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Zimbabwe urgently needs a new land administration system

File 20180105 26160 1vwdvct.jpg?ixlib=rb 1.1
REUTERS/Siphiwe Sibeko

This is the second in a short series of articles produced for The Conversation on the land and agricultural development challenges for the post-Mugabe era. See the first one on compensation in last week’s post.

Zimbabwe urgently needs a new system of land administration to harness development in the agricultural sector. The country’s land use and ownership have been significantly reconfigured by the fast-track land reform programme undertaken during Robert Mugabe’s rule.

Today, following the land reform of the 2000s, Zimbabwe has an agrarian structure that’s made up of small, medium and large farms, all under different forms of land ownership. A landscape that used to be dominated by 4,500 large-scale commercial farmers is now populated by about 145,000 smallholder households, occupying 4.1 million hectares, and around 23,000 medium-scale farmers on 3.5 million hectares.

Knowing exactly who has land and where is difficult. Illegal multiple allocations combine with unclear boundary demarcations and an incomplete recording system. Many new land owners don’t have formal documentation and lack leases or permits confirming ownership. There is a great deal of uncertainty given the often haphazard, sometimes corrupt, approach to land reallocation that took place under the land reform programme.

Given that the landscape is very different to what went before, a new system of land administration is urgently needed.

Promise of change

In his inaugural speech, Zimbabwe’s new president, Emmerson Mnangagwa, declared that land reform was both necessary and irreversible, and acknowledged some big, outstanding challenges.

A new land administration system for the post-land reform era is long overdue. Paying compensation to former owners is a vital first step. This has to be combined with a comprehensive land audit to weed out those failing to produce, or those illegally holding more than one plot, alongside allocating leases and permits to those in land reform areas, and attracting investment into agriculture as the mainstay of an ailing economy.

Both compensation and audit processes will inevitably throw up disputes. A fair and transparent system for rapid resolution is required, including the establishment of an independent Land Tribunal. Alternative dispute resolution processes at a local level will hopefully avoid the dangers of the courts getting clogged with numerous cases.

An audit also has to be linked to land registration, and an effective, but low-cost, land information management system. Following registration, legal recognition and formal documentation of land ownership is essential, as land tenure security is vital for future investment.

Many forms of tenure

Some believe that the only solution is individual freehold titling, as land is otherwise seen as “dead capital”. But this is mistaken, as other forms of land tenure can offer security, spurring investment, if the institutional, legal and political context is right.

As argued in 1994 by the Rukuni Commission, a major review of tenure policy in Zimbabwe, a multi-form tenure arrangement makes most sense. In some settings, communal tenure regimes are best, allowing flexibility and broad access. In others, a simple permit system can allow registration. In others, a leasehold arrangement can offer security and collateral, while regulations can offset land concentration and assure access for certain people.

Occasionally freehold title may be appropriate if a completely free market in land is required. However, titling schemes are notoriously expensive to deliver, open up multiple disputes and are difficult to regulate to ensure more equitable ownership structures, including land ownership by women.

Financing is essential

To pay land taxes, mortgages or compensation payments, the land must be productive, and this requires finance. Finance for agriculture has been missing in recent years.

Great efforts have been made to ensure that the 99-year lease for medium-scale commercial farm land (known as A2) is bankable, and cannot be withdrawn arbitrarily. It seems that, at last, the Zimbabwe Banking Association is in agreement. This will allow the release of private bank finance, as land can be used as collateral.

For those without land leases, other types of collateral can also be used, including assets such as livestock, vehicles or buildings. Alternative sources of farm finance include commercial crop contracting, partnerships and joint ventures or government backed loans.

All these financing models have shown some promise in Zimbabwe in recent years, with crop contracting at the core of the smallholder tobacco production success story. Contracting arrangements are also extending to other crops. Joint ventures, including partnerships with Chinese investors and former commercial farmers, have also been emerging in a number of under-capitalised medium-scale farms.

“Command agriculture” – a public-private input supply scheme – has been a flagship project led by the new president and the military. It has helped to revitalise maize and wheat production, especially on larger farms with irrigation infrastructure. Questions are however raised about longer-term sustainability of such subsidised financing.​

Sustainability is key

Getting a new land administration system working is a huge task. All the elements have to work together – from audit to valuation to compensation to dispute resolution to issuing land tenure documentation to financing – and back again.

And this is not just a one-off task to resolve the current mess. Land disputes will continue, audits will need to be repeated, and new leases and permits and sources of finance secured. For this reason any new system must be sustainable, both administratively and financially, and not reliant on external donor finance. Taxes, rents and compensation repayments need to be paid back into a land fund, which in turn supports the system for the long-term.

Testing this all out at a district level before rapidly rolling it out across the country is an urgent task for Zimbabwe’s new Land Commission. Elaborating a new land administration system is long overdue. Such a system will help the country get over the post-land reform impasse, resolving outstanding land issues and getting much-needed investment flowing into the agriculture sector.

The ConversationOnly with this working well – as countries in East Asia recognised when they undertook land reforms decades ago – will the full benefits of Zimbabwe’s land reform be realised.

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

This article was originally published on The Conversation. Read the original article.

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Two speeches for ‘new era’ Zimbabwe

From http://www.zimbabwesituation.com

Over the last few weeks I have been in Zimbabwe, visiting our field research sites in Mvurwi, Matobo and Masvingo. It has been an exciting period, with fast-moving developments. The euphoria of November has given way to the realism of December, and with this some emerging sense of what the ‘new era’ might bring.

Two speeches have dominated the news – first the inauguration speech by President Mnangagwa and, second, the budget speech last week by reinstalled finance minister, Patrick Chinamasa. Of course actions must follow words, but overall I find the tenor and content broadly positive, and I remain cautiously optimistic that a corner has been turned.  In this blog, I will offer some excerpts from and comments on both, focusing only on land and agriculture issues.

The inauguration speech was well crafted, aimed to send messages to different audiences from each paragraph. Following a respectful acknowledgement of the former president Robert Mugabe, he rejected the sanctions imposed on the country, creating a ‘pariah state’. He argued for letting ‘bygones be bygones’ and for the need for everyone to accept the historical realities and politics of the country, particularly in relation to land reform. Land – and the irreversibility of land reform, but the importance of investment and effective utilisation – was emphasised right up front in the speech in the following important passage:

“…given our historical realities, we wish the rest of the world to understand and appreciate that policies and programmes related to land reform were inevitable. Whilst there is a lot we may need to do by way of outcomes, the principle of repossessing our land cannot be challenged or reversed. Dispossession of our ancestral land was the fundamental reason for waging the liberation struggle. It would be a betrayal of the brave men and women who sacrificed their lives in our liberation struggle if we were to reverse the gains we have made in reclaiming our land. Therefore, I exhort beneficiaries of the Land Reform Programme to show their deservedness by demonstrating commitment to the utilisation of the land now available to them for national food security and for the recovery of our economy. They must take advantage of programmes that my Government shall continue to avail to ensure that all land is utilized optimally. To that end, my Government will capacitate the Land Commission so that the commission is seized with all outstanding issues related to land redistribution”.

The following comment on compensation was the one that was picked up by the international press. It of course represented no shift in position, as compensation for ‘improvements’ on the land (but not for the land itself) has long been accepted, although payments have been extremely slow:

“My Government is committed to compensating those farmers from whom land was taken, in terms of the laws of the land. As we go into the future, complex issues of land tenure will have to be addressed both urgently and definitely, in order to ensure finality and closure to the ownership and management of this key resource, which is central to national stability and to sustained economic recovery. We dare not prevaricate on this key issue.”

Reference to the ‘laws of the land’ clearly relates to the Constitution, which as an all-party agreement confirmed this policy position. What was different in this speech was the tone, and the public commitment. While policies may have not changed, the PR machine and sense of urgency clearly has. This is excellent news, given that compensation has long been a major outstanding issue, preventing closure on the land reform, and resulting in on-going sanctions being applied around still ‘contested land’.

While the inauguration speech was inevitably thin on detail, more was offered in the budget statement last week. Chapter 7 focused on ‘support for agriculture’, with the budget rather optimistically expecting the sector to grow by 15.9% on the back of a really good season. Re-emphasising the importance of agriculture in the President’s inauguration speech as the ‘mainstay’ of the economy, issues of land utilisation, land tenure and boosting production were emphasised.

Chinamasa’s statement summarised the challenges of ‘new farmers’ thus, “On average, the new farmer had been encountering constraints which became a hindrance to full productive utilisation of the land, bordering around capacity, resources, and elements of insecurity over tenure. The result was much idle farmland, and unaccountability on the part of the farmer with regard to use of acquired land holdings for farming in support of domestic food security, supply of agro-inputs and exports”.

A number of remedies were offered:

On land tenure: “To give confidence to beneficiaries that their occupancy is guaranteed, and cannot be withdrawn willy-nilly, through the indiscipline of either youths, political leaders, traditional leaders or senior officials, Government is undertaking to institute measures to strengthen the legal standing of Offer Letters and 99 Year Leases. This enables the much needed farm investments, improved utilisation of land and, therefore, production”. This is good news, and also a relief that the lease/permit option remains preferred over a mad titling spree advocated by some. The budget emphasised the need to speed up farm valuations and surveys, so that the issuing of leases can be speeded up, supported by the Surveyor General (and drones!).

On land audits and under-utilised land: Through the process of land auditing “issues of multi-farm ownership, idle land and under-utilisation of land are going to be identified. Idle land represents dead capital and promotes speculative tendencies, if not checked on the part of the land holders. As a result, the economy loses on optimal agricultural production”. The Zimbabwe Land Commission is charged with this responsibility, and the budget speech urged the long-awaited audit to move forward.

On Command Agriculture: “The thrust is on full, efficient and sustainable utilisation of allocated land, for increased investment on the land and production”. The role of ‘anchor companies’ (such as Sakunda) as part of a strategic public-private partnership is emphasised,. Such companies provide “access to capital and markets, sharing of best practices, farming knowledge and transfer of expertise, mutually beneficial to both parties. More specifically, the identified anchor companies have the critical roles of providing access to capital, training the small scale farmers and coordinating marketing, including exporting”. Interestingly, Command Agriculture is seen as a “transitional inception intervention”. There is a recognition that, pending allocation of leases and the release of private finance (especially for the A2 farms), collaborative financing models, involving the state and the private sector are needed. “In the interim, the new farmer would need to be incubated as they learn the ropes and overcome learning-by-doing inefficiencies that entail yields lower than would obtain with best practices, making a case for transitional producer prices higher than import parity levels.” As discussed in an earlier blog, a key issue is how long – and how politically necessary – such an ‘interim’ phase is required, as the cost of defaults and $390 per tonne of maize is huge.

On ‘leakages’ and abuse: An extended section of the speech focused on leakages in the Command Agriculture and Presidential Inputs Scheme, recognising the problems of corruption that have been widely reported. A decentralised electronic data management is proposed, along with the capacitation of Agritex offices and ‘command centres’. Investigations of abuse are promised, whereby “culprits will be quickly brought to book”. Clearly Command Agriculture is a high-profile plank of economic policy for the ‘new era’ (at least for now) – extending from maize and wheat to include soy beans and livestock in the coming season. In line with the wider rhetoric around stamping out corruption, military discipline and well-designed logistics operation will be applied it seems, with Air Marshall Perence Shiri firmly in charge.

On loan repayments: The budget speech highlighted (in the context of course of a very good rainfall season) the loan repayment pattern of Command Agriculture. For maize, “loan recoveries are running at 66%, with the Command Agriculture Revolving Fund registering repayment receipts of US$47.4 million in loan recoveries from farmers. This is against an anticipated repayment target of US$72 million. Out of the 50 000 farmers contracted to produce maize under Command Agriculture, 33% fully paid their loan obligations, with 22% having partially paid their obligations, while recoveries others are being made as they deliver to GMB.” A broadly similar pattern is reported for wheat. Let’s see what the final figures are once all crops are delivered, but for a state loan scheme such returns are not bad, although clearly could be improved, with over 10,000 farmers not having paid anything by 23 November. To that end: “To encourage our farmers to continue paying back their debt obligations, all fully paid farmers are being prioritised in accessing inputs under the 2017/18 Command Agriculture programme.” This sort of financial discipline is encouraging, and is certainly reflected in conversations I had with a number of A2 farmer beneficiaries of the scheme who are committed to repayments, and are actively being chased for them, despite their apparent status or political connections.

On private finance: With Command Agriculture presented as temporary, what alternatives are suggested? “As we move forward, private sector and commercial bank finance will be required to fully take up its rightful role of adequately underpinning agriculture, particularly, A2 commercial farmers”. For this, the A2 99 year lease is seen as crucial, although continued politicking around this continues. For smallholders, contract farming arrangements are highlighted.

On compensation: Not much detail was offered here, other than a recommitment to paying compensation in line with the Constitution. The statement indicated monies were to be set aside, both for normal compensation and for those areas appropriated that were under bilateral investment treaties. The amounts were however not specified; clearly there is hope that donor support and debt rescheduling will help.

In sum, the policy directions proposed by both speeches are certainly on the right track. The opposition complained that their ideas had been stolen, highlighting a converging consensus on many policy issues. The challenge will be to make the grand ambitions happen, so far with extremely limited resources; although of course with the hope of new injections of donor funds and lines of credit. Central to the challenge for land and agriculture will be to combine all elements in a new, effective land administration and financing/support system. The new minister of Lands, Agriculture and Rural Resettlement and his team, as well as the independent land commission, all have their work cut out. Hopefully some of the ideas shared in this blog and from our research over the years will help in charting a way forward.

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

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