Seedy business: Govt owes seed companies US$62m, leaving industry in crisis

Seeds of discontent: Seed Co's Stapleford facility

The government got seed worth over US$62 million from seed companies and never paid for it, leaving producers in crisis in an already tough drought-hit season.

The Zimbabwe Seed Association, a grouping of seed companies, says its members are owed almost half of the payments for seed supplied to the government last season, while “nearly all” of the seed supplied this year has not been paid for.

“As an illustration, a total of US$61,778,000 is owed to eleven members of the association (Arda, Easiseeds, Farmbiz Genetics, Intaba trading, Klein Karoo Seed Marketing, Prime Seeds/Seed Co vegetables, Quton, Reapers, Seed Co, Tocek, Zimbabwe Technology Solutions),” the association says in a December 18 memo.

The government is the biggest buyer of seed, which it distributes to smallholder farmers under programmes such as the presidential input scheme. With no payment from their biggest customer, seed companies are defaulting on bank loans, laying off staff, and planning to scale back on production. Experienced growers are refusing to sign new contracts with seed companies because they have not been paid for 2023 deliveries.

“Relationships with banks are now at their lowest level; seed companies cannot be trusted and hence are failing to access favourable credit facilities including the productive sector facility,” the companies say.

Seed producers are unable to get the forex they need for imports such as hybrid seed of sunflower and sorghums and parental seed, which they say helps localised certified seed production. A request to government for US$15.5 million from six seed producers “so far got no response”, the seed firms say in the memo.

They warn: “Such financial distress is unsustainable and results in scaling down of operations, closing of seed companies and Zimbabwe will soon lose its status of a well-developed seed sector which has over the years ensured national seed security.”

Farmers have planted far less this year than they did last year due to the drought. According to government data, by December 10, farmers had planted just 95 156 hectares of crops, a steep fall from 465 707 hectares on the same day last year.

Seed Co, the country’s largest producer and the main supplier of government seed, has reported a 22% drop in maize seed sales in the half-year to September, as farmers cut back on seed purchases due to the drought while government delays its input schemes.