Input costs hamper agriculture competitiveness

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ZIMBABWE’S agricultural sector faces a major challenge from high production costs driven by expensive local inputs, a leading economist has said.
Ashok Chakravat told a recent business conference that this was hindering the country’s ability to develop a competitive agricultural value chain.
“We have productive farmers, but agriculture in Zimbabwe is expensive. You cannot develop an industrial value chain based on high-cost commodities. These have to be competitively produced.”
He emphasised the crucial role of competitive agricultural production in supporting domestic value chains.
“If you want to develop a value based on our domestic production from agriculture,” he stressed, “it has to be produced competitively.”
Chakravat pointed to fertiliser as a prime example, citing a joint analysis with the Ministry of Agriculture revealing that “fertiliser is 50 percent of the cost of production of the average crop.”

He criticised the current approach, which protects a decades-old, high-cost fertiliser industry at the expense of farmers’ competitiveness.
“The question is, do we want a fertiliser industry that is not based on origin and produces at a high cost, employing maybe 400 people, or do we want to support three million farmers to produce agriculture competitively and support all the agriculture value chain?”
He argued that clinging to outdated, inefficient industries hinders progress.
“We can’t just mindlessly accept them because some industry is there and we need to resuscitate it,” he asserted.
“That’s not the way we have to move forward, not backwards.”
Beyond cost, fertiliser quality presents another hurdle. Locally produced inputs often fail to meet international standards, deterring manufacturers from readily sourcing them. This compounds the issue of affordability and access for farmers.
With an average annual demand of 780 000 tonnes of fertiliser, Zimbabwe’s farmers face a constant struggle to manage their budgets in an increasingly volatile environment.
Rising input prices threaten their ability to secure essential resources for the upcoming season.
Agriculture plays a critical role in Zimbabwe’s economy, accounting for 12,6 percent of GDP in 2023 and contributing significantly to the projected 5,5 percent overall growth. However, concerns loom over the potential impact of an El Niño-induced drought in the 2023-2024 season.
This climatic event could shrink the agricultural sector’s contribution to GDP by 4,9 percent, pushing it down to a four-year low of 11,6 percent.
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