Reviving commercial agriculture in Zimbabwe

Reviving commercial agriculture in Zimbabwe

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By Dr Alex Magaisa

THE decline in agricultural productivity over the last six years ought not to be a source of surprise.

Given the way the state handled matters pertaining to agriculture, it was always foreseeable that problems would arise. The question is whether these challenges can be overcome in the foreseeable future. First however we need to acknowledge and understand the circumstances leading to this sharp decline. Not that there is much investigation that needs to be done – it is whether we are honest and have the necessary political will to accept the shortcomings, most of which are of our own making. There can be no solution when a nation, especially the leadership is in denial. No amount of sunshine journalism, exemplified by the usual grand predictions in the state media of “bumper harvests” or “normal rainfall season”, can change the reality when it is clear that productivity has been in sharp decline.

Let us look at some of the statistics as recently reported in the media. The Daily Mirror of 8th February 2006 quoted research conducted by Chemplex Corporation, the fertiliser manufacturer, on agricultural productivity in Zimbabwe since 1999. Almost all statistics point toward sharp decline in hectarage and production. For example in respect of tobacco, the prime cash crop, hectarage declined from 86 000 in the 1999-2000 season to 46 000 in 2002-03 season and stands at 35000 this current season. This is less than half of the hectarage for the major foreign currency earner before the invasions leading to the land redistribution exercise. In respect of commercial maize, the hectarage declined from 155000 in the 1999-2000 season to 60000 during the current season – decline of more than half. Yields have declined and the pattern is set to continue. The same holds true in respect of other commercial crops, dairy and beef farming. Since agriculture was the main driver of the economy, it is unsurprising that its decline has impacted heavily on the economic fortunes of the country. It is a classic case of killing the goose that lays the golden eggs.

There are a number of factors that account for this sorry state of affairs:

Much has been said of the problematic land issue. Clearly, the post-2000 land policy lies at the heart of this phenomenal decline. The purported redistribution has only effectively benefited a few well connected individuals resulting in a simple forced transfer from the white farmers to privileged blacks most of whom are multiple farm occupiers which exposes the fallacy of the principle of equitable redistribution used to justify the exercise. The President himself has spoken against those who took more than one farm. Yet nothing has been done to resolve the situation. The result is that much of the prime land is in the hands of a few people, with multiple interests and less attention toward farming. The so-called new farmers are simply not putting land to full and efficient use. To a large degree land was taken from those who used it efficiently for farming purposes and given to those of privileged status who hold it simply for sentimental reasons or when time permits, to use it as braai- spots. Instead of empowering people and land being the driver of the economy, its misuse has become the principal cause of economic decline and therefore the disempowerment of the generality of the population. And yet some old heads still persist with the land displacements.

Second, the current legal structure pertaining to land tenure does not support commercial agriculture. The government does not seem to appreciate the factors that made commercial farming so successful before. They probably never did any research to understand why commercial farming was a viable. It was not simply that the farmers had rich land – that is just one factor among many that have been ignored. For example, the legal structure enabled commercial farmers to pursue farming as a proper business. The crux of the matter is that in any business you need access to capital and to achieve that you need to offer security to the source of capital. That is where the system of property rights played a crucial role. With secure property rights farmers could create relationships with the finance industry to provide capital and other resources necessary to support their businesses. Loans, leases of equipment, insurance, et al form part of the core legal and financial architecture that is necessary to help farming a viable business venture. These cannot be available in a scenario, as is now the case, in which there is so much insecurity and uncertainty over property rights. Many financial institutions lost huge chunks of their assets related to loans and facilities they had advanced in their relationships with the farming industry. How can the state persuade the commercial institutions to return to the agricultural sector when the situation of property rights is not clarified? This probably explains why the Reserve Bank has imprudently turned into a quasi-commercial bank, dishing out loans to support the agricultural sector, a task that is well suited to commercial financial institutions.

"No amount of sunshine journalism, exemplified by the usual grand predictions in the state media of 'bumper harvests' or 'normal rainfall season', can change the reality"

DR ALEX MAGAISA

The good thing about giving proper title to land is that it builds one’s personal responsibility for that property. To be sure, government subsidies may be necessary to build capacity and help new farmers with teething problems. Indeed, state support was also necessary to build agricultural capacity during the colonial period. Nonetheless, unless closely monitored, cheap finance creates a dependency syndrome and builds complacency. The moral hazard is that land users will tend to lose responsibility and will instead place over-reliance of the state. “Mari yehurumende” (Government loans) is a much-abused phenomenon. We have heard many call it “imari isina munhu” – that is, the money is free for all. It is not surprising that the central bank’s assistance has been abused and used for corrupt activities. If one does not suffer personal loss there is very little incentive to do the right thing and bear responsibility. If these people who have generally abused the facility stood to lose out on their land holding or other personal assets, there is every chance that they would allocate the resources efficiently. Clearly the current legal structure in relation to land is inimical to any efficient allocation of resources that is necessary to support commercial agriculture.

In addition, the necessary support industries that help to sustain commercial agriculture are either redundant or in a very poor state. I have already argued how the finance industry is a linchpin in commercial agriculture. But farming also needs industries that provide inputs such as fertiliser, seed, agro-chemicals, equipment, etc. Chemplex reported a drop in the national production of the essential Ammonium Nitrate fertiliser from 550 000 tonnes in 1999 to 300 000 tonnes this season due among other things to a lack of foreign currency. Those that are available are expensive and out of the reach of many farmers. Now clearly, these shortages are directly connected to the poor economic and political conditions prevailing in the country. Unless the political challenges are overcome it is highly likely that the economic difficulties will continue to escalate. The unavailability of these inputs will therefore remain a problem for the foreseeable future. Clearly, the success of agriculture hinges in large part on overcoming in a sober and reasonable way the existing political challenges.

Much has also been said about the effect of the unpredictable weather conditions. In particular, the government often blames drought for the poor state of agriculture. While the effects of drought cannot be dismissed in some parts of the country, they have also been overstated, to the point perhaps of diverting attention from the key shortcomings that have debilitated the agricultural sector, most of which are objects of human construction. There are ways to deal with the drought such as building sufficient water reservoirs and developing crop varieties that are suitable for the conditions. These and other mechanisms have always been put to use in the history of commercial agriculture in Zimbabwe. The poor weather conditions are not new to Zimbabwe and while commercial agriculture has suffered during the bitter droughts such as in the early 80s and early 90s, farmers generally managed to cope during other low rainfall seasons because they had made preparations for such eventualities. For as long we blame drought for all the difficulties in agriculture, we can never develop because the weather patterns are likely to remain unpredictable if not worse in the coming years. The challenge is to learn how commercial agriculture devised ways of mitigating the effects of drought.

Furthermore, there is also a dearth in research and development. The research stations around the country have done well in research and development to serve agriculture over the years. As with any industry it was realised long back that there is need to continually innovate and develop new ways in agriculture. From seed and equipment to techniques, research stations have played a key role and need to be supported by the industry and the state. A chief element of R&D is the expertise, which continues to drain away as people leave for pastures new. I refer here to the farmers, the research scientists and experts in related industries who have been driven away by the political and economic difficulties. If the state is serious about reviving agriculture, there is need to swallow some unnecessary pride and bring back or retain the expertise that is necessary for the success of agriculture.

In a nutshell, the state must recognise that commercial agriculture is essentially a business venture and like any other business requires appropriate conditions for success. We do not need to return to subsistence farming. We spent years toiling and trying to get out of that system. The legal and financial architecture must be designed in such a way as to support agriculture from a business perspective. The colonial system had its problems, but perhaps a few lessons could be drawn on how to support and build commercial agriculture. Unfortunately, some people take farming as a hobby and do not take it seriously as commercial business. Sadly, this fall has led some people to suggest that black Zimbabweans are generally incapable of farming. That is not true. The lazy and greedy people who grabbed multiple farms are a mockery to the hard working and suffering peasant who toiled on poor land for years, producing enough for himself and his family, and with better opportunities could have achieved more. The peasant farmer was willing to learn and knew that the land provided for his survival. In many cases he even had a fruitful relationship with the commercial farmer, learning new techniques and improving his lot. All he ever needed was a share of the good land and better resources but he has got nothing. But the man of high rank, his wife, his son, his daughter, his grandchildren, his nephew, his aunt, his distant cousin and his wives, sons and daughters have each got a decent farm … and they are doing nothing on it.

Time must come when people replace the sentimental value they attach to land, with the commercial value that it must be rightly accorded. Ultimately, everything depends on whether those wielding power have the necessary political will to effect the necessary changes to return to the golden days of agriculture. I do think that it is possible to learn from past mistakes and start on a clean slate. Where there is a will, there is hope.

* Dr Magaisa is a financial services lawyer and can be contacted at wamagaisa@yahoo.co.uk
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