HARARE - The Grain Millers Association of Zimbabwe (Gmaz) says government has accumulated $108 million foreign debt on grain which needs servicing to avert looming food shortages and price hikes.

“Government must, as a matter of urgency, pay in full or enter into payment settlement with its foreign grain creditors,” said chairperson Tafadzwa Musarara in Gmaz 2013 National Budget expectations.

Musarara said the debt settlement was imperative in order to ensure that private millers and the Grain Marketing Board (GMB) resume receiving supplementary grain at affordable terms to cover the current deficit.

“The non-payment of these debts is affecting adequate flow of imported grain on collateral management agreement basis into Zimbabwe to private millers and will also be impossible for government to import maize to replenish its strategic reserves in the near future,” he said.

The Gmaz head said current poor state of GMB’s silo storage facilities had resulted in the contamination of more than 70 000 metric tonnes of grain, becoming unfit for human consumption.

“This has further depleted the poor strategic grain reserve. Treasury must mobilise funds for the refurbishment of GMB silos in the forthcoming budget to allow GMB to fully undertake its strategic grain storage mandate,” said Musarara.

He however, applauded the downward review of duty on imported wheat and other grain products calling for the retention of the existing tariff structure, which he said was required to aid the full recovery of the sector.

Records show that duty on wheat imports had always been pegged at 20 percent prior to dollarisation.
It was only reduced to zero and then increased to five percent due to economic circumstances the country was experiencing at the onset of dollarisation in 2009.

Zimbabwe has been importing wheat from countries as far afield as Turkey and Russia due to low local production in recent years.

Wheat production is at its lowest as government and agriculture stakeholders continue to fail to put in place effective plans to boost production of the cereal.

The failure by GMB to pay for the deliveries has also severely prejudiced farmers as they are unable to continue with their farming activities.

“Treasury’s unfulfilled promises to support agriculture militate against national self-sufficient food production,” said Musarara.

High production costs coupled with failure by farmers to access agricultural inputs and shortage of power for irrigation continue to present obstacles for wheat producers.

Gmaz is on record saying that the continued free importation is stifling local production of the crop as there was no incentive for farmers when imports were coming in cheaper.

Zimbabwe has made no effort to settle its long-standing foreign grain debt yet since the inception of the Government of National Unity in 2009 under the auspices of the Global Political Agreement, with over $300 million has been spent in foreign travel.