The government of Zimbabwe has allocated a total of $100.7 billion to the Ministry of Agriculture. Finance Minister Mthuli Ncube allocated the funds in his medium-term budget and said the resources were earmarked for grain supply, preparations for the upcoming summer rainy season and construction of dams.
The allocation comes after he revealed that the agricultural sector is now expected to contract by 5% this year, compared to the originally forecast expansion of 5.1% due to poor rains, bottlenecks in the distribution of inputs and the high cost of inputs, among other challenges.
“Almost all sectors of the economy are expected to register positive growth, with the exception of agriculture, which has been affected by the uneven distribution of rainfall, bottlenecks in the distribution of inputs and the high cost of inputs, among other challenges,” Ncube said.
“These developments have led to substantial planted area losses of more than 23%. As a result, the agricultural sector is now expected to contract by -5%, compared to the originally forecast expansion of 5.1%.
Agricultural index insurance
Despite the many risks and shocks affecting the performance of the sector, Ncube said insurance coverage for agricultural activities remained very low with insurance premiums at less than 3% of the total gross premiums generated by the agricultural sector. insurance.
In this regard, he said the development of agricultural index insurance, which started in early 2022, is expected to be launched in the third quarter of this year. This initiative will lead to the development of a regulatory framework for agricultural index insurance, establishment of knowledge exchange forums, as well as capacity development in agricultural index insurance, including innovative insurance solutions for smallholder farmers.
Agriculture is the backbone of Zimbabwe’s economy, providing jobs and income for 60-70% of the population, supplying 60% of the raw materials needed for the industrial sector and contributing 40% of export earnings total. The sector also contributes around 17% of the country’s gross domestic product, according to the Food and Agriculture Organization of the United Nations.