farmers’ Union, expressed her satisfaction with the new payment method, saying it would ease farmers’ operations after the harvest. “Paying in United States dollars is icing on the cake. We can’t wait to deliver the wheat,” she said.
Zimbabwe Commercial Farmers’ Union (ZCFU) president Dr. Shadreck Makombe agreed, stating that the pricing was favourable, especially for those achieving high yields. “These are good prices, particularly for farmers producing five tonnes or more per hectare. Farmers are happy with the 100 percent payment in foreign currency, which will enable them to retool,” he noted.
Food Crop Contractors Association (FCCA) chairperson Graeme Murdoch highlighted that the pricing structure reflects the increased costs of production, adding that the payment method would be appreciated by growers.
Agriculture expert Dr. Reneth Mano also praised the government’s decision, pointing out that the pricing is consistent with the prevailing import parity price. He noted that the government’s commitment to paying in foreign currency is essential, as it would otherwise have to use foreign currency to import wheat if local production fell short of demand.
“In 2024, we imported blending wheat at an average price of US$420 per tonne, a decrease from 2023’s US$485,” Dr. Mano said, adding that the government’s efforts to lower the cost of production, including allowing direct fertilizer imports and reducing irrigation water and electricity costs, had contributed to improved profitability for farmers.
He also observed that Zimbabwe’s commercial wheat producers are now as competitive as their South African counterparts in terms of output per hectare, though higher local production costs remain a challenge. “The 2024 GMB wheat producer price is between 33 and 42 percent higher than South Africa’s due to comparatively higher production costs, such as the price of diesel,” he said.
Overall, the government’s foreign currency payment policy has been met with widespread approval, with hopes that it will bolster the wheat sector and encourage further growth in local production.