Thread by @shingaiRndoro

#AgriculturalProductivity 🔥🔥

1/ From the ZW statistics shown, tobacco&cotton are the only agricultural commodities that are being exported that are in the #Top10ExportGoods (2018).

There is need to consider agricultural productivity commercially as a vibrant economic sector.

2/ From this ir.uz.ac.zw/bitstream/hand… & the book image below, one realises that the Gvt sets producer price for tobacco, cotton, maize, wheat & soyabeans.

Ironically this is a carry over from the UDI (1965-79) statist policies. This is against how the market needs to operate.

3/ The agricultural value chain (#AgVC) & business environment consist of:

4/ For the agricultural sector as a marketplace & business, what does the farmer, trader & customer want out of it?

@ZimTreasury @ZNCCNational @czionline

5/ In ordinary business sense, "#ValueChains are all the activities that firms undertake to bring a product or a service from its conception to its end use by final consumers."

The chain can be #ProducerDrivenChain or #BuyerDrivenChain.

6/ The #AgricultureValueChain should not only be a vibrant market but also commercially viable & sustainable.

A market is when two parties meet to engage in an economic transaction of goods&services. The parties involved are the buyer & seller.

@MoLAWRR_Zim

7/ What needs 2 be done in respect of the 3 streams (upstream, midstream & downstream) of the #AgVC 2 attract funding, investment, productivity & expand the domestic&foreign markets?

Agricultural shows are meant 2 be AgVC Expos & Conferences 4 the sector business activities.

8/ The #AgriValueChain has to be commercialised digitalised & mechanised as indicated below.

9/ ZWGvt intervention needs 2 be properly defined & calibrated so that it doesn't distort the market, productivity & sustainability of the #AgVC. @MoLAWRR_Zim

For example in the EU, the #CommonAgriculturalPolicy (#CAP) has specific objectives.

10/ Commercial viability for international prices for agricultural commodities & the finished products that are then imported to developing countries are affected by agricultural subsidies in developed countries.

In the EU funding is under the CAP.

11/ Since 1995, the CAP has been subject 2 the WTO Agreement on Agriculture (AoA), which establishes
binding commitments aimed at reducing trade distorting public support 4 agriculture (improve market access, reduce domestic support linked 2 production&reduce export subsidies).

12/ The CAP 2014–2020 has 2 pillars:
1. European Agricultural Guarantee Fund (EAGF) by providing income&market support.
2. Rural development policy financed through the European Agricultural Fund for Rural Development (EAFRD).

EU CAP, europarl.europa.eu/RegData/etudes…

13/ A government is constitutionally empowered to ensure that there is economic growth, food security & increased #AgriculturalProductivity.

The BIG Question is HOW can it do so? This thread is an attempt to answer that.

14/ Agricultural input support programme by the Gvt either as subsidised credit or a donation is meant 2 help smallholder farmers afford inputs. Produce makes it possible 2alleviate rural poverty, improve livelihoods&boost agricultural production.

How is the selling price fixed?

15/ Does the unilateral fixing & announcement of producer prices by the Gvt not interfere with the market relationship of a seller (farmer) & the buyer (agricultural marketing company, #AMC)?

Whom is the Gvt serving between the seller & buyer? Arent both parties in the economy?

16/ Fixing of producer prices by the Gvt lacks the consent of the seller & buyer.

The producer price arbitrarily fixed by the Gvt 4 the farmers doesn’t take into account many business factors for the buyers & the ultimate off take price by local&foreign markets.

17/ Risks of Gvt free inputs programme:
⏩Corruption & patronage in the distribution of inputs,
⏩Immediate benefit by selling inputs for cash,
⏩Perennial dependancy,
⏩Non-accountability in usage&output,
⏩Opaque criteria
⏩Fiscal limitations,
⏩Shortage, &
⏩Weather

18/ How can this be achieved in the agricultural value chain to make it commercially viable, sustainable & vibrant 2 create jobs, create tax for Gvt & create high return on investment for all parties in the upstream, midstream & downstream?

(A separate thread on cotton soon)

19/ Role of Gvt in a mkt economy is not 2 be a player but as the rule maker (makes&enforces laws governing the conditions under which voluntary transactions are made) & umpire (settling disputes from parties) 2 protect&promote:
i. Freedom
ii. Rights
iii. Property
iv. Competition

20/ Agricultural inputs shld come as a credit from buyers (#AMCs) or financial institutions.

Most people were brought up by the farming credit from the #AgriculturalFinanceCorporation (#AFC) that later collapsed due to mismanagement.

21/ Farmers should feel they have earned input support if they are incentivised & rewarded when they produce by getting output incentives.

22/ Agricultural marketing companies (#AMCs) are those of the operations involving of moving saleable farm products from farmers (producers) to the consumers through collection, grading, segmenting, ginning, processing, preserving, transportation & financing.

23/ A market-based framework of the commercial viable, sustainable & vibrant agricultural value chain is being affected by UDI (1965-1979) statist polices through both the @MoLAWRR_Zim & the Agricultural Marketing Authority (AMA).

ir.uz.ac.zw/bitstream/hand…

24/ Its thru the market-based pricing&marketing of agricultural products that this sector can be commercially viable, sustainable&vibrant.

The statist hostility towards a mkt system is killing farming!

Farmers' invitation of the Gvt without defining its role is destroying them

25/ When you see a farmer doing or not doing well, realise that the whole agricultural value chain is uplifted or affected the same way.

All parties in the three streams should play an active role to make the value chain commercially viable, sustainable&vibrant.

END

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