Over the last few years we have been studying the relationships between land, markets and employment in commercial agriculture Zimbabwe through the SMEAD project, supported by the UK’s DFID-ESRC ‘Growth Research Programme’, and coordinated by PLAAS at UWC in South Africa as part of a regional, comparative study (research has also been completed in South Africa and Malawi). In Zimbabwe, the work has focused on Mvurwi area of Mazowe district and the Wondedzo area of Masvingo district, contrasting a high and low potential area.
The final report is now out, along with a briefing paper. I have already alerted readers to the series of films (‘Making Markets – in high and low res) we have made on the 3 commodities that we focused on in Zimbabwe – tobacco, horticulture and beef. Please do check out the publications and videos to get more detail. This blog offers some highlights of key findings and recommendations emerging from the work.
Despite many challenges, Zimbabwe’s agrarian economy is generating new economic activity and new employment because it is more locally rooted following land reform. Our research shows however how, while economic linkages generated by agriculture create opportunities, the distribution of benefits is patchy; some succeed and are accumulating, while others are not.
There are many challenges ahead. This blog has often focused on practical and policy challenges associated with agricultural production. These include for the need for a reliable supply of affordable fertilisers; the need for enhanced extension and service support, including through mobile phones and the Internet; the need for investment in water management and irrigation facilities; and the requirements of tenure security to encourage investment.
In our work in the SMEAD-Zimbabwe project, we focus on key recommendations for supporting economic linkages and the non-farm rural economy. These include:
- Investment in rural infrastructure is essential. Restructuring rural production and economic activity following land reform requires a new configuration of infrastructure – roads, electrification, network coverage for mobile phones, market sites and storage facilities, business centres and so on. This is urgently required in order to facilitate the growth of economic linkages and support for the non-farm rural economy.
- Encouragement of market information services via mobile phones, text messaging and the Internet will assist in increasing knowledge of prices and market options for farmers, input suppliers, service providers and other entrepreneurs, and help develop a more market-targeted approach, avoiding gluts and price crashes.
- Contract farming arrangements for certain crops eases capital constraints, provides inputs and offsets some risks. In the tobacco sector, the Chinese company, Tian Ze, has contracted a number of (mostly larger) resettlement farmers, but has been key in supporting sales from the auction floors, and the wider contracting system for tobacco. However contracting needs sensitive regulation to protect all parties.
- Finance and credit is extremely limited, and constrains on and off-farm business development. Bank loans are concentrated on contracting companies, and so a limited suite of crops and activities. Access to finance for others is constrained by major problems of liquidity in the banking and finance sector. There is need for low interest finance for farm and non-farm business activities. Rules and regulations have to be in place to protect financiers and borrowers.
- Small towns and business centres near new resettlement areas are often booming, providing services, markets and employment. As ‘growth poles’, basic support for their sustained expansion is required, including infrastructure investments, and the facilitation of informal, small-scale trade and service supply.
- Training in business development skills for farmers, service providers and technology manufacturers will help in the upgrading of business opportunities, particularly for youth and others without land, so they can participate in a local non-farm economy. Business training – including the issuing of business management certificates – is essential.
- Investment in developing value addition from agricultural production is vital. This includes drying and bottling facilities for vegetables and meat products, as well as small-scale food selling, compliant with food hygiene and safety standards. Tobacco farmers lose on rejected leaf and sweepings. Value addition could involve technologies to make manures, as done by companies such as Nico Orgo.
- Private sector-led agricultural trade, input supply and service support is often hampered by restrictive regulations and by-laws, combined with often punitive taxes and charges. Policy and regulatory reform to support the growth of small-scale businesses linked to agriculture in the rural areas is a priority. Local councils/government need to do away with out-dated rules and regulations that hinder the initiation and growth of new small businesses.
Zimbabwe’s rural economies are undergoing rapid change following land reform. However, redistributing the land was only the first step. Building sustainable local economic growth that generates employment and is rooted in vibrant rural markets is a longer process, requiring continued support. Local economic growth is being generated by a new vibrancy in the agricultural sector created by land reform. But for the full potentials to be realised, and for the benefits to be shared widely, greater investment in the conditions required – including infrastructure, skills, regulations and policy – is needed if Zimbabwe’s agricultural revolution is really to take off.