Zimbabwe Allows Seed Price Hike

JOHANNESBURG - Sep 26/02 - IRIN -- The Zimbabwean government says seed producers can raise their retail price by between 120% and 375% to encourage them to release seeds for the coming planting season.

The controlled seed prices for maize will go up by 120%, groundnuts and sunflower seeds by 150%, sugar beans by 300% and soya beans by 375%.

At the same time, local media reports said the government would inject Zim $37 million (US $689,925 at the official rate) into the Grain Marketing Board (GMB) to enable it to buy wheat from local farmers, with part of the money covering loans of seed to newly resettled farmers. It would also reportedly scrap import duties on wheat to help alleviate shortages.

Since this year's failed maize harvest, Zimbabweans have been increasingly turning to wheat as an alternative, depleting already lower than usual stocks.

"Seed producers argued that the previous prices were not commercially viable and so there were shortages on the market. It was an artificial shortage and the companies' arguments were valid," explained Steyn Berejena, a Department of Information press officer.

Commenting on the seed price increase, George Hutchison, general manager for commodities at the Grain Producer's Association, said: "It came just in time. Farmers were beginning to panic about the availability of seeds."

But, the price increase would have to be built into next year's consumer prices. "In April we will know the effect on the consumer," Hutchison told IRIN.

However, a seed company spokesman was less optimistic. "The seed price increase makes sensational headlines, but it's not what we asked for," said Brien Deworonin, marketing manager for Seed Co.

He noted the increase was based on a 15-month-old price, overtaken by a 135% inflation rate.

"But at least [the increase] enables us to carry on," Deworonin said. "If they hadn't done it we would have to close down."

Copyright (c) UN Office for the Coordination of Humanitarian Affairs 2002

The subscriber version of the article is available by Clicking here