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Eddie Cross: The Farm Crisis in Zimbabwe

Zimbabwe is not an easy country in which to farm. We have a very high mean variation in annual rainfall, two thirds of the country are arid or semi-arid and our wet season is short – from about 15th November to March, just 4 and a half months.

We have to store water for the long dry season and to make things more difficult, we are one of the countries that are listed to be most impacted by the predicted changes in the weather. Certainly, in recent years our weather seems to have changed with more extremes.

When my forefathers settled in this country after 1893, they started farming and soon found that it was a tough game. But over the next 100 years they learned how to handle the difficulties and were able to establish an industry here with about 5 000 large scale commercial farms on 12 million hectares of land, perhaps 25 000 small scale commercial farms on another 3,5 million hectares and about 700 000 peasant farmers on another 18 million hectares.

In 1993, the farmers here fed the country at prices below regional levels, we were nearly completely self sufficient in all basic foods except perhaps wheat. At the same time the industry provided subsistence to half the population and employed perhaps 350 000 workers on a full time basis and perhaps the same number in temporary seasonal employment. Our farmers generated half our exports and in some sectors were globally important. The industry had been the largest contributor to our national economic growth in the years since Independence in 1980.

The following collapse started in 1997 when a number of major events put the national economy into a downward trajectory that ran until 2008. It started with the unbudgeted payment of Z$3,5 billion to war veterans and then the commitment in the Congo to remove Mabuto and replace him with Kabila – an exercise that was to involve thousands of troops and our air force and heavy weapons. It cost us US$1,5 billion and as a result we lost the support of the multilateral financial agencies.

Then came the land reform program, launched by Mr. Mugabe to control the commercial farming districts politically. Nearly all remaining commercial farmers had their land and other assets nationalised and were replaced with politically connected settlers – 18 000 A2 and 140 000 A1 farmers, the former on subdivisions of the original farms and the latter on small farms of 10 hectares or less. It was a disaster.

By 2005 we were importing three quarters of our needs for farm products. We had at least half our population on food aid and the rest of the economy, majority dependent on the farmers for raw materials and sales, collapsed like a row of dominos. The economy went into a tailspin and the local currency collapsed. Our banks were technically bankrupt and when the regional leaders forced us into a Government of National Unity in 2009, the international community, led by the United States, fed three quarters of our population for a year to stabilise the country while we tried to sort ourselves out.

During the GNU our formal economy recovered rapidly, we dollarised and became a supermarket for the region. After the devastation of the collapse 2005 to 2008, we felt relieved that we could again buy bread and fuel in a store or filling station. Our incomes recovered to a reasonable level where we could just live (my salary in 2009 as a Member of Parliament started at US$50 a month and was US$2000 a month by 2013).

But our productive economy did not recover. By 2013, 95 per cent of what you saw in our supermarkets was imported, our farm economy remained in a complete shambles, only the tobacco sector recovered, funded and organised by the big international tobacco companies who wanted our style of tobacco for their blends. Then in 2013 Mr. Mugabe took back full control, macroeconomic malpractices resumed and, if anything, matters once again began to unravel with no changes either in agriculture or industry.

Then came 2017. Mr Mugabe was forced into retirement and was replaced by Mr Mnangagwa, a loyal associate of Mr Mugabe for the past 40 years. He quickly laid out a program of political and economic reform designed to revive the economy and restore economic stability. This had a slow start with many elements in the country opposed to reform less it disrupt the systems that had given them new wealth and power.

But after a rocky beginning, the reform program is starting to show real results. Our economy is growing rapidly fuelled by high international commodity prices and increased domestic investment and activity. Over 60 per cent of what you see in our supermarkets is now locally produced and there are signs of recovery in agriculture. But problems persist.

We have been unable to get our monetary policies on track, this is in sharp contrast to the fiscal policies which are now in line with global norms. Money supply still spins out of control and rapid depreciation of our local dollar, despite the existence of a technical balance of payments surplus, is again driving our economy towards hyperinflation, something I thought was impossible a few months ago. But our most immediate crisis is again in agriculture, still the most important element, in our economy and the main support system for our population.

We have had a lousy season – adequate rainfall but the distribution was about as bad as it could be – good planting rains in November, followed by a dry December, then a wet January and a dry February – now rain right into the reaping season.

Crop yields will be well below last year – about half of what we got in 2020/21. South Africa has had too much rain and the weather has not been kind to Zambia or Malawi.

So, we will have to import a great deal of the maize we require, oil seeds and crude oil and it now looks as if we will not get even half of the wheat crop we grew last year because of funding problems and shortages of essential inputs, including power for irrigation.

Globally nearly all basic commodity markets for agricultural products are experiencing shortages and supply chain disruptions. Shipping costs have trebled and we are not going to find it easy to secure what we need. We normally buy our hard wheat needs – about 150 000 tonnes a year, from Ukraine. This is just one of the problems that confront us today. The shambles in our money market does not help.

What do we need to do to get our farm industry back on its feet? In my view the essential are as follows: –

First, fix our money market. I may sound like a broken record but this is not rocket science. Nearly all of Africa has already done what is necessary.

In my view we need to use our own dollar for all domestic transactions, convert all incoming foreign currencies on a real interbank market and lift all exchange controls.

Secondly, give our new farmers real security of tenure so that they will invest in the properties they occupy and not simply mine the land for a living; be able to borrow what they need to farm against the security of their farm assets. This is close, I have seen the new 99 year lease and I think this just about does it, but why 48 pages of legalese? Just use the Zambian lease – three pages.

Thirdly, work with our banks to provide the seasonal and longer term funding required to farm properly.

Finally, get the industrial industry, that previously supported our farmers with all inputs, farm machinery and markets, back on its feet.

Of course, there is much more needed, but these four issues are the fundamentals – if we cannot do this, then we will continue to wallow in poverty and to experience shortages and high costs for products that we are otherwise able to produce ourselves at globally competitive prices.

Eddie Cross is a former opposition MDC MP for Bulawayo South and a respected economist. You can follow his blog African Herd