eBusiness Weekly
Business Writer
Cooking Oil producer Surface Wilmar (Wilmar) says there is need for the Government to put in place a new agriculture model that will seek to empower farmers as well as reduce the costs involved in doing so.
The company, which is a joint venture between Wilmar International and the Government, says the current model where farmers are provided with inputs and also given a producer price that is above regional market prices, is not sustainable in the long term.
“The Command Agriculture has been declared as a great success, and has given food sufficiency to the country.
“This was the need of the hour, however, the model has costs that are not sustainable in the long term,” said Wilmar.
The Government introduced Command Agriculture back in 2016, with the scheme targeting at least 2 000 farmers to produce maize for the country.
But Wilmar believes many of the beneficiaries were not efficient enough to produce the crop at regional import parity prices. This is also at a time the Government bought the crop at a declared price, which was above regional parity, but sold it to millers and oil expressers at import parity prices.
“In our opinion, this has given an excellent opportunity to efficient farmers to make more profits, while the farmers at large have not benefited. The inefficiency of the farmers is due to high pricing of the seed, fertiliser and other inputs, which are in excess of 40 percent as compared to regional markets,” said Wilmar in a statement.
“We commend that Government provides subsidy on inputs like seed and fertiliser rather than paying the farmers’ prices above regional market price.
“This will enable the farmers to increase hectarage and farm efficiency, while the price of produce should be determined and declared as per regional/import parity.”
According to Wilmar, this will allow the level playing field to all the industry operators to compete and buy the produce, while farmers will be able to sell at market price.
“This will reduce the burden on the exchequer, and will also remove malpractices due to arbitrage opportunities created in the current model,” said Wilmar.
Wilmar believes that given the available farm land in the country, the occupants “have not been productive”.
“The Government should review the lease rates on land to discourage farmers from sitting on large tracts of land without being productive, while it explores the possibility of re-allocating the underutilised land to skilled and financially capable farmers. Such lease rentals on land can be used to subsidise inputs to farmers.”
The Government should also incentivise investors, to install irrigation schemes to tap into water resources, that are abundant in the country, said Wilmar.
“These irrigation schemes should be BOT (Built Operate and Transfer) basis, enabling the developers to recover their costs, and then hand over such infrastructure to ZINWA for future operations.
“This will enable the farmers to have water at their farms and will increase productivity.”
