Betty Chikava, Mt Darwin East MP, put Finance minister Tendai Biti on the spot in the House of Assembly after relentless State Press accusations that the MDC secretary general was refusing to pay farmers as a means of sabotaging agriculture.
Biti told the House of Assembly that under the 2011 grain procurement scheme, the government set a producer price of $285.00 per metric tonne this year, up from the $275.00 per metric tonne of last season.
Three problems
"However, we have had three problems. The first one is an obvious one, the problem of money and fiscal space," Biti said. "As I reported in this House in July, our budget for the year 2011 is $2.7 billion. The budget of $2.7 billion presupposes that we have to collect $229m per month, and as I reported in the first half of the year, there were only two months that we were able to exceed $200 million never mind $229million.
“Those were the months of March and June and these are the months that corporates/companies pay their corporate taxes. In July 2011, we had a salary increase of $260 million, which requires that the government has to find an additional $42 million per month, bringing the paradox and contradiction of increased expenditure on the basis of reduced revenue."
Biti said when the government set the producer price of $285, Cabinet had agreed that payment to farmers would be made 10 days after delivery.
"But the tsunami of the $260 million then came, and in every country you must pay wages first, other wise you will have a civil commotion," Biti said. "As I said in the mid-term statement, wages are now taking 67 percent of our expenditure which means that out of every $1 that we receive US$0.67c is going towards wages with US$0.33c going to hospitals and other budget areas."
Under pressure
Biti said he was under pressure from several sectors who all want money.
"The Minister of Health wants $33million from me because he wants to make user fees free, the minister of Agriculture wants $45million for the vulnerable sector, minister Mzembi wants $20 million to support the re-branding of Zimbabwe as he calls it – so there are numerous demands on the fiscus.
“Members of Parliament want motor vehicles and they also want CDF money. So all these need fiscal space, but we do not have fiscal space," Biti said.
The Finance minister said Zimbabwe was the only country in Sub Saharan Africa, which does not have direct donor assistance.
"We therefore have to deal with our debt question," he said.
Zimbabwe owes more than $7billion to Bretton Woods institution that has precluded the country from accessing lines of credit. But Biti said he had plan.
"We have agreed on the following: we owe farmers $35 million and we paid $10 million last week, but because we realised that rains are going to be early this year, we are in the process of gathering inputs, seed and fertilizer that is going to the Grain Marketing Board to the tune of $30m. This will enable the farmer to swap his
payment with the available seed and fertilizer," Biti told the House of Asssembly.
Price distortions
Biti said price distortions were also to blame for the current scenario.
"Made (Agriculture minister), you are to blame for continuing to set producer prices of maize," Biti said. "The price that the GMB is selling is $285 per metric tonne, Malawi has overproduced and has surplus of 700 000 metric tonnes of maize, Zambia 400 000 metric tonnes, Republic of South Africa has 9 million metric tonnes surplus,
though part of it is GMO. The region has got surplus. What is happening is that you can buy maize from Malawi or anywhere between $175 to $190. So now makoronyera nemagumaguma are importing maize from neighbouring countries. We do not have a mechanism of preventing that cheap imported maize going to GMB, so as government we need to revisit our systems."
Biti said the second problem was that when millers go to the GMB to buy maize, GMB is selling maize at $325 per tonne.
"So you will be made to buy maize at $325 per tonne when you can import it at $190. GMB is now sitting at huge maize stocks which it can not sell to anyone, yet the government is just buying and buying. So we need major policy reviews," he said.
Chikava insisted that Biti must pay the farmers in cash and not in farming inputs.
Post published in: News