The Sunday News
Dr Paul Mwanse
AGRICULTURE still has the brightest prospects for Zimbabwe despite the multiplicity of challenges plaguing this critical sector. Before the land reform in 2000, agriculture ranked as the largest employer with 327 000 workers as of 1980, before these figures plunged to under 30 000, currently.
At its peak, the sector contributed a third of the gross domestic product, which has gone down to between 10% and 15%. This trend is also mirrored through subdued export earnings, and a reduction in raw materials feeding into the manufacturing sector, which is exerting pressure on the little foreign currency available in the country as industry resorts to imports.
Agriculture has been struggling to find its feet after the year 2000 for several reasons, chief of which being recurrent droughts that have hit Zimbabwe between 2002 and the 2018/19 cropping season. Despite its good soils and favourable climatic conditions, the country will struggle to unlock the potential it has in agriculture until it finds ways of getting around its funding challenges.
For the smallholder and communal farmer, government has — despite the restrictive fiscal space — gone out of its way to assist through the Presidential Input Scheme and Command Agriculture. In the 2018/19 farming season, 1,8 million households were targeted for support under this scheme with each household getting approximately 10 kilogrammes (kg) seed maize, 5kgs sorghum seed, one bag Compound D and one bag top dressing fertiliser.
There are about 7,1 million smallholder and communal farmers in the country, occupying a total of 21 million hectares. According to the 2011/12 Poverty Income and Consumption Survey, 76% of rural households are poor with 23% deemed extremely poor, which means that this unsophisticated group of farmers desperately need the Presidential Input Scheme for their sustenance, without which support they will remain trapped in a vicious cycle of poverty.
It is also the communal farmers who have been worst affected by the economic challenges gripping Zimbabwe, which also means that the Presidential Input Scheme now serves as a safety net for this vulnerable group.
To improve on the scheme’s shortcomings, inputs must be availed on time with Government strengthening its monitoring to eliminate abuse, similar to what happens in Malawi, Zambia and India, although very few in this group bite off the hand that feeds them.
Government also needs reliable partners such as Fertiliser, Seed and Grain (FSG) to get the job done, not just with its Presidential Inputs Scheme and Command Agriculture but other arrangements as well since it does not have the resources to acquire sufficient inputs, more so due to the foreign currency situation.
Having said that, the real transformation for the agriculture sector in Zimbabwe must happen at the level of the commercial farmer: Previously, Zimbabwe had less than 4 500 white commercial farmers, but the figure has ballooned to under 200 000 A2 and A1 farmers after Government took concrete steps to redress pre-independence injustices in the allocation of land through the agrarian reforms of 2000.
To get these new farmers to produce, Government introduced Command Agriculture in the 2016/17 farming season to ensure food self-sufficiency following the drought of the previous season; to boost agro-processing and manufacturing industries; to reduce the importation of raw materials, and increase production per hectare.
The scheme is targeted at farmers near water bodies who could put a minimum of 200 hectares under maize per individual. These were found to be 2 000 in total and each farmer was required to produce at least produce 1 000 tonnes of maize.
Each participating farmer was required to commit five tonnes per hectare towards repayment of advanced loans in the form of irrigation equipment, inputs, and chemicals, mechanized equipment, electricity and water charges.
Farmers would retain a surplus product produced in excess of the 1 000 tonnes. A scheme that currently comes across as the most suitable for Zimbabwe is the contract farming model which can be defined as agricultural production carried out according to an agreement between a buyer and farmers, which establishes conditions for the production and marketing of a farm product or products.
Typically, the farmer agrees to provide agreed quantities of a specific agricultural product. These should meet the quality standards of the purchaser and be supplied at the time determined by the purchaser.
In turn, the buyer commits to purchase the product and, in some cases, to support production through, for example, the supply of farm inputs, land preparation and the provision of technical advice.
Contract farming lessens the burden on the fiscus and taxpayer by shifting it to private players who must look for the funding themselves. It also leaves little room for arbitrage. Tobacco is one crop where contract farming has been a huge success.
According to the Food and Agriculture Organisation, well-managed contract farming is an effective way to co-ordinate and promote production and marketing in agriculture. It is an approach that can contribute to both increased income for farmers and higher profitability for sponsors.
When efficiently organised and managed, contract farming reduces risk and uncertainty for both parties as compared to buying and selling crops on the open market.
Critics of contract farming tend to emphasise the inequality of the relationship and the stronger position of sponsors with respect to that of growers. However, this view contrasts with the increasing attention that contract farming is receiving in many countries, as evidence indicates that it represents a way of reducing uncertainty for both parties.
Furthermore, it will inevitably prove difficult to maintain a relationship where benefits are unfairly distributed between sponsors and growers.
Dr Paul Mwanse is an agricultural economist who can be contacted at [email protected]
