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Command agriculture: Is it really that bad?

14/12/2017 00:00:00
by David Mutori
 
Some thoughts on command agriculture ... David Mutori (above)
 
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THE government’s command agriculture programme has attracted a lot of debate, much of the critique however, premised on either the previous factional rows in Zanu PF or the traditional ruling party and opposition divide.

To begin with, calling the programme ‘command agriculture’ is a bit clumsy because the ‘command’ name has echoes of military and command economies where the state gives orders on which goods should be produced, quantities and the price that would be paid for those goods.

What is called command agriculture in Zimbabwe is essentially ‘import substitution’ contract farming that is aimed at ensuring food self sufficiency by contracting selected farmers to produce a set amount of the staple maize crop.

On paper the scheme is a noble idea. The problem is that a lot of the beneficiaries are not repaying the loans. Furthermore, some farmers expect to be given more inputs the following agricultural season despite failure to repay in prior periods.

Command agriculture scheme is also supposed to stimulate local production of seeds, fertilizer and other inputs. If correctly implemented, it could also stimulate production of irrigation and other farm equipment in the domestic market.

The diagram below shows how the scheme is supposed to work;

The original idea was for inputs to be availed to a select group of farmers with capability to produce. The selection of recipients was meant to enhance success rates and improve the chances of repayments. If those that benefit from the scheme pay back, lenders will have more confidence to finance the scheme in future years and this ensures that the process can continue.

On the face of it, the idea is noble and can work but it requires strong administration, monitoring and a degree of enforcement to ensure that farmers repay the loans. Each stage requires robust systems.

Firstly, there is a need to be clear about the criteria that is used to select recipients. It is important to ensure that recipients can produce and will be willing to repay the money they owed. The integrity and success of the scheme depends on commitment to the system and eradication of patronage.

Secondly, there needs to be mechanisms to ensure that recipients use equipment and inputs for the intended purpose to avoid selling of received inputs.



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Thirdly, and most importantly, it is critical to ensure that beneficiaries of the system pay back the loan at the end of the farming season. Repaying is a challenge because previous government schemes such as the ‘Operation Taguta’ (2006) and Gideon Gono’s ‘Agricultural Mechanisation Scheme’ set very bad precedents: they rewarded failure and did not penalise those who refused to pay loans.

The culture of viewing state support as a charitable benefit is now quite embedded and it needs to be tackled. Farming loans must be treated as borrowing that needs to be repaid and government must stop supporting farmers who do not repay loans.

Whilst the 2018 budget statement gave an upbeat view of the 2016/17 command agriculture outcomes, the detail is very worrying. Finance Minister Chinamasa pointed out that the government had received 66% of its target loan repayments however the details suggest that 33% of beneficiaries and repaid in full and 22% had made partial payments.

This means that close to half (45%) of beneficiaries had not repaid a cent and this is a very high proportion. Given that 2016/17 was a bumper agricultural season the high number of recipients who have not repaid suggests a high risk to the scheme’s future unless the government reviews and improves the loan recovery part of the scheme.

It is worth considering a credit rating type database to support the scheme otherwise the culture of patronage and entitlement can kill off an otherwise noble idea. The government must not write debt off, it must be carried on to subsequent years and interest must be charged on outstanding amounts.

David Mutori can be contacted on Twitter @DavidMutori or email address mutorid@gmail.com


 
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