Land, livelihoods and small towns

In early June, I was invited by the Africa Research Institute in London to a panel discussion held to launch a new ARI Counterpoints piece by Beacon Mbiba on ‘missing urbanisation’ in Zimbabwe. Beacon’s piece raised some important questions about how urban areas are defined, and how many urban people there are. As part of a wider debate about the dynamics of urbanisation in Africa – which Debbie Potts has provocatively contributed in a number of articles, including another ARI Counterpoints issue – the question of numbers and geographic boundaries is important – and has significant implications for planning and politics.

In my talk, I focused instead on the underlying processes of livelihood change that might reveal rather different numbers – if they could be counted accurately. I argued that the conception and the role of ‘the urban’ in people’s lives is changing following land reform, especially in rural areas.

The session was chaired by Edward Paice, and involved Beacon Mbiba (Oxford Brookes), Jo McGregor (Sussex) and myself. An audio version is available online if you want to have a listen. This is my presentation – slightly elaborated from my notes – picking up from the earlier Zimbabweland blog series on small towns in particular.

Land reform and small towns

Following land reform in 2000, there were major changes in production, economic activity and settlement – and with these largely rural changes there have been big changes in urban centres – very often small towns – near new resettlements. This I would argue has gone largely unresearched and unnoticed – partly because of the ways urban areas and people are demarcated, classified and counted.

Over last few years, we have been studying three such small towns (all featured in earlier blogs):

  • Mvurwi (in Mazowe district, formerly servicing large-scale white farming, a farm labour settlement, now at the centre of a booming smallholder led tobacco growing area),
  • Chatsworth (in Gutu, a railway siding, and again in the centre of what was large-scale farms, now surrounding by land reform areas producing maize, vegetables and other ag commodities) and
  • Maphisa (in Matabeleland South, Matobo district, again in a reconfigured rural area, including resettlements and an ARDA farm with a recent JV investment).

According to very outdated hierarchical urban planning classifications, of these, only Mvurwi is classified as ‘urban’ according to ZIMSTATS. Chatsworth and Maphisa (formerly a TILCOR town) are ‘growth points’.

All these small towns in rural areas have some common features in the 17 years since land reform:

  • Significantly increased resident populations (Mvurwi was up by 6,000 to the 2012 census)
  • A massive increase in stands, a building boom (tripled high and medium density stands in all towns, with many more pegged)
  • A rapid growth in business activity, especially of small enterprises – many linked to agriculture (market vendors, grocery stores, butcheries, hardware stores – as well as grinding mills, carpentry/building, welding, tailoring, hair salons, photocopy shops, phone card vendors, and, and, and….)
  • Many more transport connections and operators (kombis, small trucks)

And, on the negative side, there has been the closing down of some large businesses (some banks and companies formerly servicing large-scale farms, for example), and a serious decline in public services and state investment in urban infrastructure in all three cases.

Big changes in small towns: four themes

Noting these changes, and the links to land reform resettlement areas, we have asked, what shifts are important in understanding the changing role of rural small towns? I want to highlight four themes:

    1. Business opportunities. There is now money in the rural economy from agriculture on land reform farms (mostly A1). This includes cash from sales of tobacco (Mvurwi), horticulture (Chatsworth), and livestock (Maphisa). The dynamism of many local economies linked to A1 resettlements is there for anyone to see. Many of these flows of cash are seasonal – and today seriously affected by cash crisis, although the shift to e-commerce has been swift – but the overall volumes are significant. The result is what economists call linkage and multiplier effects: demand for services, inputs etc., especially agriculture related business, including transport, equipment, seed, fertiliser and so on.
    2. New people in town. In the past such commercial activity in such towns was dominated by large businesses. They were places where you might get a job or they were residential areas for farm workers or civil servants. Workers on farms would come to shop after being paid. Today, there are multiple small businesses. These are especially important for youth and women, and those who didn’t get land through land reform. Such activities are fragile, informal and risky, but offering a livelihood, and employing one or two others, generating overall considerable economic activity. For example: across our three cases, since land reform in 2000 up to 2016, there are five times as many hardware stores, 4 x grocery stores, 4 x food outlets, 3 x butcheries, 2 x bottle stores, 5 x numbers of market vendors and so on. And there are also new outside investors, including ‘black’ capital, as well as Indian, Chinese, and other investors, not seen in these towns before.
    3. Housing. There has been a massive expansion of low and medium density housing. There’s been a huge building boom (and yes, with this, opportunities for corruption and patronage, but not quite like Harare peripheries described by Jo McGregor’s research). In Mvurwi, 2000 low density and 750 medium density stands have been established since 2000. Many investors are land reform farmers and traders in agricultural commodities. Those linked to land reform sites are the new landlords, putting up the teachers, nurses and other civil servants. The period therefore has seen shifts in economic and class relations, and patterns of accumulation, as people invest in real estate from farming.
    4.  Infrastructure and planning. Basic services, infrastructure and planning is not keeping up with this rapid pace of change. Lack of state capacity and investment really shows in all our sites. Sewage, electrical supply and roads, for example, are all in a poor state. Local government is in a mess, but there is a new rural-urban politics emerging, as people demand that the state responds.

Rethinking rural-urban relations

Overall, I see a changing role of ‘town’. In the past, the classic pattern of southern African circular migration existed. Men went to work, usually somewhere distant; they remitted funds home, and then later retired to the rural communal home. This no longer happens, at least not in the same way.

Now ‘town’ is closer to the rural (small towns are where the action is, with better transport costs driving down local prices), people shuttle between houses in town and on the farms and families are split and mobile (seasonally, but also even daily – there are always full kombis coming to and from the farms).

To my mind, this makes the question of residence on a snapshot census almost meaningless! In my view, then, instead of worrying about the numbers or the classification of what is and isn’t a town, it’s better to invest in understanding the changing spatial dynamics of livelihoods – patterns of settlement, production, investment, accumulation – and so the changing relationships between urban and rural.

This requires a radical rethink of local government, service provision, infrastructure investment and economic and spatial planning. Throw out old colonial planning models, and redesign statistical data collection to fit new contexts.

I have long argued for a more regional spatial perspective to planning and development, incorporating the reconfigured rural areas and linking to urban areas, of all types. Local economic development is happening, but is not coordinated, supported and made the most of, due to the fragmented, dysfunctional nature of state (and private, NGO, and donor) support. Making this happen will of course require a functioning bureaucratic state, along with economic and political stability. This sadly still seems far off.

In the meantime, people will get on with their lives, refashioning urban and rural spaces, and the relationships between in ways that the planning textbooks and the census data just simply do not reveal.

This post was written by Ian Scoones and appeared on Zimbabweland

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A new land administration system for Zimbabwe

The Zimbabwe Land Commission, established as a result of the new national Constitution, has a major task ahead of it. It is vital that an independent Commission looks at the range of land issues in the round. The complexities presented by the post land reform situation are enormous, and a piece-meal approach will not do. Instead, as mentioned in several blogs in this series already, a comprehensive, district by district approach is required, one that is attuned to local circumstances and so flexible, and one that is cost-effective and fiscally sustainable. No matter what donor projects are on offer, they must be resisted unless the state – and private financing combined – can make the system work into the future.

What might this look like? Previous blogs in this special series have highlighted some of the elements. These include the challenge of land auditing; the major issue of compensation for ‘improvements’; the importance of securing women’s rights to land; the process of land dispute negotiation and settlement; the mechanisms to ensure land tenure security; and the question of financing agriculture and land investment. All of these are interconnected. None can be dealt with alone.

But recreating a land administration system (and associated capacities for land information management, survey and audit) in the context of a dilapidated government system, with few resources, is an enormous challenge. Combine this with the highly politicised nature of land in Zimbabwe – from all angles – and the role of political capture, patronage and corruption in land dealings, both rural and urban, and the challenge becomes even larger. As discussed many times in this blog, the rebuilding of an effective, accountable and functioning bureaucratic state avoiding ‘normalising’ corrupt and authoritarian rule, reclaiming it from its politicisation and even in some quarters, militarisation, is an essential task, as many others have pointed out too.

In the land sector, this is going to be tough. And with elections coming, not something for the next year most likely. But it is essential if a productive, stable post land reform future is ever to be achieved. There are plenty of people willing and keen to make this happen – across government departments there are many committed, capable and highly effective civil servants, and in groups like the Land Commission there are similarly highly qualified people. It is possible, and it is also urgent.

Vital elements of a land administration system – and how they must work together

What would be the key elements of a district level pilot of a new land administration system for Zimbabwe? The diagram below shows how different elements interact.

A starting point will be a land audit to get basic information on what is going on where and who is using land for what. This needn’t be that elaborate, and should not aim to map and measure everything, but is the starting point for a process of paying compensation for improvements. As discussed in a previous blog in this series, this has blocked change for years, and while systems are in place, there is lack of capacity to implement. A relatively rapid approach is required, using existing databases, in order to clear the way for allocation of leases and permits.

For defining compensation and who is liable, as discussed in an earlier blog, the definition of private and public assets and so liabilities is essential, as this paves the way for deciding who should pay what. For public assets, and for all the A1 smallholder areas, a major public scheme is needed, paid for through debt restructuring and grant finance. For private assets, systems of payment based on an effective land taxation system will be required, linked to a Land Fund that can manage the overall financing of the land administration system. If governed by clear rules and with effective oversight (which will require some work and investment) from the state, private actors may be important in audit, valuation and other assessment techniques.

However because of lack of trust and a long elapsed time since land reform, as clear political agreement on process is needed for the audit-valuation-compensation phase to work well. It does need to be done quickly, and starting at a district level may make it more feasible, and lessons could be learned about how to do it well. A statutory – and trusted – dispute resolution system will be required. This might, as discussed in an earlier blog, require a temporary standing Land Tribunal to process cases quickly, and deal with the backlog and avoiding flooding the courts. What Zimbabwe can ill-afford is on-going legal battles in courts around the world. The Constitution has provided a framework for addressing this, agreed by all political parties, and it is this that must guide some resolution. Sticking out for something else, which will never happen, only puts off a sensible resolution, allowing everyone to move forward.

Once some level of compensation is paid, in line with Constitutional requirements, leases and permits need to be issued – and quickly. A long wait for cadastral survey would halt things too much, so more ground-level, participatory techniques will be required, and an online, efficient system for recording information and issuing legal documents required. The idea of issuing private freehold title as proposed by some is sheer madness and would cause total chaos. In my view, the state must continue to have a role in regulating land use, so as to avoid land consolidation and multiple ownership infringement and uphold, for example, women’s rights. Leases and permits therefore make much sense, as long as they delivery security of tenure. As discussed in a previous blog, this is to do with much more than the legal standing of a piece of paper. What’s important is that the wording of leases and permits should include safeguards against rapid politically motivated overturning of property and use rights. There is a delicate balance, and requires clever drafting, but this is certainly possible, and strides towards this have been made, given earlier critique.

With leases and permits issued, financing for production is essential. There is no point in having an elaborate administrative system if investment and production doesn’t result. This has been a major bottleneck in post land reform agricultural growth, especially in A2 areas, as discussed in an earlier blog. Only part of this is due to the failure to address compensation and issues leases, as wider factors are at play, as discussed in an earlier blog. Getting finance to agriculture may require state backing, including loan guarantees, and encouragement to finance institutions, as in the Moveable Assets Bill, facilitating lending by banks. It may also involve getting other players from the private sector involved, under an effective regulatory framework, including contracting companies and joint ventures.

Once finance for agricultural production and investment is secured and flowing, then insisting on full and regular payment of land taxes and rentals is essential. This will require a much more stringent approach than exists now, along with enforcement capacities of the state. Regulated turnover of land will also help address issues of underutilisation, especially in the A2 areas, as only those producing and investment will be able to pay up. Potentially significant flows of taxation revenue then can replenish the Land Fund to support compensation payments (for public elements, combined with grant finance from the state and donors), as well as ensure the fiscal sustainability of the overall Land Administration system – across the Ministry of Lands, the Surveyor General and other government departments – where staff need to be paid, equipment needs to be bought and the whole system serviced over time, in perpetuity.

 Six district experiments?

Getting all of this to work together is of course a tall order, given the current state of affairs. Trying only one bit at a time – say issuing leases or insisting on taxation – will not work. It’s the system as a whole that’s important. As I’ve argued before, trying out such a system in a select number of places is the way forward. This might be, for example, 6 districts to start with in different agroecological zones and so testing out processes in different contexts. Places could be chosen judiciously where there is some capacity and a political willingness to try things out, innovate and create an effective system from the district up, and where big, complex disputes are festering that will take ages to deal with. We need to have a ‘proof of concept’, one that is efficient, manageable and fiscally sustainable, and can work fast to resolve the on-going mess that is Zimbabwe’s land administration system.

This post was prepared by Ian Scoones and appeared on Zimbabweland.  It is part of an occasional Zimbabweland blog series on priorities for the new Zimbabwe Land Commission.

 

 

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Getting agriculture moving: finance and credit

Getting the agricultural sector financed is a key challenge in Zimbabwe, and links concretely to land administration challenges discussed in previous blogs in this series. Making both places and people bankable is a priority, but responses have to be geared appropriately to different scales of farm operation (A2 and A1), as well as linking macro responses at the economy-wide level with regional, district and farm level responses. There are a number of dimensions to this context in Zimbabwe.

Political economy contexts

There are significant political dimensions to financing in Zimbabwe. Flows of finance and credit to the Zimbabwean economy have been heavily affected by the political relations between the Zimbabwean state and others over the last 17 years. The intermittent engagement with the International Finance Institutions due to outstanding debt arrears, and on-going restrictive measures around western donors working in ‘contested areas’, where compensation claims have not been settled, has influenced what amount and what types of finance are available. The Zimbabwe’s government’s own economic management decisions have often not helped either.

This macro-economic picture in Zimbabwe is dire – and has been for years. The formal economy went through an extreme collapse in the 2000s with the withdrawal of international finance, through a tentative recovery facilitated by currency stabilisation following 2009, and then a further crisis today, partly associated with the commodity price downturn, as well as economic mismanagement and corruption. The current cash crisis, a consequence of a combination of factors, and the strong regional demand for US dollars, has compounded things seriously, making business – including farming – very tough.

Furthermore, alternative finance from China and elsewhere has not been forthcoming. Acknowledging debts and liabilities generated by the land reform (see blog on compensation) is an essential precursor to moving forward; otherwise land reform areas will continue to be seen as high risk areas for financing. The current international re-engagements around fiscal management and other structural reforms, including the agreements around re-structuring the debt/arrears, offer opportunities if all sides of the bargain are kept. Addressing debt suggests a framework within which the compensation issue could be addressed.

Over the last 17 years there have also be indirect effects of the macro-economic situation on land investment. This is particular apparent as marketing and input supply intermediaries have been unable to get finance, as international risk ratings have remained high, and international loans for financing new operations have not been forthcoming. High interest rates, and so the high cost of money, have fed into this, resulting in illiquidity and a severe shortage of low risk cash for financing agriculture. The demand for financing in all sectors is so high that financiers prefer to lend into lower risk and high, immediate return areas (e.g. mining, and some retail operations, for example), with the result that there is little left over for financing agricultural investment. Re-engagement becomes critical to increase liquidity in the bank/finance sector, and so to shift interest rates and money supply.

A role for parastatals?

A particular feature of the macro-economic collapse has been the disappearance of a bond market. In the past the Agricultural Marketing Authority used to issue state guaranteed bonds that provided finance to the GMB, CSC, Cottco and other parastatals. The parastatals then took on an important role in market coordination and financing, including a variety of loan schemes for both small and large-scale farmers. Large-scale farmers, for example, were able to take out three month credit lines, with discounts on the volume of inputs procured. The Cold Storage Commission/Company used to finance local auctions and markets, and facilitate rural marketing. In the liberalisation era, parastatals went out of fashion, and their role declined. This was combined with a range of poor management and investment decisions, as well as growing corruption. The CSC focused efforts on the export market and large-scale beef production and invested in a series of costly white elephant abbatoirs. While Cottco was privatised, others such as Grain Marketing Board remained under public control, and became a key state agency for ‘command agriculture’ in the 2000s.

Today parastatals cannot raise meaningful funds on local bond markets, and certainly cannot rely on Treasury finance. Instead they must seek other partnership financing from the private sector. This is witnessed in the expansion of privately-run agribusiness operations on parastatal land, with over 20 new projects in train; some on a very large scale with significant capitalisation, and involving both local and foreign investors. This may help generate new forms of viable operation, but this removes parastatals from the wider social and market coordination role that used to be played, while the wider social benefits of such new investments have yet to be seen. A few banks (CBZ, Zimbank) and the AMA have raised limited money via agro-bill bonds, but the credit supplied remains on very high interest rate.

Contract farming

There are particular financing problems in agriculture, and these often vary according to the type of commodity. Even at the height of the economic crisis in the 2000s, export crops were able to take off, as external finance, often from China, India and other non-western countries, became available Thus the investment via Tian Ze (and China Tobacco, a State Owned Company) was vital for the growth of tobacco contracting in the early 2000s, including on land reform areas. This was facilitated by the Zimbabwean state, through foreign currency retention incentives, permits to purchase tobacco outside auctions, subsidised seed multiplication through the Tobacco Research Board, and significantly via the Tobacco Industry Marketing Board, as new regulations were put in place that facilitated contracting arrangements. Investment in cotton contracting in smallholder areas, including A1 farms, continued from the successful take-off in the 1990s following liberalisation, with even more players entering the ginning and contracting buying market in the 2000s and following land reform, although cotton companies have faced major challenges through a combination of side-selling and the decline in international cotton prices in recent times.

These export cash crop operations were able to continue because of the appropriateness of the crop to smallholder conditions (unlike tea and coffee, for example), and the ability of companies to shift to contract farming arrangements and the ability to sell products in hard currency externally. This form of cash crop contracting has become a vital form of financing in land reform areas in general, with the tobacco boom being the most celebrated example. As the economy stabilised, other contractors/buyers (including western companies) have returned, but now in a much more competitive setting, and heavily constrained by the economic environment, not least the lack of cash.

Some crops that were formerly grown on contract on large-scale commercial farms were not so easily transformed under the post-land reform setting. Large-scale export horticulture/floriculture is a case in point, where in the past very high-tech, just-in-time operations were linked to supermarket/broker purchase in Europe, usually under stringent standards (as in GlobalGap), and these could not be replicated by new farm owners. The operations were equally tied into complex financing and insurance arrangements that the large buying companies (in Holland for example for flowers and vegetables) were unwilling to reinstate due to potential risks, and increased costs due to the withdrawal of direct air freight routes to Europe.

Today, however such value chains are being reinvented for the new situation, with new models for outgrowing, contract purchase and financing being defined through a variety of business arrangements. Thus for smaller farmers operating on contract and producing certain crops, financing via contract arrangements rather than direct loans from banks has become an important route to land investment – although as discussed in other blogs not without challenges. Many such farmers mix contracting with direct sales and self-financing, as the terms of contract financing are not always favourable.

However, this does not apply to all crops, and contract eligibility restricts access for some. In addition to tobacco and cotton, that are now well-established contract crops, there are some other crops where contracting is developing, usually associated with a particular buyer. This includes paprika, potatoes (for chips/restaurants), and barley and sometimes sorghum (for brewing). Some attempts have been made to finance maize production under contracts, but this has been limited, as millers have been able to source cheaper product from outside the country.

Contracting arrangements in livestock systems are less developed, but may involve the financing of livestock owners by abbatoir owners for example to fatten and deliver animals to particular outlets. This is more prevalent in poultry production, where ‘outgrowers’ are linked to the supply of day-old chicks, feed and veterinary supplies. However, while contract farming with small-scale producers has been important, it has also had problems, notably through side-selling and the assurance of contracts. This has undermined the business viability of some operations, requiring government regulation in contract markets.

Financing for small-scale farmers outside contracting is highly restricted. Few small, $1000 dollar loan options are available. There are some examples of collective arrangements for raising funds and savings, including credits cooperatives and savings clubs, and some of these are supported by NGOs and churches in communal areas, but they have had little impact in the resettlement areas. Asset loans, such as chickens, may not hit the mark. Since the group lending approaches of the 1980s, there has been little experimentation with credit, and the collapse of such schemes through the demise of the Agricultural Finance Corporation in the late 1980s. The failure post structural adjustment in the 1990s to replace this system means that there is remarkably little accumulated experience of small-scale credit arrangements in Zimbabwe, in contrast to other countries in the region, and certainly Asia.

Partnership finance: joint ventures

Partnership based finance through joint ventures is another route through which funds can be raised. A joint venture is distinct from a share-cropping arrangement and is permitted under proposed new legislation. This includes where external financiers and former farmers who go into business with larger farmers, and the farm operation becomes a joint venture company. This is occurring in production, as well as processing and marketing, and is an important route to refinancing, where risks are spread as part of the joint venture agreement.

Joint ventures and partnership finance is increasingly seen as a route for rehabilitating and investing in state farms. A number of examples exist, including the now famous Chisumbanje sugar mill and plantation on an ARDA estate. Indeed around half of ARDA farms are now run with a private sector partners, and similarly investors into CSC farms are unfolding, reminiscent of the notable DMB operations (financed through CDC) during the 1980s. This may in time be linked to outgrower arrangements (as envisaged for Chisumbanje) as a core estate operation is developed through external finance, but remains under state control. With the lack of financing for parastatals (see above), these partnership arrangements have become vital for parastatal operations of many sorts.

Bank finance

For larger scale farmers, joint ventures and contracting however may not be the route they want to follow, and financing has been a major constraint, especially since 2000. Surveys show repeatedly that many A2 farms are undercapitalised with low levels of production, and sometimes significant land underutilisation. This has been a direct consequences of the macro-economic situation feeding through to financing options, despite various government schemes to support loans for farm equipment etc. Some are able to fund farm operations from other work (for example A2 farmers who have jobs as civil servants or in businesses) or through remittances (particularly from abroad), as well as through vertical integration of business (linking an A2 farm with abbatoirs, supermarkets and so on).

However such financing is relatively small, and not sufficient for major take-off especially in farm operations that require rehabilitation and recapitalisation. Significant but quite inadequate and irregular amounts of credit for irrigation equipment and farm mechanisation have been raised through lower cost external tied loans (e.g. US$98 million from Brazil through the More Food International programme, based on low interest payment over 15 years) using Agribank as one key conduit.

For most A2 farmers, bank finance is essential. This has been largely unavailable. It has also been restricted by the delayed issuance of leases, and their wording. Although land can be mortgaged, the phrasing of the first version of the lease contract presented the lease as state property that could not be sold or sub-let. It is therefore not clear how the land could be foreclosed to recover unpaid loans, and this undermined transaction possibilities for lenders. Procedures for bringing in an alternative lessee were also not clear. As many have argued, a revision of the lease wording is a crucial policy revision to balance the ability for the lease to form collateral in loan arrangements with banks, while allowing the state regulatory oversight to address its fears of the re-concentration of landholdings. The balance in safeguarding the security of loans and investment has been achieved in many other leasehold based property systems, although these experiences do not seek to regulate land concentration.

Zimbabwe could replicate the tested lease regulations that safeguard bank mortgage finance, and find innovative but competitive ways of auctioning foreclosed lands in a way that safeguards against multiple farm ownership. Moreover, the state is ultimately the guarantor as owner of the land, and can take back the land and compensate for improvements (paying any debts in the process), but this procedure would have to be specified. With this finance institutions, assuming improved liquidity, will be able to enter the land/agriculture financing market with lowered risk. There are a diversity of views on such proposals within the banking sector. Facilitating an effective discussion with government on rural financing is a high priority, given the banking sector’s potentially important contribution to agricultural and rural development.

For all farmers, there are of course forms of collateral beyond land. New approaches to financing has been encouraged through the Moveable Property Security Interest Bill. While ridiculed in the international press as banks accepting cows or goats as payment, it makes a lot of sense. But many banks have often reacted in a typically conservative fashion, basing assumptions on past practice rather than wider experience of a more flexible approach to collateral. Again the obsession with freehold title discussed in last week’s blog rears its ugly head. In terms of alternative collateral systems, mortgageable properties may be important as can moveable assets such as farm equipment, vehicles and livestock as specified in the Bill. Mortgages can be issued with hire purchase arrangements embedded – for example for the purchase of equipment – and warehoused commodities can be offered as commodity-based collateral, for example. As international experience shows (see below), private banks and finance houses can make use of rather more diverse ways of gaining security around loans than is currently being offered.

 Agricultural financing for land investment: a complex challenge

In many respects the often obsessive focus on land as collateral in the Zimbabwe debate is only a small part of a bigger and more complex story of agricultural financing for land investment, one that has barely been explored in post-land reform setting. The largest amount of funding for land reform farmers comes from contracting, with an increasing array of joint ventures emerging on A2 farms. As discussed last week, all of this must be seen in the context of wider, incomplete efforts at macro-economic reform and support for the revitalisation of the economy. Restrictions on financial flows, resulting in liquidity problems, high interests, the collapse of bond markets, and lack of international finance opportunities, as well as the flow of credit and finance away from agriculture, have severely restricted agricultural recovery. Resolving land issues – including accepting liabilities for compensation, revising lease terms, and developing regulatory frameworks for financing – is a core part of the macro-economic agenda, and central to finding a way forward for Zimbabwe.

This post was prepared by Ian Scoones and appeared on Zimbabweland.  It is part of an occasional Zimbabweland blog series on priorities for the new Zimbabwe Land Commission.

 

 

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Beyond the freehold title obsession: generating land tenure security

 

Zimbabwe has a regime of multi-form tenure, with multiple tenure types associated with different areas of land (freehold, lease, permit, communal and state land). This provides a flexibility in tenure arrangements, with each appropriate to different uses. For any form of tenure the overall objective is security but this can be achieved in multiple ways. The form of tenure must balance administrative complexity and cost of establishment (including cadastral survey, registration etc.) with use.

In Zimbabwe the typical post-settler economy pattern persisted following Independence, with large-scale farms retaining freehold, granted to white settlers during colonisation, while former tribal lands became de jure state-owned lands. These communal areas have de facto rights delegated to local communities (including chiefs), under the oversight of rural district councils. Other areas of freehold title were established in the colonial area, such as in ‘purchase areas’, becoming small-scale farming areas after Independence. Other land was designated as state land including parks, forestry areas and state farms. In the 1980s resettlement areas were established under a restrictive permit system, while following 2000, offer letters (later substituted by land permits) and 99 year leases were proposed, with a 25 year concession proposed for wildlife conservancies.

In line with the Land Tenure Commission of 1994, led by Mandi Rukuni, the challenge today is to clarify overlaps and confusions, and to develop a streamlined administrative system with regulatory oversight for all settings. This is a core challenge for the Zimbabwe Land Commission today, 23 years on. The post-2000 land reform has provided this opportunity for A1 and A2 areas, where permit and lease systems are proposed; although for some A2 areas, leases with options to buy and so transfer to freehold title are offered.

In Zimbabwe regulations exist that restrict multiple farm ownership, and stated policy encourages wide distribution of land, avoiding concentration. While issues of multiple farm ownership remain and regulations continue to be flouted, especially by senior politicians (see earlier blog on audits in this series), the principle is well established, and is based on commitments to social justice and the distribution of national productive assets, and is enshrined in the cross-party agreed national Constitution.

In the past, high levels of land concentration have resulted in political tension and inefficient utilisation of land, as well as land speculation. These inequalities, and many of the problems associated with the lack of regulation in ‘white’ freehold tenure areas, were an important impetus for land reform. But redistribution is only one step, ensuring tenure security following land reform is essential. Despite much evidence that investments in land, particularly in small-scale A1 settlements, has not been hampered by lack of clarity on land tenure and those in A1 areas usually regard their land as secure, a more formalised, accepted system is clearly required.

 Seven principles of tenure design

Here are a number of key principles for tenure design drawing on the international literature (and highlighted in an earlier blog). These are:

Democratic accountability to ensure the representation and participation of critical actors (landholders, farmers’ representatives, etc.) in the land administration system tailored to serve the needs of different forms of land tenure. Democratic control of this is afforded through the state having rights to regulate and intervene in land administration in line with national economic development goals.

A flexible market in land – including allowing sales, rentals and leases – to allow trading up and down in land size in line with investment and production capacity and skill (although with regulation by the state – see below), while providing safeguards against land concentration and multiple holdings.

Regulation against capture by elites or speculative investors to avoid inefficient and inequitable consolidation of land holdings and land disenfranchisement, especially of the poor and women. Safeguarding against the danger of mass or distress sales of land and rapid speculative land accumulation by local or foreign elites and companies, in times of economic hardship, and the reversal of redistributive gains is critical in the Zimbabwean context.

Facilitation of credit and investment through the provision of land and other assets as mortgaged collateral and the provision of bank credit guaranteed against land, combined with other credit guarantee mechanisms (for example, linked to farm equipment, livestock, buildings, urban assets etc. – see next section). This entails providing clear rules and regulation of farm investment partnerships, and pooled investment initiatives (e.g. cooperation in irrigation, agro-processing infrastructure etc.); and measures which enhance other forms of cooperation.

Guarantees of women’s access to land, as independent, legally-recognised land holders, with the ability to bequeath, inherit, sell, rent and lease land (for example through clearly defined and enforceable requirements for joint recognition of land holdings in leases, permits and titles, as well as administrative mechanisms to ensure equitable treatment of gender related land issues. Supporting the application of laws against discrimination, safeguarding women’s succession rights; and the division of rights on divorce (see earlier blog in this series)

A low administrative burden – both in terms of technical complexity and overall cost – of cadastral surveys, land registration and land administration more broadly. This also entails enforcing the levying of reasonable service charges for costly land titling services (e.g. surveying, valuation, registration, etc.), especially for ‘formalising’ leasehold property rights.

Revenues through survey, title, lease and permit fees and setting incentives to discourage underutilisation through land taxation is an important condition for an effective land tenure regime.

Multiple routes to land tenure security

Land tenure arrangements can be assessed against these key principles. Drawing on a discussion note I did with Sam Moyo some years ago (see earlier blog), the table below offers this assessment, based on both Zimbabwean and international experience. 

 

Freehold title Regulated leasehold Permit system Communal/traditional tenure
Democratic accountability to state None Yes Yes Limited
Flexible land markets Yes Yes Yes Informal only

 

Credit and collateral Yes

 

Yes Requires additional instruments for collateral guarantee Requires alternative credit/micro-finance support mechanisms
Regulation against capture No, although potentials for statutory restrictions on sales Yes Yes Limited regulatory reach
Preferential women’s access None Potential lease condition Potential permit condition None: traditional patriarchal biases
Administrative cost Very high High Low None
Revenues and incentives

 

Survey, land registration, title fees/Land tax Lease fees/land tax Permit fee/land tax Limited potentials

A key design principle is around administrative cost, and so delivery, management and efficiency. There is no point in designing a ‘gold standard’ solution if it cannot be implemented. The bizarre obsession in Zimbabwe with freehold title as the only route to land security – spouted at regular intervals by otherwise knowledgeable commentators and politicians – flies in the face of evidence from around the world. In Zimbabwe currently there are serious challenges of delivery, and a full cadastral survey and allocation of title to every plot in the country as some propose would be complete madness, resulting in massive cost, and a huge escalation of disputes that there would be no capacity to resolve. For lawyers and politicians (and some who combine the two) this may seem the neat option, but for anyone who works in farming areas (or has experience of attempts at this elsewhere, then the prospects are scary.

With appropriate design, leases and permits can offer the same security as title but via a different and much cheaper route that allows regulatory control, and they can be especially beneficial when combined with new approaches to financing (see next week’s blog). As with any form of property right, such rights of course must be upheld in law, and not removed at whim, dependent on political favours and patronage relations. But this is a general condition for all tenure arrangements, and with secure leases or permits, under conditions of accountable and non-politicised land administration (not something achieved in Zimbabwe at the moment of course), land security across a multi-form tenure systems should be possible.

Despite announcements on lease and permit systems for A2 and A1 areas, realising these ambitions on the ground remains a challenge. There is a need to assess realistically the scale of the surveying requirement and the cost and sources of funding this (along with compensation arrangements, see earlier blog in this series) in a systematic way. This could probably form part of a phased district land administration reform scheme (see blog in a couple of weeks for more on this). With options for A2 farmers at least to pay for surveying, this will speed up the issuing of leases, and so the refinancing of farms, as well as creating revenue streams to the state through rentals for further surveying. Fiscal sustainability is a crucial factor in the design of any system, and international experience shows that elaborate titling systems are very expensive.

LIMS: land information and management systems, a key piece of the jigsaw

A new land tenure system needs to be linked to an effective and appropriate land information and management system. Again the same principles apply: this needs to be designed with the real world challenges in mind, as a low cost rather than high end perfect system. Certainly, current efforts to re-equip and develop cadastral survey and land registration capacity is welcome. Fortunately today low cost GPS systems with automated computer upload and mapping services are feasible, and there is capacity in Zimbabwe on this (at the University of Zimbabwe, and elsewhere). A land registry that provides open access information on A1, A2 and other land holding types will be an invaluable resource. However, this must not be developed in isolation and separate from field level implementation, as the system must be functional and useable, and able to be supported from recurrent budgets.

While external donor funding is welcome, the land upgrading support should be widened, and a system must be designed and tested at district level with fiscal sustainability in mind. It must ultimately be able to be funded from land rentals, combined with self-payment for surveys. Rentals will thus result in tangible land administration benefits, especially for A2 farmers, as this will release opportunities for financing/mortgaging/loans (although see below), if clear tenure arrangements are established.

For A1 farms much of the land survey and registration work must be regarded as a developmental public intervention, and will have to be financed from the fiscus with donor support, at least for the first one-off permit delivery. Support for permit issuance needs to be done alongside a defined plan for paying compensation, and based upon establishing new financing arrangements. This financing should be seen as a core part of investments for re-gearing the economy.

An effective Land Information and Management System is a necessary part of this, but this needs to be designed and tested with real world conditions in mind. It needs to be low cost and able to remain funded under expected flows of recurrent budget generated from land rentals. However upfront investment is essential to get things started, and to do the initial survey and lease/permit allocation, and this can be seen as one public cost of implementing land reform. Without securing tenure, and creating an environment for financing and investment, then the flows of revenue that will sustain a land administration system will not emerge. The Lands Ministry and Surveyor General will be able to generate revenues from charging for services (including in urban areas), and also will need to set up a system for the systematic collection of rents in order to ensure fiscal sustainability.

Beyond the freehold title obsession

Zimbabwe needs to get over the idea that freehold title is the solution to all ills. Tenure security can emerge through many routes. An effective, transparent land administration and information management system is essential. Rebuilding the bureaucratic state and depoliticising land is essential. The Zimbabwe Land Commission has an important role in this, and one of its major challenges is thinking through a low-cost, replicable and sustainable system to support the delivery of leases and permits on a wide scale across a huge array of land types and sizes, from relatively large A2 farms to very small plots, including those in urban and peri-urban areas.

As discussed in other blogs in this series, and pursued further next week, through some phased district level initiatives it will be possible to integrate lease/permit registration and the development of a functioning land administration and information system, at the same time as dealing with compensation, and new financing arrangements. Getting such pilots moving soon is a major imperative for the new Land Commission.

This post was prepared by Ian Scoones and appeared on Zimbabweland.  It is part of an occasional Zimbabweland blog series on priorities for the new Zimbabwe Land Commission.

 

 

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Confronting authoritarian populism: a new initiative

A few weeks back, I highlighted the launch of the Emancipatory Rural Politics Initiative (ERPI), and the availability of small grants for doing research on both the contours of the current conjuncture, and how authoritarian populism emerges and is sustained in rural areas, as well as the forms of resistance and diversity of alternatives being generated for more emancipatory futures.

Now the team initially behind the ERPI have produced an open access ‘think-piece’ background paper, the first in a Journal of Peasant Studies Forum series on Authoritarian Populism in the Rural World.

The paper is open access, so please do share widely. The small grants window closes at the end of this week, so if you are thinking of applying do so now. And tell others across the world!

Since our initial launch, there has been massive interest, so do sign up for more info via the ERPI website (www.iss.nl/erpi). This paper will hopefully inspire further questions, suggest challenges and further provoke the debate. With political developments in all parts of the world, this is a vital theme for engaged researchers and activists concerned about the future of the rural world – and more broadly too.

Here is the paper’s abstract:

Emancipatory rural politics: confronting authoritarian populism

A new political moment is underway. Although there are significant differences in how this is constituted in different places, one manifestation of the new moment is the rise of distinct forms of authoritarian populism. In this opening paper of the JPS Forum series on ‘Authoritarian Populism and the Rural World,’ we explore the relationship between these new forms of politics and rural areas around the world. We ask how rural transformations have contributed to deepening regressive national politics, and how rural areas shape and are shaped by these politics. We propose a global agenda for research, debate and action, which we call the Emancipatory Rural Politics Initiative (ERPI. This centres on understanding the contemporary conjuncture, working to confront authoritarian populism through the analysis of and support for alternatives.

Download the paper here. We’d love to hear what you think of it. And please do get involved in the Initiative!

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Land dispute resolution in Zimbabwe

The reconfiguring of land use and ownership through land reform has inevitably generated a range of disputes. Having a clear, transparent approach for dispute resolution is essential. This is a key task for the Zimbabwe Land Commission, as this third blog in an occasional series on priorities for the Commission argues.

The process of land invasion and occupation and then the subsequent planning under the Fast-Track Land Reform Programme has left a legacy of overlapping boundaries, double occupations, evictions (including of farm workers), follow-on invasions and illegal allocation of lands outside the fast-track framework, competing authorities over land, lack of clarity over gendered rights and more. The failure of the land administration system, and the legal framework, to catch up with the realities of land reform even 17 years after the event have compounded the problem. The growth of urban and peri-urban demand for land, including in designated rural areas, only adds to the array of disputes over land being faced. Finding a clear route to addressing this reconfiguration of land rights and disputes is critical.

Zimbabwe’s land is subject to pluri-legal jurisdictions, with overlapping arrangements and often competing institutions. This is reflected in the variety of formal legislative provisions, as well as the intersection of formal and informal (customary) law. It provides for a confusing and complex situation that is often subject to dispute. The Land Commission Bill usefully pulls together a variety of pieces of legislation and the formation of the Commission will provide a single institutional point of reference for these issues. This will undoubtedly help. However, the Commission will have to continue to deal with these issues in practice, and develop ways of approaching dispute resolution in particular in this context. While the proposed Bill offers some formal mechanisms for doing this, how this will actually be done remains unclear.

Potential land disputes arise in a variety of areas:

  • Registration of leases and permits, including the importance of identifying joint rights of spouses (currently only optional, but disputes will be reduced if obligatory, and joint rights are clarified – see blog in this series on women and land)
  • Land audits including the assessment of utilisation and ownership (the latter will be clarified through the permit/lease registration process, and via an open access land registry and associated information system, while some clearer criteria for utilisation requirements are needed for auditors).
  • Compensation and valuation, mostly for large-scale farms, requires a clear approach to valuation, and the option of recourse, but overseen by the state (see blog last week in this series on this theme). Currently there are a variety of interested parties offering their view, and indeed some substantial but non-transparent data. However, all groups need to operate in relation to one system, as accepted by the Constitution. While this is provided for in principle in the new Bill, the practicalities are not yet clarified. As discussed last week, the establishment of an independent Land Tribunal for assessing disputes, operating intensively for a time delimited period, may help to relieve the backlog of claims.
  • BIPPA land (land under international investment treaties) is covered by an international dispute mechanism, and an international tribunal. As many have observed, this is heavily weighted in favour of the investor. International pressure to reform this system, in line with the FAO Voluntary Guidelines, and best practice approaches for land investment by foreign companies and financiers is building, but Zimbabwe has not engaged in this wider debate significantly. This may be an important route to seeking wider experience on land investment, and developing a more effective national approach, and avoiding the legal complications arising from the delayed mediation of the disputes over BIPPA properties. Here too, limited state capacity adequately to value BIPPA farms and to secure adequate legal services to engage the international tribunal, as well as pursue negotiations with the landowners and their national diplomatic corps, has undermined resolution.
  • Land inheritance and succession remains a recurrent issue, and now increasingly in relation to large, valuable properties in A2 areas (see earlier blog on women’s empowerment). The wider law specifies the requirements for this, including the rights of women, however the practices have been less than satisfactory, given the patriarchal domination of legal and administrative processes. Greater clarity in regulations (including naming in permits and leases) will help, but will have to be combined with public education and support to ensure that the letter of the law is followed, and known about.

The experience of national land policies and the establishment of land tribunals in a variety of countries in Africa will be a useful source of comparative experience for Zimbabwe as it establishes the Land Commission. For example in Namibia, recent legislation to facilitate dispute mediation and arbitration to pre-empt costly adjudication could provide useful lessons. There is a key lesson that the policy, commission and tribunal are only the framework,, and the practice – based on local arbitration and mediation – must be evolved on the ground. The principles of collaborative rather than hard law are essential here, and require a (re)training and capacity building among lawyers, as well as administrative officials.

Procedures must be transparent, and garner legitimacy. Any sense of corruption, conflicts of interest and so on would undermine the working of the Commission. A big challenge for the workings of the Commission in practice, particularly in the A1 and communal areas, will be to address how these processes articulate with ‘traditional’ and customary law. This is not tackled in the Bill, as formally in legal terms these do not apply. However, de facto law is pluri-legal, overlapping and conflicting, and so this will have to be addressed. Developing examples, and associated ‘case law’ in pilot cases will be important in this regard.

Given the importance of regularising land administration in the post land redistribution period, a series of decentralised district pilots that deal with all dimensions of land administration within an overarching framework may be the next best step. These can model the functioning of the Zimbabwe Land Commission for the rest of the country and provide the basis for building trust, developing administrative capacity and sharing lessons. How this might work will be picked up in a forthcoming blog in this series.

This post was prepared by Ian Scoones and appeared on Zimbabweland.  It is part of an occasional Zimbabweland blog series on priorities for the new Zimbabwe Land Commission.

 

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Compensation following land reform: four big challenges

Paying compensation following land reform is perhaps one of the most pressing and emotive land policy issues in Zimbabwe today. Delays have caused uncertainty and limited agricultural investment, undermined trust and prevented international re-engagement. Valuation and paying of compensation needs to be dealt with urgently.

With any compulsory acquisition – whether through land reform, or through expropriation for mining or urban development in communal areas or from freehold land – comes the responsibility to pay compensation, and the associated liability is taken on by the state. This is formally acknowledged in Zimbabwe’s new Constitution, but the practice of compensation in Zimbabwe has been found wanting.

Beyond the importance of political recognition of this as a priority, there needs to be a set of practical responses that help build trust between the different parties. This blog is one of an occasional series (for example, here) on priorities for the new Zimbabwe Land Commission, established by the Constitutional settlement. Here are four important challenges around compensation.

First is the methodology for valuation. The Constitution, agreed across political parties, specifies the obligation of the state to pay for ‘improvements’ (and only for land held under investment treaties). This is reiterated in the Zimbabwe Land Commission Bill. However, given the delays in implementing the approach there are many disputes about how such improvements are valued, and what improvements constitute, and who is responsible for them. This results in wildly variant estimates of the total liability, with the ranges of US$2-10 billion being presented. However there are fairly standard approaches to valuation available, and much international experience for dealing with different types of valuation, and depreciation including in volatile currency environments. Key outstanding issues relate to how responsibilities for compensating given ‘improvements’ are allocated. For example, a dam may be both a public and private asset – with water ‘owned’ by ZINWA, the dam infrastructure by the farmer, and the use of the water spread amongst a variety of users in a catchment.

Second is the state’s capacity for valuation. Here there remains wide dispute about appropriate methods, and the scope and comprehensiveness of the existing valuations as well as capacity to conduct and validate them, while maintaining a reliable assets database. The pace of official valuations is a real problem, and parallel initiatives have emerged. To date the government’s response has been piecemeal and slow, with individual farms being processed in ways that does not result in an overall strategic response. At current rates, it would take over 20 years for all farms in the country to be valued to allow compensation to be paid. Limited staff are available in the Ministry of Lands for valuation purposes, and equipment is limited and outdated. Mechanisms for self-financed surveying were proposed by the Minister of Finance in 2014, but private surveyors must work closely with government for such surveys to be accepted. This is not yet the case with valuations. There are major capacity constraints in implementing the process that need urgent attention. Formally transferring tenure, paying compensation and formalising new uses through leases or permits has to happen in one go, as new investments and funding flows are often conditional on all aspects being addressed.

Third is the process for dispute resolution (see next week’s blog). This requires clarification of the administrative process and the rights to recourse. The proposed Bill helps in this regard. Notice and gazetting is required, followed by a process of valuation and the option for arbitration in an administrative court. However while the procedure is specified the capacity to implement this in a way that all parties trust remains open to question. Given the importance of speeding up the process (and so likely increasing the number of disputes needing speedy resolution), there is a clear need for a time delimited administrative solution to deal with the process. The establishment of a specialist tribunal under the Land Commission, may alleviate capacity limits and improve the process’ transparency and legitimacy. Current provisions for dispute resolution are clearly inadequate.

Fourth is the funding of the process. In the context of the on-going fiscal constraints of the Government of Zimbabwe, there is limited capacity to pay for compensation, even if there is a willingness to do so. There is therefore a need to disaggregate the liability and define a series of mechanisms for paying it off. Improvements may include private goods acquired by individual farmers (such as farm machinery, buildings, irrigation equipment etc.), public productive goods (such as wider infrastructure, including roads, dip tanks, dams and so on), and public social goods (including those buildings now converted to schools, clinics, government offices/accommodation, trading centres). This is particularly the case on A2 land, but may relate to public housing for former farm workers on A2 land, as compounds are converted.

There is a clear assumption that land reform farmers will contribute through land rentals, and the purchase of some of the assets found on their farms with A2 farmers paying substantially more than A1 farmers. However, given the public developmental benefits of land reform, the state and development partners can be expected to pay for public productive and social components, including as part of debt clearance and development funding arrangements. The Bill establishes a Land Fund through which this can operate, and provides a channel for investment by development partners in public good/developmental aspects, so as to ensure a fiscally feasible response, given current constraints. In turn, a key challenge will be to ensure revenue flows from new farms are sufficient to pay rentals and so contribute to the fund to pay compensation. The fiscal sustainability of the process for both farmers and the state is crucial, and argues for a speedy resolution so that compensation is paid, new ownership and finance arrangements are established and farms increase productivity to pay contributions – together with the state and other development partners – in order to pay off the liability within a reasonable timeframe.

In order to speed up the process, there is an important imperative to boost capacity for implementation and financing. This requires a one-off effort, together with the establishment of a longer term system. The enhancing of survey and valuation capacity in the Ministry of Lands and the Surveyor General is a priority, together with the establishment of an independent Land Tribunal (operational for a time-limited period, say two years) under the Zimbabwe Land Commission to hear dispute cases, and deal with these swiftly, without them clogging the court system, and overwhelming administrative capacity.

Novel approaches to financing are required that see addressing the outstanding liability from land reform as part of debt restructuring and refinancing of the productive economy. Disaggregating the costs into private and different types of public cost will clarify who has to pay what, and this can be managed through an integrated system under the proposed Land Fund, involving all parties – private farmers, banks/financiers offering loans/mortgages, the government and development partners and international banks/finance institutions.

Ensuring a swift move from acquisition to valuation (via dispute resolution if required) to compensation and then issuing of leases or permits is crucial. This must be a central part of any land administration system for the future, and the backlog created by lack of action in the past 17 years must be dealt with urgently. Issuing of leases, for example, will allow for security of tenure and so potential for new financing, and then payment of rentals which in turn will replenish the Land Fund. Paying compensation must be seen as part of a wider strategy for refinancing the economy and increasing its productive, developmental potential, as well as addressing outstanding debts – including around land – is part of this. This is an urgent, and long overdue, priority.

 This post was prepared by Ian Scoones and appeared on Zimbabweland. It is part of an occasional Zimbabweland blog series on priorities for the new Zimbabwe Land Commission.

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