Can joint ventures and sub-letting unleash Zimbabwe’s agricultural potential?

The under-performance of parts of Zimbabwe’s agricultural sector continues. This mostly applies to large estates and some medium-scale farms that were reallocated under the fast-track land reform as A2 resettlement farms. Last year, as part of the economic reform agenda, the government has responded by approving measures that allow joint ventures (JVs) and sub-letting with the hope that this will encourage investment, foster skills, increase mechanisation and release finance for improving productivity.

A useful paper by Prosper Matondi of Ruzivo Trust came out recently that discusses the issues. Building on past practices of tenancy arrangements in large-scale commercial farms, ever since land reform, joint ventures with external investors, former white large-scale commercial farmers and others has been on-going, but frequently very much under-the-radar. Former president, Robert Mugabe, was very much against the idea, fearing that such arrangements would reverse the gains of land reform, allowing former farmers back onto the land. Selective agreements were made, notably with Chinese investors in tobacco, but otherwise deals had to be struck informally or at a local level with district approval but without wider publicity.

JVs on state farms: state assets for private gain?

In 2014, with state farms in crisis, the Agricultural Rural Development Authority (ARDA) was encouraged to lease out its land to private investors and broker joint ventures on all parastatal-held land. This now involves 24 farms across the country, all of which are now running as commercial ventures, with a variety of investors, based on 5-20 year partnership arrangements. The transparency of such deals has left much to be desired, however, and state assets have been deployed for private gain, with some particular firms, such as Trek Petroleum (which Trafigura/Sakunda has a stake in), having powerful political backers. This was a hidden land ‘reform’ on a large scale, and while hailed as a route to recapitalisation of state farms can also be seen a source of elite capture.

An earlier blog discussed this move, raising questions as to whether this is the appropriate use of parastatal resources and capacity. New public-private initiatives around strategic investments in sugar for biofuel are proposed for the areas around the new Tugwi Mukose dam in Masvingo province. This follows on from the Chisumbanje deal in the Save valley, involving the notorious ZANU-PF supporter, Billy Rautenbach, whose Green Fuels company took over around 10,000 hectares of ARDA land for a mix of estate and outgrower production of cane in 2009.

Partnership farming in land reform areas: boosting production on A2 farms

Perhaps more interesting than these large-scale state transfers, often to well-connected companies, are the smaller deals that can now unfold with land reform beneficiaries on resettlement land. While the Ruzivo paper notes correctly that the new arrangements open up opportunities for joint ventures or sub-leases on any type of land, this is most likely to happen on A2 land, as A1 smallholder areas are well utilised and often highly productive. It is in the A2 areas where investment has been lacking and there is a dire need for recapitalisation. To date, the lack of financing has been the major constraint to success in most A2 farms without external sources of capital.

Existing JVs show the potentials. In our study areas in Mvurwi, we have been following a number of arrangements, including six involving Chinese investments and several involving local investors. Chinese investors have usually come through the Chinese tobacco contracting company, Tianze, that operates widely in the area, or have made deals with banks who have taken control of properties due to non-payment of loans. They have clear contractual arrangements, usually over 20 years or more, for full management of the farm, including taking over all property, the workforce and so on. A wholly new operation is established, often with significant new investment in irrigation (centre pivots), mechanisation (tractors etc.) and processing facilities (rocket barns).

Very often they are employing consultants and farm managers who have worked in the tobacco industry for years to assist them, as the companies investing are often Chinese provincial companies with diverse portfolios often not involving tobacco. While the financial performance of such operations is of course not known, many comment that the prospect of turning a profit is remote in the initial period, and investors need deep pockets. Chinese company officials working on such farms comment that the business conditions in Zimbabwe are so bad that they wonder if they will survive, and some are diversifying into mining and other operations to spread risk.

Such JVs contrast with those established more informally, often involving a former white farmer or an urban business person going into partnership with an existing A2 land reform farmer. The farmer may still be resident and farm some of the area, in line with their means, while the investor takes over the larger portion of the land. When relationships are good and trust is built up, these seem to work well. They are still few and far between, but the potentials are significant, as many farms have spare land which could easily be sub-let. As noted on this blog before, there is much debate in Zimbabwe about the ‘under-utilisation’ of land, and certainly joint ventures can help reduce this, increasing capacity. However, contrary to the Ruzivo paper, which generally paints a rather dismal picture of post-land reform areas, there is certainly not as much as 60% of land available for use across A1 and A2 resettlement areas.

Another JV mentioned in the paper, but not seen so prominently in the areas we work, is seasonal short-term land sub-letting for a particular crop. Here, land across many farms is let for – say maize – and the company is in charge of inputs, marketing and providing equipment. This returns some of the scale advantages of large-scale farming but distributes risk across multiple producers, much as does contract farming, now familiar in cotton, tobacco and some other commodities. This may have potential for some crops in some places (mostly likely where there are large concentrations of A2 farms), but the management and logistics of operating multiple contracts over many farms is considerable, and current conditions certainly would make this a very difficult business proposition.

Navigating bureaucracy: practical risks of JVs

Perhaps the most interesting part of the paper for me was the discussion of the risk of joint ventures. You can see the economic rationale clearly. One party has an asset (land) and the other has another asset (finance – and/or skill, equipment etc.) and it seems like a win-win. Until you try and get the arrangement formalised that is. A neat diagram in the paper (Figure 2.1, page 7; see below) encapsulates the challenges, and multiple risks, involved in negotiating a joint venture. The complex bureaucracy of land administration, across national and district scales, combined with the multiple legal frameworks (discussed at length in the paper) make the prospect daunting to say the least. No wonder Chinese investors have gone to powerful individuals and negotiated directly, while other arrangements have remained hidden and informal.

If JVs are to be a feature of Zimbabwe’s agricultural landscape, building an administrative system fit for purpose and, through this, building trust that it can work efficiently, and without the risk of sudden reversals and political interference, is vital. The government can go on and on about the importance of ‘unlocking value’ and ‘facilitating investment’, but unless the system is easy to navigate and is transparent and accountable, then many will continue to shy away, and the opportunities to invest in agriculture will remain on paper, but seldom realised in practice.

This post was written by Ian Scoones and first appeared on Zimbabweland

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Sugar scandals in Zimbabwe’s lowveld

While visiting our research sites in Mkwasine and Hippo Valley in Zimbabwe’s lowveld recently, there was only one topic of conversation among sugar farmers we have been working with in land reform areas: the scandal that has overwhelmed the South African sugar firm, Tongaat Hullett.

A forensic audit by Price Waterhouse Cooper (PwC) uncovered massive accounting irregularities and the report named most of the top brass of the company, including the top team in Zimbabwe. What’s more, the accounting audit identified land acquired for land reform as an asset that shouldn’t be on the books, immediately wiping billions of Rand off the company’s value.

This episode has sent shock-waves through South Africa’s corporate sector. The company was delisted from the Johannesburg stock exchange, all those implicated have been removed from their posts, and there are potentially criminal charges pending. Not surprisingly, big questions are being asked about the companies that previously audited Tongaat’s accounts.

Sugar deals: alliances between state and capital

Tongaat Hullett is the owner of Triangle estates and mill and the major stakeholder in Hippo Valley, having bought out Anglo-American’s shares. A total of 640,000 tonnes of sugar can be produced per year from two mills. Since the late 1950s, this has been a strategic contribution to the national economy. Ever since the sugar industry was first established in the lowveld with 100 hectares planted by Murray McDougall in 1937, the companies involved – first MacDougall’s Triangle company, then the Hullett company from 1957 then conglomerate, Tongaat Hullett, later – have been a central part of the lowveld political economy. In the estate museum there are pictures of company executives and colonial governors, prime ministers or presidents from the early colonial era to the present. The state indeed invested substantially in the sugar industry – building dams, creating canals, levelling fields and offering land. The state and sugar capital have always been intimately intertwined in Zimbabwe (see the brief history in our open-access JSAS paper).

This was certainly the case during land reform when deals were struck to protect the core estates from land invasions. Concessions were offered and the white and Mauritian outgrowers were expelled in favour of new A2 farmers, but the main business was protected. By all accounts this was agreed at the highest political level. Since then the company has been cajoled into make further concessions, releasing cane land for those local invaders who felt that they had lost out in the early 2000s, and again recently a major new initiative has been started, opening up new land for outgrower cane, and the settlement of more people.

When we started our work in the sugar growing areas in the early 2000s, soon after land reform, the company executives were dismissive of the resettled farmers. How could they possibly grow cane at the level and quality that the estate does? As our work has shown, they have been surprised. Yield levels are comparable to the estate and the outgrower sector is delivering a significant proportion of the cane. With risk transferred to outgrowers and the company acting as a monopoly buyer, this has worked out well for the estate.

But farmers and the company have not always got along well. The company has monopoly market power and sets the terms (even if these are quite good by regional standards), and the exposure of the level of dodgy accounting by PwC has only acted to enrage farmers. For them, this proves that they are being ripped off, and that the company fat cats are benefiting, while they suffer. Growing sugar is hard, and made harder, especially for those in Mkwasine area operating outside the estate, as water and electricity supply is challenging, given the decline in infrastructure. For them, not only the company, but the state – always seen to be in cahoots – are to blame for their plight.

Plantation life and empire economics

Sugar plantations have always been central to the economics of empire. Linked in some parts of the world to slavery, land expropriation and exploitation, sugar, global capital and colonial states are intimately entwined, as Sydney Mintz has so eloquently written about in Sweetness and Power. Yet plantations also have connotations of modernity and progress, creating order and wealth in marginal areas, and with this gainful employment and an export commodity that boosts national economies.

Being in the lowveld sugar areas you can feel this. The emerald green sugar cane is laid out in neat blocks, and the busy efficiency of the tractors, haulage trucks and mills give a sense of unified purpose. The massive engineering works that have gone into ensuring continuous supplies of water to this otherwise dry land are witness to state commitment, with canals criss-crossing the landscape, and the area dotted with sluices, check-dams and ponds. Meanwhile, the country clubs, the golf courses, the manicured village greens, the cricket creases, the football teams and the schools named after sugar heroes of the lowveld, present a sense of another world, beyond the mayhem of contemporary Zimbabwe. The massive Tongaat billboards on the roads welcome you to an almost sovereign space, beyond the nation, with its own rules and security forces.

Plantation life is often a separate existence, where you are provided for; as long as you commit to the deal with the company you can be housed, educated, medically cared for and provided with a job. The remuneration may be poor and conditions bad, but there is not much else among the dry baobabs of the lowveld.

The outgrowers, begrudging and forever complaining, have by-and-large accepted this incorporation into this company world. Many have done well from sugar, faring considerably better than their counterparts on other A2 farms, and with better deals than other sugar producers in the region (see our JSAS special issue on the political economy of sugar in southern Africa). Learning the ways of sugar, and its seasonal cycles, has taken some doing, and many have diversified to avoid total reliance on one commodity, but our data show significant levels of income from most. And this is much more than the pathetically remunerated government jobs that many retired from.

Yet the accounting scandal has upset this accommodation. People are angry at being ripped off. And dodgy accounting is resurfacing resentments around land politics. Noone is very clear about who actually owns the land that sugar wealth is built on. For land reform areas it is clearly state land as it was expropriated, but the estate as whole does not have clear land titles. It was always an accepted arrangement that the estate provided a strategic industry, valued and supported by the state, and lowveld land was cheap and plentiful. But forensic accounting doesn’t take account of vague agreements struck in the early twentieth century, and the deregistering of land reform land may have opened up a larger can of worms, as land rights and control in the lowveld sugar areas are renegotiated.

Sugar and power

What this episode once again exposes is that sugar and power are intimately linked. The state and sugar capital have worked together across regimes in Zimbabwe, incorporating outgrowers – white, Mauritian and more recently black – in this bigger project. The order of the estate, with its facilities and regimented control – meant that a colonial style status quo could be preserved long into Independence, no matter how loudly outgrower farmers shouted or local politicians agitated.

When updating investors in December, Tongaat Hullett tried to put a brave face on the scandal, suggesting that they’d turned a corner, everything had been rectified, and that all would be OK. There is a prospect that the company will be listed again on the Joburg exchange today. But, in the last months, the accounting scandal has changed the game in Zimbabwe. When dubious corporate accounting and colonial land politics get mixed up, things get messy. With Tongaat bosses allegedly fiddling the books to get bigger bonuses, the fragility of the long-running arrangement between state, capital, outgrowers and local populations has been seriously tested. Farmers are more vocal about their rights and demand a greater share from the company. And estate land, and perhaps other assets, are now being contested in ways that they haven’t been since MacDougall’s planting of the first sugar in 1937. An accounting scandal has created a whole new politics in the lowveld, which is likely to run and run.

This post was written by Ian Scoones and first appeared on Zimbabweland

 

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UK-Africa trade and investment: is it good for development?

Just ten days before Brexit is declared, the UK is hosting a major investment summit, attended by the PM, Boris Johnson and an array of royals. There is much hype about the event (check out, #UKAfricaSummit, #InvestinAfrica, for example), with hopeful, win-win-win rhetoric abounding, linked to forging new partnerships for a post-Brexit future. Ghana, it seems, is being given top treatment as a favoured destination, while despite being ‘open for business‘, Zimbabwe seems to have been snubbed.

UK aid policy these days is very much focused on promoting UK trade interests abroad. Whether DFID survives as a separate entity or gets incorporated into the Foreign and Commonwealth Office will soon be known; but whatever happens, the UK government has adopted a global business promotion approach for UK firms, on the assumption that this will help meet the SDGs.

I have no objection to private sector investment and trade, but quite whether all such initiatives meet the criteria we assumed were central to UK aid policy is another matter. Indeed, questions have been raised about the allocation of funds to some quite dubious outfits. The linking of aid and trade of course has a history in Britain. Remember the Pergau dam controversy, when aid was used as a sweetener for a deal (in this case for arms)? This scandal of course led to the commitment to untie aid, a separate development department with a cabinet minister and an Act of Parliament specifying how aid must be spent. This consensus on aid since the mid 1990s however is under threat.

Trade and investment can of course help reduce poverty, promote women’s empowerment and be good for children’s rights, as the gloss from DFID suggests, but the opposite may be true too. There are many different business models – and so labour, environmental and rights regimes – with very different outcomes for ‘development’. We’ve been looking at some of these issues over the last few years across a number of projects (in fact all with DFID funding), and there are some important conclusions, relevant to the new UK government’s focus for aid.

The project, Land, Agriculture and Commercial Agriculture in Africa (led by PLAAS), compared three broad types of commercial agricultural investment. These were estates and plantations, medium-scale commercial farms and outgrower schemes. The team worked in Ghana, Kenya and Zambia and looked at each business model in each country, examining the outcomes for land, labour, livelihoods and so on. The cases included investments with some UK-linked companies, including the much-hyped Blue Skies company in Ghana, which packages and exports fruit produced by smallholder outgrowers. There is also the rather bizarre sugar outgrower scheme in Zambia, operated by Illovo, now largely owned by British Foods, whereby smallholders’ land is incorporated into an estate, and they are paid revenues for the use of land. The full set of publications was produced as a special Forum in the Journal of Peasant Studies, with an overview, and papers on Ghana, Kenya and Zambia.

Our findings showed that the ‘terms of incorporation’ into business arrangements really mattered. Too often estates/plantations operated as ‘enclaves’ separated from the local community, possibly providing employment opportunities, but frequently with poor conditions. Those investments that had substantial linkage effects included those with smallholder-led outgrower arrangements, where leverage over terms was effective. Meanwhile, consolidated medium scale farms potentially had positive spillover effects into neighbouring communities through labour, technology and skill sharing linkages.

A decade ago, at the height of Africa’s land rush, many such investments were deemed to be ‘land grabs’, but our work as part of the Future Agricultures Consortium argued for a more nuanced assessment of what works for who. Not all investments are bad, but not all are good either. Linking investment to the FAO’s ‘Voluntary Guidelines’ is essential, as this allows investors, governments and recipient communities to make balanced appraisals, avoiding investment riding roughshod over local land rights and livelihoods. Our review of the Guidelines for the LEGEND programme, highlights what is needed.

Another project, part of the Agricultural Policy in Africa (APRA) programme, has focused on agricultural investment corridors in Kenya (LAPSSET), Tanzania (SAGCOT) and Mozambique (Beira and Nacala). Alongside Chinese, Brazilian and other investors, UK investments are evident in all sites, notably through support from AgDevCo and UKAID in the Beira corridor (although many initiatives have been affected by Cyclone Idai during 2019).

Again, our findings highlight the design of corridor investments, and the importance of facilitating a ‘networked’ approach, with multiple linkages from the core investments (usually around infrastructure, large estates and mining) to the wider hinterland. Too often extractive ‘tunnel’ designs emerge, with limited impacts on wider development.

Our conclusions are reflected in AGRA’s excellent 2019 report produced by Tom Reardon and colleagues, focusing on the ‘hidden middle’. This argues that private sector investment that has the most impact is usually small, often informal, and deeply linked into local economies. Clusters are usually spontaneous, not planned as part of grand corridor or investment hub schemes. And when you look, the link between the vast number of smallholder producers and consumers is increasingly filled with many entrepreneurial private sector actors working in transport, processing, logistics and so on.

These private sector players are not ‘missing’, as is often assumed, but instead ‘hidden’ from view. The focus on ‘investment’ and ‘private sector’ (as in the trade summit) usually emphasises large, formal operations, branded as UK plc. But it is the smaller, local outfits that are driving change in African agricultural value chains, and in need of support and investment. Will the focus of the UK Africa investment summit be on supporting such smaller initiatives with the real potential for transformation, and developmental gains? From what I have seen, I somehow doubt it.

As the UK scrambles to compensate for the errors of committing to Brexit, holding the UK government to account in respect of its aid spend focused on support UK-led investment in Africa will be crucial, lest business imperatives override development goals, and larger UK investors get the upper hand, crowding out (hidden) local alternatives.

Investing is certainly possible in ways where the ‘terms of incorporation’ for local people and the ‘linkage effects’ for local economies are positive, and where land rights are protected in line with internationally-agreed guidelines. But it does require a sophisticated approach that goes beyond the promotional gloss and the hype of international trade fairs.

There’s plenty of good research on the implications of trade and investment on development in Africa, including that commissioned by DFID. Let’s hope the arm of the UK government that is promoting trade and hosting presidents from across Africa in London this week makes use of it.

This post was written by Ian Scoones and first appeared on Zimbabweland

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Research to impact: stories from Zimbabwe

Over a couple of weeks in December, I visited our long-term field sites in A1 resettlement sites in Masvingo province in Zimbabwe. It is now nearly 20 years since land reform and the beginning of our research engagement across these sites, and it was fascinating to hear about the changes that have been unfolding (more on this later in the year), but it was also interesting to learn how our research is being used on the ground.

At the heart of our work has been the on-going monitoring of what has happened to people’s livelihoods over time. This has involved a number of surveys, approximately each 5 years, but, in addition, we have been undertaking thematic studies on topics that have arisen as a result of conversations in the field. Many of these have been reported on this blog. They have included investigations exploring how young people have responded to land reform; the role of small towns in local economic development; explorations of land tenure and local authority, and much, much more.

One such theme that emerged a few years back was farmer-led, small-scale, informal irrigation. This was clearly becoming more and more important and we started a focused study under the auspices of the APRA programme, supported by DFID. One output of this was an open access paper in Water Alternatives. I hadn’t realised it until this most recent field visit that this had really struck a chord amongst the farmers we had been working with. As one commented, “it’s the talk of the area”. Copies of the paper had been distributed to those involved in the research when it came out, and one of the leads of an irrigation group on one of the resettlement farms had recently used it at a national field day held in one of our sites in Masvingo district.

Mr Mumero’s speech made the case, as we do in the paper, that irrigation policy was missing the mark, and that small-scale irrigation by farmers was transforming agriculture, and the potentials for productive farming. The assembled dignitaries – including the director at the Ministry of Provincial Affairs, the provincial and district heads of Agritex (ag extension) and MD and Chief Agronomist of Charter Seeds – were impressed. Hopefully the argument will catch on with those who make policy and fund programmes, with a diversion of effort towards what works, not wasting effort and funds on what has failed for years.

In another field site, we learned that our small booklets on local economic development had also been used for lobbying for change, particularly around supporting local business linkages with farming. Together with a series of videos, the booklets document the work of the DFID-funded SMEAD project (Space, Markets, Employment and Agricultural Development), making the case for supporting farm/off-off farm linkages along value chains. We had just reprinted a pile of the booklets (both in English and Shona) and farmers were delighted to take them to continue their lobbying work with government officials.

This blog is widely read, but not necessarily in our field sites as Internet coverage is not universal and bundles are pricey, and what’s more electricity supplies are today very intermittent. So over the years, we have produced two low cost book compilations of blogs, organised by themes – Debating Zimbabwe’s Land Reform and Land Reform in Zimbabwe: Challenges for Policy – which can be read in hard copy. These have been widely distributed in the field sites (as well as government offices and elsewhere), and it was great to learn that in several sites, they have been read as part of ‘reading circles’ in the villages, as our original 2010 book, Zimbabwe’s Land Reform: Myths and Realities, had been.

Zimbabwe’s land reform farmers are by-and-large an educated and articulate bunch, and are fascinated by the results of our research, and especially so when it’s focused on their concerns. They have always been the most exacting peer reviewers of our research. So, it was good to learn that the blog has emerged as part of a process of community self-education in the places we continue to work.

And it’s not only in the field sites where the research has been the inspiration for other activities. A few months ago, I heard from a blog reader that she had used a few of the blogs as the basis for a fictional exploration of the themes in a collection of short stories. A couple were subsequently developed as a play, and the result – Prisca’s Story – was performed at the Mitambo International Theatre Festival in Harare in October last year, which sadly I missed.

Research funders are obsessed by demonstrating ‘impact’, but very often impact only emerges slowly and through long processes of engagement and not through the choreographed approaches that are often proposed (or required). I had no idea much of this was happening, but it’s always good to know that research has diverse uses and can be repurposed and shared with different audiences. Hopefully, the blog in 2020 can help with this mission.

This post was written by Ian Scoones and first appeared on Zimbabweland

 

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Zimbabweland”s festive top 20 for 2019

For readers of the blog who want to catch up, the ‘top 20’ most viewed blogs posted this year are listed below. Many looked at older ones too, and there are now over 370 to choose from. As ever, the favourite blogs are a mix of broad development issues with a Zimbabwe angle, or more specific reports on research, either our own field results or reviews of papers by others. There are a remarkable number of people who follow the blog, and many more who check in from all over the world. As in previous years, the readers come mostly from Zimbabwe, then South Africa, the US and the UK.

Over the last few years the blog has been commenting on occasions on UK engagement – from the 2015 election onwards. Given the recent events in the UK, all these blogs have relevance today. The comment ‘be scared’ sadly rings true.

Boris as PM: it’s no laughing matter

UK supports Zimbabwe’s return to the Commonwealth

What will Brexit mean for Africa?

The UK election, Africa and Zimbabwe

Meanwhile, here are the top 20 for 2019. There will be more in the new year. Meanwhile, happy reading!

1 Zimbabwe’s challenges for 2019
2 Connecting the Sustainable Development Goals
3 Is farmer-led irrigation driving a new ‘green revolution’?
4 What are ‘appropriate technologies’? Pathways for mechanising African agriculture
5 Why radical land reform is needed in the UK
6 Zimbabwe’s fuel riots: why austerity economics and repression won’t solve the problem
7 The Chinese Belt and Road Initiative: what’s in it for Africa?
8 South Africa’s land report: Zimbabwe lessons?
9 Mining farmers and farming miners: what opportunities for accumulation?
10 Are communal areas in Zimbabwe too poor for development?
11 Can the technocratic reformers win in Zimbabwe?
12 Boris as PM: it’s no laughing matter
13 Robert Mugabe: a complex legacy
14 Young people, land and agriculture in Zimbabwe: big challenges ahead
15 Models for integrated resource assessment: biases and uncertainties
16 Off-farm work and diversified livelihoods in Zimbabwe’s communal areas
17 Responding to uncertainty: who are the experts?
18 Land and tenure in Zimbabwe’s communal areas: why land reform was needed
19 What does pro-poor rural development mean for Zimbabwe?
20 Turning the populist tide: what are the alternatives?

 

 

 

 

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Why is there food insecurity in Zimbabwe?

The food situation in Zimbabwe this year is bad. But what’s the cause? Drought is part of the story – you just have to see the dramatic pictures from Victoria Falls to realise something is up. But the food crisis is not just the result of a natural disaster, prompted by a major El Nino event across the region. Nor is it just due to land reform as too often surmised, as land reform has had complex impacts on the food economy, both positive and negative.

The situation is poorly understood because national food security assessment data are not effectively disaggregated, and miss certain dimensions. In particular, post-land reform grain market and exchange processes are very poorly understood.

These elaborate, informal processes – often sharing food from surplus producing land reform areas with other, poorer communal and urban areas – are however heavily disrupted by the economic chaos and uncertainty currently gripping the country, as discussed last week.

A few weeks ago I did an article for The Conversation, which explored these issues. In case you didn’t see it before, it is reproduced below.

Economic chaos is causing a food security and humanitarian crisis in Zimbabwe

Ian Scoones, University of Sussex

Since Zimbabwe’s land reform of 2000 – when around 8 million hectares of formerly large-scale commercial farmland was distributed to about 175,000 households – debates about the consequences for food security have raged.

A standard narrative has been that Zimbabwe has turned from “food basket” to “basket case”. This year, following the devastating El Niño drought combined with Cyclone Idai, some 5.5 million people are estimated to be at risk of hunger, with international agencies issuing crisis and emergency alerts.

It is unquestionable that this season was disastrous – only 776,635 tonnes of maize was produced, more than a third below the five-year average. Nevertheless, the story of food insecurity is more complex than the headline figures suggest.

It’s true that Zimbabwe’s food economy has been transformed over the past 19 years. Aggregate production of maize has certainly declined, and imports have become more frequent.

But Zimbabwe suffered food shortages, often precipiated by El Niño events, before land reform. These too led to the need for more imports. And surpluses have also been produced since land reform. For example, in 2017, there was a bumper crop. Some of it was stored and has been used to keep people going.

Getting behind the headline figures and understanding an increasingly complex food economy is essential. Our on-going research shows just how complicated the picture is.

Farming and food

Since land reform, we have been tracking livelihood change in resettlement areas in a number of sites across the country. Our research is exploring how people have fared since getting land, asking who is doing well and not so well, and why. Some of our key findings include:

  • Crop production is higher in the land reform areas compared to the communal lands. Larger land areas allows new settlers to produce, invest and accumulate.
  • There are substantial hidden flows of food between land reform areas and poor rural and urban areas, as successful resettlement farmers provide food for relatives, or sell food informally.
  • There is a significant growth of small-scale, farmer-led irrigation in resettlement areas. This is often not recognised, as production occurs on disparate small plots, frequently farmed by younger people without independent homes.
  • Trade in food across regions and borders, facilitated by networks of traders, often women, is significant, but unrecorded.
  • Market networks following land reform are complex and informal, linking producers to traders and small urban centres in new ways. Outside formal channels, the volume and flows of food through the system is difficult to trace.

Simple aggregate analyses of food deficits, estimating the numbers of people at risk of food insecurity, do not capture these new dynamics. National surveys are important, but may be misleading, and local studies, such as ours, often do not match the national, aggregate picture.

So, what is going on?

Access to food: complex relationships

Food insecurity is not just about production, it is also about access. This is affected by the value of assets when sold, the ease with which things can be bought and sold in markets, the value of cash as influenced by currency fluctuations and inflation, local and cross-border trade opportunities, and all the social, institutional and cultural dimensions that go into exchange.

When these dimensions change, so does food security. And this is particularly true for certain groups.

Take the case of Zvishavane district, in Midlands province of Zimbabwe. In the communal area of Mazvihwa, there was effectively no production this season. Some got a little if they had access to wetlands, and a few had stores. But compared to 30 years ago, production is focused on maize, which stores poorly, rather than small grains that can be kept for years.

How are people surviving? Some seek piecework in the nearby resettlement areas; others have taken up seasonal gold panning; others migrate to town, or further afield; others get help from relatives through remittances; while others are in receipt of cash transfers or food hand-outs from NGOs.

With small amounts of cash, people must buy food. It’s available in shops, but expensive. So a vibrant trade has emerged, with exchanges of maize grain for sugar or other products. And it’s especially people from the land reform areas who are selling their surpluses. Many have relatives who got land, and some travel there to get food, but there is also a network of women traders who come and sell in the communal areas.

Aggregate surveys almost always miss this complexity. There are sampling biases, as the importance of the resettlements as sites of production and exchange are missed.

There are data problems too, as it is difficult to pick up informal exchanges, and income-earning activities on the margins. The result is that each year there are big food insecurity figures proclaimed, fund-raising campaigns launched, but meanwhile people get on with surviving.

This is not to say that there is not a problem this year. Far from it. But it may be a different one to that diagnosed.

Economic collapse is causing a humanitarian crisis

As the Zimbabwean economy continues to deteriorate, with rapidly-rising inflation, parallel currency rates, and declining service provision, whether electricity, fuel or water, the challenges of market exchange and trade become more acute. Barter trade is more common, as prices fluctuate wildly and the value of physical and electronic money diverge. With poor mobile phone networks due to electricity outages, electronic exchange becomes more difficult too.

Collapsing infrastructure has an effect on production also. Fuel price hikes make transport prohibitive and irrigation pumps expensive to run. Desperate measures by government often make matters worse. The now-rescinded edict that all grain must be supplied to the state grain marketing board undermined vital informal trade. Meanwhile, the notoriously corrupt “command agriculture” subsidy scheme directs support to some, while excluding others from the provision of favourable loans for government-supplied seed, fertiliser, fuel or equipment.

Economic and infrastructural collapse is threatening food security in Zimbabwe. Even if there is good rainfall this season, the crisis will persist. Farmers will plant, produce and market less this year. While food imports are needed for targeted areas and population groups for sure, this may not be the biggest challenge.

Stabilising Zimbabwe’s economy is the top priority, as economic chaos is causing a humanitarian crisis.The Conversation

Ian Scoones, Professorial Fellow, Institute of Development Studies, University of Sussex

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Uncertainty and the Zimbabwean economy

Over the last month there have been a number of reviews of progress – or the lack of it – since the ‘coup’ of November 2017 (see, for example, a recent BSR here). President Mnangagwa arrived in post on the back of much good will and hope for change. But hopes have been dramatically dashed since. This is not only due to the failure to address political reforms as required under the Constitution, but also a failure to confront underlying economic challenges, the inheritance of the Mugabe era. The flood of external investment failed to materialise, and the process of dealing with debt arrears and the negotiations with the IMF has been convoluted and protracted.

The situation today in the formal economy is dire. The recent budget statement was a farce, with made-up numbers conjuring up a fictional story. No-one believes the story being spun. Trust is the basis of any economy. Once lost, it is difficult to retrieve, and wild swings in exchange rates between different parallel rates, combined with accelerating inflation, means that things have become uncontrollably uncertain. Such uncertainties can provide opportunities for a few – those able to ‘rinse’ money, capitalise on fake prices and hedge against dramatic changes. These capitalist cowboys profit from chaos, and there are those in the political-military elite who are doing so today through a range of schemes.

Living through uncertain times

This leaves everyone else living in precarity through deeply uncertain times. For those who can insulate themselves from the mainstream economy, survival is possible. So, those with a secure source of remittance income, for example, can buy solar panels, generators and transformers to avoid the endless power cuts from ZESA. They can dig deep boreholes at their homes to assure clean, reliable water. And they can employ people to queue for fuel or food or any other commodity in short supply; or jump such queues using bribes, foreign currency or premium payments. There are others without such resources who must live in the informal economy, making do. This is hard, creating anxiety, stress and fear. Those who must dodge the law to sell illegally, for example, must confront violence or pay possibly the highest ‘taxes’ of any citizen to pay off the enforcers.

And then there are farmers. In such a chaotic economy, they may have the greatest resilience of all, as they can supply for themselves, and trade locally in an increasingly barter-based rural economy. The formal channels of marketing – and so some agricultural commodities – are frequently a waste of time, but alternatives emerge in the survival economy, which, against all odds, is supplying food across urban and rural areas.

In 2019, Zimbabweans have joined the citizens of places like the Democratic Republic of Congo in the darkest days of the Mobutu regime when the economy collapsed. Zimbabweans have learned the skills over two decades now, and the memories of the dramatic economic collapse of 2008 are etched on many people’s minds. In the DRC this capacity to get by, to ride the storm to make-do through resourcefulness and initiative, is termed ‘débrouillardise’. It doesn’t translate well into English, as it’s not a passive sense of hopelessness or coping or muddling-through free of active agency. It is a set of culturally-rooted skills that are actively applied in the everyday; part of life in an uncertain, turbulent world.

A new narrative that takes uncertainty seriously

The STEPS Centre at Sussex is just ending its year focused on the theme of uncertainty (check out the multiple resources, including podcasts, videos and blogs here). Reflecting on the Zimbabwe situation, our engagement with the politics of uncertainty across a range of domains has been hugely revealing. Too often, we assume we are dealing with controllable, manageable risks not deeper uncertainties, where we don’t know what the outcomes are. Predictions, forecasts and technical plans are what follows from a risk-control approach. Yet, if things are uncertain, ambiguous or even subject to ignorance (where we don’t know what we don’t know), then a risk approach – as seen in the imagined figures and forecasts in Zimbabwe’s recent budget statement – makes no sense, giving a false sense of being in control.

Professor Mthuli Ncube, Zimbabwe’s finance minister, with his background in mathematical finance, is steeped in this quantitative risk paradigm and the world of precise models and confident predictions. This may work in Oxford or Geneva but not in Zimbabwe’s economy where radical uncertainties play out. As the economy fragments, it’s the parallel, informal economy, dominated by uncertainties, ambiguities and ignorance, where the action is. Here, the standard measures of economic management being attempted by Ncube and being suggested by the IMF have no effect.

Some imagine a reform package that will bring things back to ‘normal’, provide a sense of order and control, based on principles advocated for liberal market economies where the informal sector is not significant. A recent report from Chatham House was of this type. It’s an odd read as it doesn’t connect with realities on the ground, and conjures up an imaginary, wished-for economy.

Instead of senseless dreaming and fictitious prediction based on fantasies of control, a new narrative for the economy is required, one that takes the uncertainties of the real, everyday economy seriously. Only then will the necessary trust be built in the basic functioning of the economy – formal and informal – so that some much-needed stability can emerge.

This post was written by Ian Scoones and first appeared on Zimbabweland

 

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