Zimbabwe’s seed sector showing resilience despite frequent droughts
Seed Co. Ltd. depot. (Seed Co. Ltd. photos)
For more information, see the Fourth Quarter issue of Seed Today.
By Shem Oirere
The El Niño-induced drought that swept across Southern Africa in 2024 and the fluctuating Zimbabwean currency negatively impacted the performance of one of the biggest seed companies in the region a trend blamed for the decline in total seed sales and demand.
The 2024 annual report by Seed Company Ltd, formerly the Seed Maize Association of Zimbabwe before it merged with the Crop Seeds Association to assume its current name, says the drought has not only wiped out crops but also halted farming activities leading to low demand for planting material and scaling down of seed value operations to cut down on production costs.
The company says the El Niño-induced drought turned the period under review into a “year of significant challenges.”
The Worst Impacts
In fact, Reliefweb, a leading humanitarian information source on global crises and disasters, says in a recent analysis of the drought in Southern Africa the region “has experienced the worst impacts of the 2023-2024 El Niño and is facing the risk of a deepening and widespread hunger crisis.”
“Many parts of Southern Africa have endured the worst mid-season dry spell in over 100 years, marred by the lowest mid-season rainfall in 40 years,” it says.
According to the Reserve Bank of Zimbabwe “the El-Niño-induced drought, which has turned out to be more severe than initially anticipated is expected to impact negatively on the domestic economy’s growth trajectory.”
“The dry spell and high temperatures experienced since the beginning of February 2024 have greatly affected the 2023/24 summer crop which was generally fair in January 2024,” the bank said previously.
Seed Company Ltd. Challenges
For Seed Co. Ltd, the 2023/2024 period was challenging because of the El-Niño induced drought which adversely impacted its business and overall performance in sales and earnings.
“Seed production was significantly impacted by the drought, with yields anticipated to be one-third lower than projected,” the company says.
The company utilized its carryover stocks in the Zimbabwean market to meet local demand as well as address shortages in neighboring markets where it is active.
The performance of the company, and probably that of other seed manufacturers and suppliers in Zimbabwe, has also been impacted by the negative effects of the fluctuation of local currency as the government attempts to enforce new fiscal and monetary policy measures to address inflation and stabilize exchange rates.
“The exchange rate volatility continued to pose a substantial risk across all markets,” says Morgan Nzwere, Seed Co Ltd’s CEO, in the report to shareholders. “The tough operating environment saw total seed company’s inflation-adjusted turnover for 2024 declining by 20% to ZWL $813.7 billion, compared to ZWL $1,011.7 billion for the previous year.
“This decline was primarily due to a 27% reduction in volumes, attributed to reduced demand caused by the El Niño-induced drought in Zimbabwe,” Nzwere says.
Industry Performance
Despite Seed Company Ltd’s constrained growth for 2024, Zimbabwe’s seed industry has for the last few years been favorably rated, if previous reports on the performance of the four top crops of maize, sorghum, soybeans, and wheat is anything to go by.
For instance, a 2022 analysis of the Zimbabwe seed sector by the Alliance for a Green Revolution in Africa (AGRA) says the country produced 50,480 metric tons (MT) for maize seed, 4,487 MT for sorghum seed, 8,750 MT for soya bean seed, and 12,459 MT for wheat seed.
“The total available seed meets the national requirement for the four crops,” AGRA says.
Moreover, Zimbabwe’s seed market has done well among African countries when it comes to the quality of the variety release and registration process as well as in the development of the private seed sector.
“Zimbabwe’s varietal release system aims to ensure that only distinct, uniform, and stable varieties enter the country’s agricultural markets,” AGRA says.
“The public and private breeders are all well-informed about the variety release process and on average it takes about 18 months to release a new variety,” AGRA adds.
Government Support
Zimbabwe seed market players such as Seed Co. Ltd. have also taken advantage of the government support in streamlining and making transparent the process for seed importation and exportation.
All seed companies in the country applying to export or import seed have access to the government-established one-stop shop for the issuance of relevant permits.
AGRA, which analyzed the performance of the seed sector in many African countries including Zimbabwe, says the Southern Africa country’s seed companies imported 1,998.2 metric tons of seed for maize, sorghum, soya bean and wheat compared to 1,997.2 metric tons in exports of the same seeds.
The seed export/import trade in Zimbabwe is expected to grow driven by the recent decision by government to introduce a new currency together with business-friendly policies.
“The introduction of the new currency, together with supporting policies, is expected to bring about currency stability to anchor business and economic growth,” says Seed Co. Ltd. Chairman Pearson Gowero.
“Looking ahead, the group expects the newly introduced Zimbabwean local currency to provide impetus to economic stability and continued growth, fostering a conducive business environment,” the 2024 annual report by Seed Co. Ltd. adds.
A similar view has been taken by the Reserve Bank of Zimbabwe that said it is “recalibrating its monetary policy framework to re-anchor price and exchange rate stability and to boost confidence in the local currency.”
“With effect from April 5, 2024, banks shall convert the current Zimbabwe dollar balances into the new currency which shall be called Zimbabwe Gold (ZiG) to foster simplicity, certainty, and predictability in monetary and financial affairs,” the bank said early this year.
Meanwhile, Zimbabwe, with an estimated 1,091 agro-dealers, is yet to come up with a national seed policy as the country still depends on the 2021-2025 national development strategy with AGRA attributing the situation to “a lack of resources.”
The Future Outlook
The future of Zimbabwe’s seed sector looks bright as the government prioritizes increased food production especially if the anticipated favorable rainfall comes.
Currently, the Zimbabwean government is promoting agricultural mechanization and expansion of its irrigation capability to address the frequent droughts hence creating more opportunities for seed manufacturers and suppliers.
Moreover, under the government’s drive to embrace climate smart agricultural practices, seed multiplication has been given priority particularly of drought tolerant crops.
The multiplication according to the Ministry of Agriculture is to be done “through establishment of community seedbanks linked to established private sector seed houses.”
“This will allow for viable sustainable and climate proofed traditional grain seed production at community level, to support the commercialization of drought tolerant crops.”
And as Nzwere, Seed Co. Ltd.’s CEO, says, the future of Zimbabwe’s seed sector lies in the promotion of irrigation farming and the focus of the company and other players in the market is to “equip growers with irrigation infrastructure to ensure stable production amid ongoing climate change challenges.”
