The ManicaPost
Samuel Kadungure
Senior Reporter
GOVERNMENT has read the riot act on seed houses and directed them to segregate what they trade among themselves, from what is owed to the company contracted to supply seed under the Presidential Inputs Programme (PIP).
This follows a statement released by Zimbabwe Seed Association (ZSA) on November 18, 2023 in which it cited 11 association members —Arda, Easiseeds, Farmbiz Genetics, Intaba Trading, Klein Karoo Seed Marketing, Prime Seeds/Seed Co vegetables, Quton, Reapers, Seed Co, Tocek, Zimbabwe Technology Solutions — as being owed a total of US$61 778 000 for seed supplied to various programmes for the 2022/23 and 2023/24 seasons.
ZSA argued that on average, seed houses were owed payments below 50 percent of the seed supplied in 2022/23 season, and nearly all the seed supplied this season, covering field, horticultural and fodder crops.
In an interview with The Manica Post yesterday (Thursday), Lands, Agriculture, Fisheries, Water and Rural Development’s Permanent Secretary, Professor Obert Jiri was singing from a different hymn book.
While confirming having been served with a copy of the ZSA statement, Professor Jiri dismissed it as misleading, vague and widely cast.
Professor Jiri insisted that ZSA should separate what seed houses owed each other and what is owed to the company contracted by Government.
“The Government does not contract all the 11 companies (listed). Ask them who has a contract for seed who has not been paid. They should indicate which companies and avoid blanket statements. I have read that statement, and it is unfortunate because it blankets everything as if Government is contracting all the 11 seed houses when we are not.
“It needs to be contextualised — they need to state how much each company is owed; which companies are owed by the company (contracted by Government). We need to avoid where they trade between themselves and ascribe that to Government.
“The correct position is that Government does not contract 11 companies, so that statement is misleading.
“If you go back to the originators of that statement, they should be able to segregate to you, first, which company is contracted by Government, second, segregate what they trade between themselves and then ascribe what exactly is owed to the company contracted by Government. That should give you a clearer picture. As it is that blanket statement is misleading,” said Professor Jiri.
ZSA argued that its members are heavily borrowed and failing to service the bank loans timeously.
The association further argued that the financial distress is untenable and may result in the scaling down of operations and closure of some seed houses.
“Some members have reported that they have defaulted on bank loans. Relationships with banks are now at their lowest level, seed companies cannot be trusted, and hence are failing to access favourable credit facilities including the productive sector facility.
“Those able to persuade banks for additional loan facilities are getting very high interest rates, which is very costly.
“Nearly all companies sub-contracted to Government’s PIP have failed to fully pay growers for seed delivered. Some have experienced side marketing since they had no funds to purchase seed on time. Furthermore, seed growers are demanding payment in USD as is being done in other value chains e.g. maize and wheat delivered to GMB. ZSA members have indicated that they don’t have access to forex to pay growers, given that the major customer, Government, is paying in local currency at the prevailing bank rate.
“ZSA members reported that they have lost some growers (mostly experienced growers in prime lands with good seed production infrastructure) this year as they refused to sign contracts with outstanding payments for 2023 seed deliveries, and/or without assurance of USD payments for seed delivered.
“ZSA members are struggling to finance growers this season, failing to secure inputs such as fertilisers, agrochemicals etc. Some ZSA members foresee a reduction in seed output unless the issues are addressed,” reads part of the statement.
ZSA said challenges with seed growers will impact negatively on seed production in an environment already made dire by the prevailing El Nino induced weather conditions, threatening future national seed security.
“There is need to climate-proof seed production. ZSA members are requesting Government to expedite payments of all outstanding debt, as a matter of urgency and using a viable exchange rate.
“The proposal to be paid part of this debt in forex, as is being done for grain deliveries to GMB, still stand.
“Given the pivotal position of the seed sector to agricultural production and productivity, ZSA is appealing to Government to facilitate the recovery of this sector from the current financial distress by putting together supportive financial programmes e.g. a ring-fenced agro-based low interest working capital facility, consideration of tax breaks and some such programmes,” it reads.
