Competitiveness of wheat production in Zimbabwe

Abstract

The main objective of the study was to assess the competitiveness of wheat production in Zimbabwe. Policy Analysis Matrix (PAM) was used to determine private and social profitability of wheat production and measures of distortion. PAM results highlighted that it is not competitive to engage in wheat production in Zimbabwe under the current policy framework. This is because wheat farmers are being taxed about US$654/ha, translating to about US$4 million nationally. Low productivity of about 2 t/ha has resulted in farmers not being able to break-even and meet their costs. Domestic Resource Cost (DRC) of −0.6 indicated that Zimbabwean wheat farmers are incurring high costs of production in comparison with regional competitors. Although Nominal Protection Coefficient on Output (NPCO) of 1.036 was observed, this is not adequate to cover for high costs of production. From the empirical findings, it is important for the private sector to engage in wheat production through contract farming. This ensures that the issue of high costs of production and delayed payments from the GMB (Grain Marketing Board) are addressed.