The Zimbabwean local management unit (LMU)
consists of the Project Manager (Mr. Dagmore Tawonezvi) and an administrative
assistant (Ms Beauty Nyamukonda). The project is under the Government
of Zimbabwe’s Ministry of Agriculture and the Ministry of
Industry and International Trade.
Progress in Zimbabwe
The main prerequisites of the WRS are in place:
Banks including Kingdom bank and Agriculture
Development Bank are ready to finance against Warehouse Receipts.
The Zimbabwe Coffee Mills (ZCM) has signed up
as a warehouse operator under the coffee pilot, while the Grain
Marketing Board (GMB), will provide warehousing for soyabean.
ITS-Socotec, a collateral management company,
is managing the receipted commodities and issues Warehouse Receipts.
Standard Warehouse Receipts have been printed
and are ready for use.
Participating farmers have been trained in coffee
and soyabean quality issues.
Coffee Sector Pilot
Zimbabwe’s coffee production is concentrated
in the mountainous Eastern Highlands of Manicaland Province.
Coffee plantations in scenic Eastern Highlands
A sizeable number of farmers are also located
in Mashonaland Province. Most coffee in Zimbabwe is commercially
produced, while smallholders, who account for approximately
5% of output, are mainly organised into producer associations and
collective groups. The smallholder groups participating in the WRS include
the Honde Valley Coffee Growers Association (HVCGA) and the Vumba
Agricultural Collective Cooperative Society (VACCS). The HVCGA consists
of nearly 500 members, most producing coffee on plot sizes ranging
from 0.5-0.8 hectares. The association was formed mainly to facilitate
crop marketing and inputs procurement. VACCS has 23 share-holding
members. All members, with the help of casual and permanent staff,
work and market their coffee together. In recent years, the area
under coffee production has decreased to about 24 hectares.
In previous financing arrangements, all smallholder
farmers would be advanced up to 80% of the coffee value by the coffee
mills at delivery. They would receive the rest of the money after
the coffee has been sold. This process, from delivering coffee to
the mill to when coffee is sold, takes on average a period of 2-3
months. The VACCS group, however, would not receive this inventory
advance, (as this does not apply to farmers on plots bigger than
20 hectares). Instead they would receive 20% of the value of the expected yield,
just soon after coffee flowering stage. Yield is estimated through
a triangulation process based on an assessment of coffee
flowers. Although this early financing helps to improve the group’s
cash-flow, both groups face considerable cash-flow problems as there
are big time lags between harvest and sale of coffee.
The WRS Project aims to alleviate these cash-flow
problems faced by smallholder farmers. However, this could not be
achieved during the 2004/05 pilot season because of declining output
and high financing costs.
Soyabean Sector Pilot
Soyabean is a commodity grown in many areas
of Zimbabwe, both by large and small scale producers. The WRS Project
Pilot in soyabeans is in Mashonaland West - Chinhoyi and Mhangura
Districts.
The soyabean sector offers a promising opportunity
to demonstrate that the WRS could be a viable means of marketing
agricultural commodities in Zimbabwe. In normal circumstances the
average period of storage of the collateralised stocks will be between
six and eight months, over which prices normally tend to rise significantly.
The WRS team is anticipating substantial deposits
during the 2005/06 pilot season. Sensitisation, farmer mobilisation
and quality training are the LMU’s main focus of activities.
Some producer promotional materials have been developed and used
for WRS. [PDF 326Kb]