Farmers in Chiredzi district did not grow sesame under Sidella Trading contract in 2016/17 season; they only grew it in 2014/15. Some of the farmers stopped producing sesame because they failed to secure a market since Sidella Trading did not come back after maturity of the facility
Most farmers failed to harvest sesame because of inadequate rainfall, high temperatures and high pest infestation.
In 2014/15 season Sidella Trading sold seed, lambda and acetamac to farmers and promised to come back and buy the produce at a price of $0.80 per kg. Farmers bought inputs voluntarily at a price of $9 per 3 kg. There was no signed contract between farmers and Sidella Trading as it was a verbal agreement. The agreement was that Sidella Trading would come and buy the produce and farmers were supposed to sell to Sidella Trading only.
Sidella Trading came late to buy the produce and they had reduced the price to $0.60 per kg. Most of the farmers refused to sell their produce to Sidella Trading and decided to sell through the black market at $1 per kg. Some farmers who sold their produce to Sidella Trading reported that the company paid them late. In addition, Sidella Trading did not come back to monitor and evaluate the progress of the program.
Hence the contractor failed to get the produce they expected from farmers due to inconsistence in their agreements. Farmers suggested that Sidella Trading should make prompt payments in order to attract more farmers and also consider increasing the producer price. Both parties (Farmers and Sidella Trading) failed to respect verbal agreement. This suggest that written agreements are essential in obtaining stable contractual arrangements. In addition, they signify better levels of commitment.
Discussion with Sidella Trading revealed that they received a loan of USD150 000.
In Chiredzi, they worked with 1000 farmers. In addition to inputs (seed, fertilizer and chemicals) farmers were trained on pre and post-harvest handling.
Sidella Trading had technical officers on the ground and used a lead farmer approach. On average farmers were getting USD0.70 per Kg. The company sold part of the product as grain, while some was processed to sesame oil.
Sidella Trading had some challenges in getting cash in time and therefore delayed in collecting produce and in paying farmers. This exacerbated the problem of side selling. Farmers are assumed to have sold their produce to traders from Mozambique, who were offering $1 per kg.
Sidella indicated that they gave farmers written contracts, however this claim contradicts the claim by farmers, who indicated that they had a verbal agreement.
On a positive note, Sidella indicated that the facility helped the company to grow (increase its capacity) by 90%. The loan they obtained under CREATE facility in 2014/15 accounted for approximately 90% of their operating capital. This enabled the company to take-off and establish sesame value chain in other districts.
The company is currently getting loans from NMB Bank and is looking forward to accessing the CREATE facility again. The company suggest that ZADT could provide some technical support to farmers and also monitor the facility before maturity so as to get a good picture on what is taking place.
Source: Case Study done by ZADT in 2017
