Cash crisis discourages vital farming in Sudan

Farmers in El Gedaref said that the liquidity shortage will have dire consequences on the harvest. The sesame harvest is now in its early stages, but banks have refused farmers to wihdraw enough cash to pay employees and costs.

Farmer Haydar El Badawi told Radio Dabanga that the banks in El Gedare state have refused to give farmers more than SDG2,000 ($71*) a day. “This foreshadows problems between farmers and workers.”

The southeastern state is highly important for the country’s agricultural output.

El Badawi expected the sesame harvest to face a crisis in the coming weeks because of the looming shortage of labour. Ethiopian farmers who seasonally work on the farms in Sudan are “reluctant to come, because of the collapse of the Sudanese Pound”.

Recently a report confirmed that sesame fields owned by about 32 farmers amounting to 8,040 acres have been subjected to damage by spraying pesticide. More than 50 farmers in El Gedaref state had filed a criminal complaint for damage to vital crops by aerial pesticide spraying operations. Some of them state it’s an estimated 90 per cent loss of sesame.

Meanwhile, farmers in El Gedaref state also warned about the looming failure of the upcoming winter season because of the high price of fertilizers.

Farmer Abdeen Bargawi told Radio Dabanga that the price of a sack of dap fertilizer has risen from SDG450 to SDG1,350 ($48) and urea from SDG365 to SDG730 ($26). Bargawi said that a number of small farmers also refrained from farming because of the rising costs and the low prices of encouragement set by the Agricultural Bank (750 Sudanese Pound).

Leading economist Dr Sidgi Kaballo asserts that the ongoing liquidity crisis in Sudan stems from lack of confidence in the banking system and poor treasury cash-flow management. Sudan’s Minister of International Cooperation, Idris Suleiman, recently remarked that one of the causes of the liquidity crisis in the country is that 90 per cent of the cash mass is being circulated outside the banking system.

* Based on the indicative US Dollar rate quoted by the Central Bank of Sudan (CboS)