Command agriculture and the politics of subsidies

Command agriculture – a major, private-sector-backed subsidy programme implemented by the Government of Zimbabwe – has been hailed as a massive success, especially following the huge maize harvest reaped this year (see last week’s post). President Mugabe recently described command agriculture as ‘beautiful’.  The programme, led by the Vice President, Emerson Mnangagwa, with the ministry of agriculture and support from the armed services, involved the delivery of fertiliser (along with seed and fuel) to farmers in higher potential areas, and especially with larger land areas (targeting 2000 farmers with 200 ha or more of arable land) and irrigation facilities. Sakunda Holdings (and others) backed the scheme reputedly to the tune of $160m, and government implemented it on the ground, requiring those receiving the package to repay by delivering an ambitious five tonnes of maize per hectare funded to the Grain Marketing Board (GMB).

The command agriculture programme is being repeated again this coming season; this time with even more ambitious targets, and again with backing of Sakunda. Apparently 45,000 have registered and high crop outputs are expected. While much of the hype is wildly unrealistic, the programme has become core to an increasingly centralised approach to agricultural planning and development in Zimbabwe, as advocated by the VP. There are now ‘command’ approaches mooted for livestock, fisheries, wildlife and more. Given the VP’s background, these all follow the model of Chinese central planning, executed with military logistics and support. Hailed by the Chinese ambassador, it has been an enormous operation, taking up the energies and time of extension workers and apparently up to 1000 members of the army across the country.

The programme has not surprisingly come under intense scrutiny, and has become embroiled in the on-going soap opera of internal ZANU-PF political machinations, with a lively media spat between Higher Education minister Jonathan Moyo (of the G40 faction – and apparently a direct beneficiary), who denounced command agriculture, and the Lacoste faction who vigorously back the programme. The commander of the defence forces gave a robust defence too. Given the scale and ambition of the programme, there have been ‘leakages’ – and some high-profile cases of those abusing the system – and the delivery was not always smooth, with many not receiving the full package on time.

But despite everything – and significantly because of the excellent rains – the programme seemingly delivered. I cannot find reliable data that details how much of the 2.15 million tonnes of maize produced in the 2016-17 season (as well as improved soya production too) is attributable to command agriculture (some say 1 million tonnes), nor any results of detailed economic evaluations, but the basic point is that if you throw inputs (notably nitrogen fertiliser) at improved seed in well prepared soil, and there’s good rainfall, increased outputs will result. There is no agronomic surprise there. But with the GMB buying maize at $390 per tonne, way above world prices, and questions about how the financing works, there are clear concerns. The big question is of course, how sustainable is this approach for the longer term – economically and politically?

How sustainable?

This is the concern raised by economists and other policy analysts, including the IMF. There are precedents of course. This is not the first time Zimbabwe has embarked on massive agricultural subsidy programmes. Indeed the successful origins of white commercial agriculture in the country were built on huge subsidies from the state. Is this just a well-timed kick-start to the struggling A2 farms, which have lagged behind due to lack of financing, allowing them to find their own feet, as white farmers did before? In the 1980s and 90s, there were regular fertiliser subsidy (or cheap credit) programmes aimed at boosting communal area agriculture, resulting in a short-lived ‘green revolution’ in the country. In the 2000s, subsidy programmes – from Taguta to the mechanisation progammes led by the Reserve Bank – were attempts at spurring growth in the sector following land reform, but failed due to poor implementation, patronage and corruption.

More widely in the region, Malawi had a period of intensive investment in (mostly) maize production through the FISP (Fertiliser Input Subsidy Programme). This produced a significant growth in production, with Malawi becoming a regional exporter of maize. The same occurred in Zambia, through a range of programmes across successive governments. All of these subsidy programmes however became fiscally unsustainable, and while producing food and reducing import bills became very, very expensive, taking up significant proportions of national expenditure (with opportunity costs elsewhere – in schools, health services, road building and on). A bad rainfall year (or even a middling one) may unravel things quickly, loading more onto an already crippling national debt.

Subsidies and politics

Subsidies are always political. They are ways of directing political power and patronage to particular groups, who those in power want the support of. In the 1980s, it was the communal areas, who had backed the liberation war, with the political compact being that rural people (and their votes) needed securing. In the 2000s, it was the new resettlement farmers (notably A1 smallholders) who required support, as they were the base that ZANU-PF had to rely on in a succession of contested elections.

Today, while an economic-technocratic position of commercial boosting production is well articulated, the focus is on larger, more connected A2 farmers who are being favoured. As the core of the middle class, professional, business and security service elite who benefited from such land, but had not been using it effectively, securing their support politically, and ensuring greater economic viability of A2 farms (while securing food for the nation) had become a political imperative. And given the positioning of the VP and the ED/Lacoste faction, very much in line with a political dynamic unfolding now.

A more strategic view?

As with the support of emerging white settler agriculture by the colonial government of Rhodesia in the 1930s and 40s, this may be seen in the future as a successful investment. Long-term commitment by states to transformation – through innovation and core support – is increasingly seen as essential in any economic strategy. Gone are the days of the Washington Consensus when subsidy was always a dirty word.

But a wider strategic debate about such investment (including more broadly finance and credit in agriculture) and approaches to exit is needed, separating it from the complex machinations of intra-party politics and faction fighting. As with Zambia and Malawi (and India and so many other countries besides where electoral politics is heavily reliant on a rural vote), extricating the state from subsidy addiction is tough. Phasing out a fuel or fertiliser subsidy can result in protests, and an electoral backlash. Patronage and dependency relationships get set up, and peoples’ political careers and parties’ fortunes, become tied up with subsidies.

Zimbabwe urgently needs a more thorough-going debate about what type of subsidies make sense for rebuilding agriculture, avoiding the ideological knee-jerk that all subsidies are bad, but at the same time countering the tendency of patronage lock-in that subsidy programmes, tied to political cycles, always generate.

This post was written by Ian Scoones and appeared on Zimbabweland

Will white farmers in Zambia feed Zimbabwe?

 

The El Niño drought has hit southern Africa hard. Malawi, Mozambique, Zimbabwe and seven provinces in South Africa have announced emergencies. Coming on the back of a bad season last year, the food situation across the region is dire. Large volumes of food will have to be imported into drought-affected areas, with a regional deficit of 7.3 MT reported. News reports – including one from the Southern Daily that was widely circulated – point to white farmers who fled from land reform in Zimbabwe and now farming in Zambia as the saviours. Is this really the case or, as ever, is it a bit more complicated?

Who is producing Zambia’s food?

As discussed last week, the figures on how much food is needed and where is confused, but the latest on Zimbabwe suggest that up to 4.1 million people will need food aid before the end of the consumption season. While the estimates may be problematic, even adding a large margin of error, the bottom-line is that food must be imported into Zimbabwe in large quantities. The nearest source is Zambia, where good rainfall produced a harvest higher than predicted at 2.8m tonnes (not 3.3m as the Southern Daily reported, which confusingly took figures from 2014 and reported as if this year).

Who then is producing all this maize in Zambia? One of the oft-repeated narratives has been that the food being supplied to Zimbabwe now is being produced by white farmers who were evicted from Zimbabwe during the land reform. In a 2004 piece by Jan Lamprecht on the blatantly racist, white-supremacist site AfricaCrisis.org gloated that white farmers outcompeted 150,000 peasants in Zambia. Even President Mugabe seemed to have been swayed by the propaganda, commenting on the success of former large-scale commercial farmers from Zimbabwe at a rally. This was the narrative too of the error-filled Southern Daily piece (that was sent to me at least four times when it came out, with commentaries not dissimilar to that on AfricanCrisis.org). The evicted-farmers-save –Zimbabwe narrative is prevalent, but is it true?

Certainly there are some former commercial farmers now farming in Zambia – in such places as Mkushi block. Mkushi has attracted South Africans, Tanzanians, British and Zimbabweans, and is a focus for large-scale agriculture in the centre of the country.  Estimates suggest there are perhaps 750 white Zimbabwean farmers in Zambia, rising from 400 following land reform in 2000. External finances, such as through Agrivision Africa supported by the IFC, has allowed the capitalisation of commercial operations, and farms there produce a mix of crops, ranging from soya to maize to beef and dairy. Many commercial agricultural enterprises in places like Mkushi are highly productive, and currently very profitable. In part this results from skill and investment, but also the combination of recent periods of good rainfall and supplementary irrigation capacity that has improved production.

Maize being exported to Zimbabwe in part comes from such farms, but it’s actually – and contrary to the simplistic narrative – primarily grown on smallholder producers across the country. Maize production – and so the ability to export – has been massively supported by a highly-subsidised input support programme over a number of years. For example, in 2011 the Government of Zambia spent US$184 million on 182k MT of fertiliser and 9k MT of hybrid maize seed. This amounted to 0.8% of GDP then, and 30% of total agricultural expenditure. This is an enormous investment and, as in Malawi before, it has boosted maize production massively, but probably unsustainably. Today smallholders in Zambia produce around 2.5m tonnes annually, while large-scale producers 300k tonnes in a good year, like this past one.

In other words, the maize export story from Zambia is driven not by valiant white farmers of the much-promoted narrative (although they of course contribute) but mostly by the efforts of smallholders (including of course black Zimbabwean migrants who came during the Federation era, and have been important producers in central Zambia since then). But in fact the big story too is the role of massive (and fiscally untenable) subsidies from the Zambian state (and its aid donor allies), and big questions as to whether this will continue under the new political dispensation.

White farmers in Africa: mixed fortunes

White commercial farming in Zambia, as Zimbabwe before, and in experiences from Nigeria and Mozambique too, has been one of mixed fortunes. The lack of infrastructure, limited state support and poor finance and other support systems, made many farmers complain bitterly about their new settings. They had been successful farmers in Zimbabwe in the context of a massively supportive environment, with huge subsidies and state support, consistent from the 1950s at least until the 90s. This is not the case in Zambia – or Nigeria and Mozambique. Commercial farming in Zimbabwe was not always an independent, heroic effort by whites in the face of adversity. Of course there is always skill, hard work and entrepreneurial acuity in the mix, but state support, infrastructure and public investment was also part of the picture.

However, despite the challenges – and many gave up – some former farmers from Zimbabwe have become highly successful in Zambia. Considerable private resources from other businesses (some still in Zimbabwe) have been invested to make these farms going concerns, and now in the context of favourable exchange conditions and high demand, they are definitely contributing to the feeding of the region. But there is also other food entering circulation from a range of sources, most notably from smallholders in Zambia, and, as discussed last week, from production not captured by standard crop surveys and livelihood assessments in Zimbabwe itself.

A regional approach?

SADC and COMESA have always tried to take a regional approach to food security, with the expectation that at different times different countries or regions will feed others. An approach to open borders and trade should, ideally, allow low-cost food to move from places of surplus to those of deficit.

Supply of maize from surplus areas in Zambia to the Zimbabwean market has been restricted, however. Controversial restrictions on exports have helped drive the trade underground. Despite the formal limits, there is much that is travelling across the border illegally. The allure of the US dollar in the Zimbabwean economy is attracting much speculative trading activity, including in food (as well as other commodities). With a declining Zambian kwacha due to the collapse in mineral commodity prices, selling food to Zimbabwe in US dollars is an attractive prospect, and formal restrictions are very often circumvented. This of course adds to the liquidity problems and cash crisis in the Zimbabwean economy, as the dollars end up in Zambia, even if food is provided. This cross-border currency exchange politics is creating potentially large problems, especially as the US dollar increases in value against other regional currencies.

As much research shows, trade restrictions damage investment and can undermine food security. An open trading regime by contrast, it is argued, is efficient and economic, and offsets risks, which because of differential patterns of rainfall and the widespread reliance on rainfed production makes sense. Ensuring that there is regional surplus and efficient movement will offset the requirements for shipping from elsewhere in the world, which is slow and expensive. In this respect if Zambia feeds Zimbabwe, Malawi and Mozambique this year (and maybe South Africa too), this is fine, and the reverse may be the case at other times.

This post was written by Ian Scoones and appeared on Zimbabweland

 

Soil management in Africa: ways forward

Some years ago, as part of the e-debate hosted by the Future Agricultures Consortium we had a discussion on ways forward on soil fertility management policy. The conclusions are just as relevant today. In reviewing the excellent contributions to the debate (well worth a read), I highlighted 6 themes.

Context matters. Contexts – social, economic and ecological – must be taken into account in policy. Simple, blanket solutions do not work. They have been tried before and failed; and we should avoid making the same mistakes, no matter how urgent the situation is or who much money there is to be disbursed.

The argument against continent-wide (or even national) blueprint programmes has of course been long made. That is not new. Which contexts matter and what implications does this have for what should be done on the ground? This relates to the question about the merits of using inorganic fertilizers as the entry point to an integrated soil fertility management approach. There are contrasting, often ideologically-charged views on this. But there may be more consensus if we get specific about context.

Figure 1 offers a very simple, rather crude matrix of contexts. One axis focuses on agro-ecological contexts (from low to high responsive soils and available soil moisture). The other axis focuses on socio-economic contexts (from conditions where returns to inputs are high to those where they are low), emphasising context-specific input profitability and affordability.

Figure 1: Contexts for soil fertility management

 

	Low responsive soils (loworganic matter, low rainfall)	High responsive soils
Poor returns to inputs(profitability and affordability low)	Low external input options make more sense – external support required	Efficient application (e.g. micro- dosing) critical – market assisted
High returns	Mixed strategy appropriate	Application of inorganics make sense – market based

In situations where soils are highly responsive (to external inputs, such as inorganic fertilizers, and so have above-threshold levels of organic matter), and where returns to inputs are significant (and are perhaps the major factor constraining production – i.e. land tenure, market and other production constraints are not so important), then programmes focused on inorganic fertiliser use appear to make a lot of sense.

This does not mean that these should be high-level, blanket recommendations – all sorts of efficiency measures (such as micro-dosing) make sense. It equally doesn‟t mean that investing in the building up of organic material (through cover crops, green manuring, low/no-till etc.) is irrelevant. Far from it: the responsiveness of soils, and therefore the returns to inorganic fertiliser, is highly dependent on this being sustained.

But what about in situations where soils are less responsive (due to low organic matter, poor rainfall, or a combination of both), or where returns to inputs are low (due to high prices of the inputs, low prices of farm products and poor market and transport linkages)? Here the conclusion is less obvious. Here an integrated, and long-term effort is essential, with combination of technologies, services and policies.

Contexts outside the bottom-right hand box of Figure 1 are by far the most numerous in Africa, and are where most poor people live. Unfortunately most programmes, at least implicitly, seem to focus on the bottom right corner, as contexts are not considered as explicitly as they need to be.

Scale matters too. A consideration of context must occur at different scales. Figure 1 could be applied at regional, national, district, village, farm or field levels. The two axes can vary over very short distances, as both agroecologies and market conditions change.

The responsiveness of soils (and so the appropriateness of different fertility inputs) can vary dramatically within a farm and field, and farmers’ own soil fertility management strategies are often geared to this micro- scale. Micro-dosing with inorganic fertilisers, complemented by organic fertiliser applications, can allow very fine-tuned approaches at these micro scales.

Thus larger-scale programmes must be able to respond to scale variations and be flexible in their design and approach. They equally need to be supported by both participatory, bottom-up design principles, but also by effective soil diagnostic, testing and mapping approaches.

Socio-economic differentiation is important. Different soil fertility management strategies make sense to different farmers, depending on their own socio-economic context. In other words, in relation to Figure 1, the vertical axis varies across households (and even within households, say between men and women) depending on patterns of socio-economic differentiation.

This is clearly important for targeting and the design of programmes, such as differentiation between households with different levels of market access. Designing input support schemes requires a detailed understanding of such socio-economic variation. In some areas and for some households simple market mechanisms, perhaps supporting the growth of agro-dealer networks, may work well. In other areas, focused ‘smart subsidies’ may allow a positive spiral to develop, where more farm output leads to more investment in soil fertility inputs. In other areas for other households a more broad-based support will be needed, focused on providing a social safety net.

Past experience, and much current practice, avoids such differentiation, opting instead for a bureaucratically easier and more politically-saleable blanket approach, open to political manipulation. This has been the case in Zimbabwe, as elsewhere, with fertiliser subsidy and handouts being part of political patronage networks, involving both the state and non-state actors. This is dangerous, generating distortions, disincentives and inefficiencies.

Don’t forget longer-term dynamic trends. As discussed, contexts matter, but they are not fixed. They vary across space and across socio-economic group. They also change over time. A number of longer-term dynamic trends are mentioned across the contributions, each of which can dramatically affect the configuration of the axes in Figure 1.

Climate change, and with this changing rainfall and temperature patterns, is especially significant. A drying climate, with more variable rainfall and hotter temperatures (as predicted for significant areas of Africa) may make the application of inorganic fertilisers less like a good bet, as the contexts shift (to the left in Figure 1). In some areas, of course, the opposite may happen. This deep uncertainty about the long- term dynamics of climate must affect planning for soil fertility programmes. Adaptation measures which improve resilience will have to be part of these – and this means thinking about water, sanitation systems and soils at the same time. Basic soil and water conservation measures can go a long way, as can low/no till approaches, mulching and cover crops, as long as labour costs are not too excessive. Integrating cropping with livestock production has many spin-off benefits for soil fertility management.

Another trend – and in the last period a dramatic shift – is the price of inorganic fertiliser. This is a key factor in shifting the profitability and affordability – and the relative balance of different options. With inorganic fertiliser prices (of N and P) having increased by many fold, this clearly has shifted contexts too (to the top of Figure 1). Many questions arise: Is this going to be a long-term trend or a blip, potentially reversed by declines in oil prices? What will drive long-term change? How will fertiliser manufacturing and packaging investment in Africa make a difference?

There were no easy answers to these questions. But they need addressing in any future designs of policy and programmes, with measures to protect against future shocks and long term trends. Past interventions have often been disastrous, undermining the capacity of the African agricultural sector to respond. The abolition of fertiliser subsidies and the virtual ban on parastatals in the 1980s/1990s was a big mistake according to many. As with the technical responses on the ground, diversity and flexibility in design are the key words, if long-term resilience and sustainable development pathways are the aim.

In thinking about policy we need to have long-term trends in mind. if people are moving out of farming, or engaging as part-time farmers, straddling different livelihoods, the economics of soil fertility management may be seen in a very different way. Designing programmes on the assumption of full-time farming is increasingly problematic, and serious attention needs to be paid to the soil fertility management needs of ‘future farmers’ not just assumed ‘ideal type farmers;; potentially with quite different scenarios playing out in different places for different people.

Cultural dimensions of soil fertility management need to be central. There are many dangers of a ‘technical fix’ mode to solving soil fertility problems. It’s important to ask how farmers frame the problem themselves. Farmers often don’t see things the way some soil scientists do. Their understandings of soils are more holistic, centred on a perspective that looks at the wider ‘health’ of the soil-plant system.

Local peoples‟ knowledge, which consists not merely in picturesque representations of the properties and potentials of local soils, inherited from the past (“indigenous‟ knowledge) but also in experiential and adaptive knowledge from project successes or failures as found relevant to their livelihood circumstances.

The solution is not necessarily to apply some ‘medicine’ (or fertiliser), but to deal with the problem systemically. Indeed, in some contexts, inorganic fertilisers are viewed with suspicion, being seen as foreign contaminants of soils. This holistic perspective is more akin to agro- ecological approaches, where a more integrative view of soil systems is required.

A shift in perspective on the part of science and policy may be needed if the slogans of ‘soil health; for Africa are to have purchase. The indigenous, cultural understandings of soils and their management need to be taken on board, and seen as central to the design of programmes and policies.

Understandings that really get to grips with the complexities and dynamics of complex systems are essential. A variety of professional, institutional and other biases often prevents scientific analysis and policy-making from engaging with this. This remains a massive challenge, especially for the implementation of large programmes focused on soil fertility, and suggests a substantial capacity development focus for the future.

So how to go beyond the diagnostic-prescriptive framework for designing intervention and promoting change, driven by aggregate figures and simplistic framings? How to get nuance and specificity into the “special initiatives” or “Africa-wide programmes” that no doubt will follow from the International Year of Soils. As Ken Giller from Wageningen has argued, we must go from an obsession with ideal designs, or even ‘best bet‟ technologies or ‘best practice‟ management, to a ‘best fit‟ approach, that takes context – and so agro-ecological and socioeconomic contexts – as the starting point.

Perhaps some version of Figure 1 might therefore offer a just the sort of heuristic to help such a design as part of a conversation between planners, scientists and farmers that helps get us beyond the ruts that soil management policy has got into. This is vital for the post-settlement support necessary in the land reform areas in Zimbabwe, just as it is across smallholder Africa. If the 2015 International Year of Soils, that this blog series marks, is to have any meaning, the lessons and cautions noted above, and in previous blogs must be heeded.

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