(Last Updated on October 17, 2015 by Editor)
ZIMBABWE – A University of Zimbabwe agricultural economist has proposed the introduction of a levy to fund the Strategic Grain Reserve (SRG).
The SGR is the national grain reserve that cushions the country in times of food shortages.
Speaking during a Maize Marketing and Pricing workshop held in Harare recently, Dr Jacqueline Mutambara said depending on Treasury to fund the SGR was dangerous.
“The dependence on Treasury funding for SGR has proved unreliable under the current fiscal scenario,” she said.
“A dedicated fund for the SGR can be attained through the enacting of a statute, such as the AIDS Levy, to ensure some guaranteed funding for this strategic food security instrument.”
The proposal was immediately shot down by delegates with some saying it would “increase the burden on the already burdened tax payers”.
Dr Mutambara defended her position saying the move was worth trying so as to ensure food security for the country.
“Of course it will always be a chicken and egg thing because when we are proposing a levy, we are trying to find an alternative solution because we already see that we are in a mess.
“Maybe it will be informed by the cost benefit analysis when we go into the details of trying to analyse the current scenario and how it is costing society, particularly in form of delays in payments (to farmers), the interest accruing to the borrowed funds as we borrow money to finance the Strategic Grain Reserve and then we put it back to back with the scenario where we are still taxing the same public through a specific levy where we are saying this will contribute effectively towards paying the farmers on time so that they can go into the fields on time then on the margin we can be able to decide which policy scenario is yielding the best benefits, she said.
“But obviously, it is correct to say that a levy is going to be a burden on the society but we are still saying the society is already burdened, so it is a matter of trying to compare the magnitude of the current burden and the burden that will accrue to a new policy scenario that we are trying to propose then if this new scenario gives us less burden than the previous one, then we can say the new scenario is good or if it is the other way round, then we can say the old scenario was good.”
Agriculture, Mechanisation and Irrigation Development deputy Minister (Cropping) Davis Marapira, who attended the workshop, said while there was need to keep the SGR with enough grain, introducing a levy was contentious.
“There is again the need for SGR management policy or alternative financing for SGR that is why we are partially talking of SGR Levy, which l feel is another fight, he said.
The workshop digested strategies for ensuring food security. It was attended by various stakeholders from Government, industry, academia and the farmers.