The Zimbabwe government has liberalized the grain market by removing the monopoly of the Grain Marketing Board (GMB) to purchase grain as part of efforts to stimulate production and enhance food security, New Ziana reported on Thursday.
Presenting the 2009 National Budget to Parliament, Acting Finance Minister Patrick Chinamasa said millers and other grain merchants would now compete in purchasing maize and wheat grain directly from farmers, alongside with the GMB, at prices not lower than the import parity.
"Hence the GMB assumes the role of buyer of last resort," he said, adding millers were now also able to make arrangements with the grain utility to purchase in foreign currency, some of the wheat delivered to it.
Chinamasa said consistent with the liberalisation of the grain marketing, the price of seed maize payable to farmers on harvesting would be both in foreign and local currencies and pegged at FOB import parity levels for commercial maize, plus 30 percent.
Chinamasa said starting from the next summer cropping season, the government would put in place measures to restore and enhance the level of participation of the financial services sector in lending to farmers.
He said participation of the banking sector in agricultural financing would allow the government to channel resources towards supporting research and extension services as well as targeted support to smaller farmers in communal and resettlement areas.
The government would also call for increased contract farming next season, Chinamasa said, inviting agro-processing companies to start making arrangements for provision of inputs, financing and extension support on a win-win basis.
The Zimbabwe government has identified agriculture as the key to turning around the economy and has directed large amounts of resources to increase capacity of farmers to produce through rehabilitating irrigation infrastructure, providing free inputs as well as mechanised equipment.