The Government of Eswatini Strategic Road map for Economic Recovery for 2018 - 2023, tasked The Ministry of Agriculture with driving the increase in horticultural crop production; where conventional vegetables would be increased from 8,000 MT to 20,000 MT by 2023 (2,500 MT/year) and baby vegetables from 2,000 MT to 4,000 MT by 2023 (400 MT/year).
In an effort to incentivise farmers to upsurge production, The National Agricultural Marketing Board has increased the minimum farmer off-take prices. This is effective immediately and in line with the turnaround strategy which focuses on Farmer Development. This increase is expected to relieve the farmer’s burden from high input costs which has seen fertilizer prices increasing by more than 100%, and improve productivity which had declined due to climate change. The capital costs of undercover structures (e.g. tunnels, nets, etc) is significantly high thus the need for an improved return from the crop becomes one of the ideal solutions.
Minimum farmer off-take prices serve as an indicative guide for farmers to establish viability of their farming businesses. By offering minimum prices, farmers are provided with a cushion that enables them to stay viable even when prices are falling in the market.
Extensive research and analysis has resulted in the shown picture, revised minimum farm gate prices, which show an average improvement of 31%.
The current minimum prices were last reviewed in 2014 and we strongly believe that the increase will turnaround the farmers’ businesses and improve the viability to a great extent. This is more so because some of the commodity lines have received an increase of about 50%.
To put the impact of the increases into perspective using the current gross margins; for example, potatoes had a 50% increase on the minimum price. This translates into an increase from E29,654/ha (42% gross margin) to E49,654/ha (55% gross margin). It is such healthy gross margins that can create wealth for our farmers.
As NAMBoard we have firm belief that this intervention will counter act the negative effects of the Russia-Ukraine war which has pushed a number of farmers out of business. We also believe that this move will resuscitate the interest of those farmers who had abandoned farming due to our low buying prices. We have confidence that these revised minimum prices will play a pivotal role in rejuvenating Emaswati farmers to go back into vegetable farming as a livelihood and in turn contribute to the country’s economy.