Mercantile Exchange to benefit farmers

ZIMBABWEAN farmers stand to benefit from the recently created Mercantile Exchange (ZMX) which will cut out middlemen and ensure that producers get value for their crops. 

The exchange enables farmers to deliver their commodities into designated warehouses where the commodities shall be weighed and graded and a tradable Warehouse Receipt is issued. 

The Warehouse Receipt is also acceptable as collateral by a number of banks and farmers can actually use them to secure short-term credit from participating financial institutions.

“The exchange allows farmers to sell directly to the ultimate buyers without the need to go through middlemen thereby maximizing returns. This is made possible by providing farmers with real-time information on prices, trading trends and volumes and ensuring transparent trading and payment systems,” the general manager of the ZMX Garikayi Munema told the Daily News on Sunday.  

“Some middlemen would go around in rural areas and buy agricultural goods at low prices and come to urban areas reselling at a higher price to make more money. The farmer will know the price and then decide the price they want to use without being duped by the middleman.”

The ZMX trading platform was established by the government together with Financial Securities Exchange (Finsec), a licensed securities exchange, TSL, a publicly-traded agro-industrial business and CBZ Holdings. 

“The application will be a guideline for farmers to decide which price they want which can be higher than the market price. They can also place their orders on the same platform for example they log on the platform as everyone knows the standard price.”

“The platform is accessible through various channels that include web applications and mobile applications. Farmers, therefore, have choices outside smartphones as even the simple phones do work on ZMX.” Munema said.

He added that farmers who are contracted would not be able to sell their goods before they pay contractors.

“The platform will make sure farmers first pay their dues; all the contracts will be entered in the ZMX so that when commodities are being bought, stop orders for contractors will be deducted first. The contracts have to be honoured first and this will benefit the contractor and farmer.”

It is estimated that every season Zimbabwean farmers lose as much as 30 percent of their harvest because of poor storage facilities. But with the coming of the ZMX, this is expected to change.

by Melisa Chatikobo