Tag Archives: land reform

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

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Is Zimbabwe food secure this year?

A bumper harvest has meant that Zimbabwe is largely food secure this season. Despite the fall armyworm outbreak, maize production was up to an estimated 2.1 million tonnes, thanks in large part to good rains. Government and donor support programmes supplying fertiliser helped too. Total cereal production – including small grains such as sorghum and millet – was estimated to be 2.5 million tonnes. Areas planted expanded significantly, with maize planted on 1.9 million ha, up from 1.2 million ha the previous year. Tobacco production – a key source of income for buying food for many – suffered a bit due to heavy downpours and waterlogging, but a good season was recorded with 186 million kg produced. Grain imports were expected to be minimal – perhaps 5,000 tonnes mostly through informal cross-border exchange – and the GMB and private producers were storing grain in large quantities. The Grain Marketing Board was expecting to purchase about half a million tonnes of maize.

So, with a good season, combined with effective supply of lots of fertiliser, Zimbabwe returned to its former ‘breadbasket’ status. Or so goes one narrative on last season. Certainly output last year was impressive. Everywhere you went was a maize field; green and productive. The government hailed the ‘command agriculture’ scheme as the basis for reviving commercial production (see next week’s blog). And the aid donors were thrilled with their food security programming. But without greater resilience in the agri-food system, this new success is fragile. What if the rains fail again, as they did in 2016 due to El Nino, when only 512,000 tonnes of maize were produced?

Vulnerabilities persist

Even in this year of apparent plenty, the ZimVac study, which looks at food security and livelihood vulnerability nationally, warned that some people, in some places, right at the end of the season were likely to be food insecure. The World Food Programme country director quoted the figure – 1.1 million people will be food insecure in Zimbabwe. As discussed many times on this blog, this sort of statement is dangerously misleading and irresponsible, but of course understandable, as it is wrapped up in the politics of food, and the positioning of large UN agencies, donors, relief NGOs and the state, each reliant on claims about food insecurity for their flows of income.

But there is an important point underlying the headline figure (which really is a distraction, but one the newspapers love each year when the ZimVac report comes out). As the detail of the report shows, vulnerabilities have not gone away. The cash crisis currently gripping the country, the stealth of rising inflation and parallel markets, and the lack of access to food or income to buy it is what is worrying. Pockets of vulnerability persist: on the margins of the country where market connections are poor; among highly marginalised groups (the unwell, disabled, aged, infirm, or child-headed households); and particularly in communal areas where access to productive assets (most notably land) is limited, or in urban settings where employment is fragile and connections to rural homes is weak.

Understanding food systems

With centralised food storage and a boosting of irrigation and production capacity in commercial farms (notably A2 land reform areas), the prospects of overall food balances being met at a national level are improving. But as Amartya Sen argued long ago, aggregate food availability is not the same as access and entitlement; and it is entitlement failure more often than not that causes food insecurity and famine. This is why the debate needs to shift to food systems – and the links between production, markets and provisioning. While getting estimates of total production through the annual crop assessments is vital, it is not enough. Even the relatively sophisticated vulnerability assessments that use this data do not capture everything, as I have discussed before.

The maps of food insecurity that the agencies put out do not reveal the social and political geography of the different colour shades. How are urban and rural areas linked? What is the relationship in the food system between communal areas and new resettlements? Where are markets and how are they linked to producers and consumers, by what infrastructure? And so on. This requires a more connected approach, one that perhaps looks at regional interactions, and especially links between areas.

Land reform areas: central to food security?

My hunch is that at the heart of the new agri-food system, and central to a new perspective on food security in Zimbabwe are the new resettlement areas – to date mostly the A1 areas, but increasingly A2 too. While not everyone by any means, our data from Mvurwi, Matobo and Masvingo shows that there are a significant group (ranging from 60% to 40%, depending on site and season) who are producing surpluses year on year, selling on through local markets, transferring to relatives in town, or storing for future years. More or less everyone produced surpluses this year, but even in bad years, like the last few, this is an unseen motor of the new food economy.

In the generic reports or undifferentiated maps, this dynamic is not revealed. Aggregate pictures do not tell the full story. There is a politics to keeping this from view of course, but also a lack of capacity in data sampling and analysis. We are currently extending our earlier studies that looked at communal areas near our A1 sites to look at links, and interesting stories are emerging, but these will inevitably remain case studies in need of locating in a wider national picture for planning and policy.

It is great news that Zimbabwe is (mostly) food secure this season, and such a massive harvest was reaped. But food and agriculture policy cannot rely on just hoping for a good rainfall season – especially with the heightened variability due to climate change – and must take on board a more nuanced perspective rooted in a deeper understanding of how the post-land reform agri-food system works in Zimbabwe. It is amazing to me that this has yet to happen, more than 17 years on.

This post was written by Ian Scoones and appeared on Zimbabweland

 

 

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BZ Mavedzenge: the loss of a true public servant

Blasio Zivengwa Mavedzenge (better known simply as BZ) has tragically died following a car crash near Mashava. Another terrible loss in the global carnage of road traffic accidents, which claim 1.3 million people each year. And, after Sam Moyo, another brilliant person from our Zimbabwe land research community, robbed from us too early due to others’ reckless driving.

BZ has been a research collaborator and good friend of mine for 30 years. With many others, I am devastated by our loss. A constant source of sage, practical advice, with a deep knowledge of farming contexts, especially in Masvingo, BZ has been an inspiration on many fronts. Over the years, he has taught me so much, not least about how to do sustained, grounded research in rural settings.

I got to know BZ, and his close friend and colleague Felix Murimbarimba, in the mid-80s, when they were leading the Masvingo-based research of the Farming Systems Research Unit (FSRU), then part of the Ministry of Agriculture’s Department of Research and Specialist Services. Since then we have worked on many projects, and produced many publications together:  from early work on the impacts of structural adjustment on agriculture to work on drought and dryland farming (that ended up with the book, Hazards and Opportunities), work on soil fertility management, studies of crop-livestock integration and of course, since 2000, long-term research on the livelihood consequences of land reform. We also produced several film series together, and BZ’s skills extended to film narration, with his deep baritone voice providing the perfect commentary for the ‘voices from the field’ films.

BZ was no ordinary researcher. He did not have a string of qualifications after his name, no academic titles or positions. He was first and foremost a public servant, working for government from 1974 when he took his first job with TILCOR (now ARDA) to work on the Chisumbanje estate. BZ was born in 1947 in the depths of colonial rule. He grew up in Chirumanzu communal area, part of a chiefly family. He was educated, like his children, at the mission school, Gokomere, and later trained at a government agricultural training college, gaining an agricultural diploma.

From Chisumbanje, BZ went to Gokwe and trained as a cotton grader, and then joined the research department and worked at Matopos Research Station as a technician, implementing important research on grazing systems, from the mid-1970s until 1981, when the FSRU was established. Unlike many researchers, BZ knew his agriculture, and he also knew about implementing rural research, and how difficult it is. As a technician, low down in the hierarchy, BZ was often at the receiving end of poorly designed experiments or absurdly long surveys. From long experience, he had an acute sense of what was feasible, and what might be interesting, and our many discussions over the years on research design, methodology and data analysis have massively enriched my own capacities as a researcher.

On-farm research, bringing research from the station to farmers’ own fields, was central to the FSRU’s mission. As the approach evolved from simply replicating experiments in field conditions to more participatory approaches, involving farmers in the design, implementation and analysis of experiments, BZ and the Masvingo team came into their own. Important work on open-pollinated seed varieties radically shifted policy thinking, and later work on soil fertility and nutrient management provided important pointers to a more balanced approach to soil health. In this period, we developed close links with farmers in different sites across Masvingo province, which became crucial in later phases of work.

When the FSRU closed down, BZ moved to a research officer position within Agritex, the extension department. Nyasha Pambirei, then provincial head, knew the value of research and the important insights it could bring on the ground. This capacity was vital as we developed our work on ‘livelihoods after land reform’ from 2000, initially in Masvingo province. This resulted in the 2010 book, Zimbabwe’s Land Reform: Myths and Realities, plus many co-authored papers and reports. BZ was also central to extending our research efforts to Mvurwi and Matobo in recent years, using his extraordinary diplomatic skills to negotiate access to new sites, sometimes in tricky settings.

BZ was also a farmer himself, applying his exceptional knowledge of agriculture in the difficult dryland environment of Mashava. He gained land through the land reform, joining with the late Cosmas Gonese and the AZTREC group in the invasion of Shashe farm. In an interview, BZ recounts this story, and the early establishment of his A1 plot. The farm was his pride and joy. Following his retirement from government service, he moved there permanently with his wife, Mai Tapiwa, who has joined him in making it a wonderful home and productive farm. With the prolific rains this season, BZ was sending me many photos through WhatsApp of the harvest as it came in – maize, sorghum, millet, groundnuts and more.

Despite the sniping of some other researchers and journalists, being a farmer – proudly part of the land reform – did not distort BZ’s perspectives on Zimbabwe’s land issues. Quite the opposite: his engagements on his farm helped us all understand the challenges much better. He could be the harshest critic of some aspects of land reform, and associated policy, but equally recognised the potentials and opportunities it presented, as he tried to realise them himself. Over the last decade, Shashe farm has become a focus for training of others in farming approaches, and a centre for experimentation on agroecology and debate about food sovereignty, with many people coming from across Zimbabwe, and internationally, to learn from the Shashe experience. The Mavedzenge homestead regularly hosted visitors, and many recall the long and intense discussion into the night on all aspects of land, agriculture and livelihoods.

Even in his retirement, BZ was continuing his public service. Quiet and unassuming, BZ’s deep knowledge and commitment was inspiring to everyone who met him. Unlike BZ, his children and grandchildren were able to benefit from the fruits of Independence, and particularly education, which BZ and Mai Tapiwa were passionate about. As a regular visitor to his home in Masvingo over 30 years, I have seen the family grow, regularly reviewing spectacular school reports and hearing about many family achievements, near and far and across generations. I have learned much about parenting from the Mavedzenges, and only wish that the long-planned trip to their home with my own kids had happened before this awful event.

BZ’s passing is a deep loss for everyone who knew him, and for our research community more broadly. We have lost a true public servant; someone with strong values and commitment, deep intelligence and insight, grounded pragmatism and good humour. BZ, we will miss you, your kind advice and generous counsel, and of course that inimitable laugh.

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 This tribute to BZ Mavedzenge, 13 October 1947-27 August 2017, was written by Ian Scoones and first appeared on Zimbabweland. BZ was laid to rest at his farm in Mashava on 30 August. He is survived by his wife, and children – Tapiwa, Kenneth, Terrence, Romualdo, Tunga and Tafadzwa – along with many grandchildren. Please feel free to add your own comments, memories  and reflections below.

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The 20 top Zimbabweland blogs of 2017, so far!

It’s the time of year that Zimbabweland takes a break for a few weeks. But it’s also a good time for readers to catch up on what they’ve missed. Here are the posts from this year that have received the most views (and now with all the right links – sorry for those who were browsing earlier in the week). The list starts with a topical one from January, but there are also quite a few from the blog series that have been run this year, based on our on-going research in Masvingo, Mvurwi and Matobo. These have included:

  • A series on the future of medium-sized farms, based on our work in a former ‘purchase area’, and reflecting on the challenges of new A2 land reform farms.
  • A series on young people after land reform, and the challenges of precarious livelihoods, as well as the opportunities presented by the new agrarian structure
  • A series focused on land administration challenges confronting the Zimbabwe Land Commission, including land audits, compensation, dispute resolution and more.

Apart from these, there have been book reviews, summaries of some of our new papers and more.

So far there have been around 35,000 views of the blog this year, covering many posts across the years – and from all over the world. There are now nearly 300 posts to view, so there’s plenty to dig into. Just search! And if you are not one of the 570 people who receive a copy of the post each Monday morning into their inbox, do sign up, or follow me on Twitter @ianscoones, as new blogs are usually highlighted. Happy reading!

  1. View What will the inauguration of President Trump bring to Africa?
  2. View What is the future for medium-sized commercial farms in Zimbabwe?
  3. View Tobacco and contract farming in Zimbabwe
  4. View Zimbabwe’s diamond theft: power and patronage in Marange
  5. View “No condition is permanent”: small-scale commercial farming in Zimbabwe
  6. View Women and land: challenges of empowerment
  7. View How persistent myths distort policy debate on land in Zimbabwe
  8. View Young people and agriculture: implications for post-land reform Zimbabwe
  9. View Medium-scale farming for Africans: The ‘Native Purchase Areas’ in Zimbabwe
  10. View The future of medium-scale commercial farms in Africa: lessons from Zimbabwe
  11. View Beyond the crises: debating Zimbabwe’s future
  12. View How are the children of Zimbabwe’s land reform beneficiaries making a living?
  13. View Underutilised land in Zimbabwe: not a new problem
  14. View What prospects for the next generation of rural Zimbabweans?
  15. View Methods for agrarian political economy: reflecting on Sam Moyo’s contributions
  16. View Compensation following land reform: four big challenges
  17. View Africa must take the lead in addressing global health challenges
  18. View Diverse life courses: difficult choices for young people in rural Zimbabwe
  19. View Land audits: a tricky technical and political challenge
  20. View Land dispute resolution in Zimbabwe

This post was written by Ian Scoones and appeared on Zimbabweland

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Land and agriculture in Zimbabwe following land reform

In May, I was invited to give a talk on Zimbabwe’s land reform and its aftermath by a great new student initiative at SOAS (School of African and Asia Studies) focused on agriculture and development in Africa. The event was hosted by the Royal African Society and SOAS. I was on a panel with Na Ncube who leads a great initiative in Matabeleland called the Global Native (see an earlier blog).

There is a recording of the event available here. Below I have elaborated my notes a bit, so they are more readable. They should vaguely tally with what I said. The discussion was great too, and worth a listen.

So here’s the talk….

A very brief history

Land and its relationship to agriculture has had a long and fraught history in Zimbabwe. As Robin Palmer said in his brilliant book, Land and Racial Domination in Rhodesia, back in 1977:

The most acute and difficult question confronting the first government of Zimbabwe will be that of land, bedeviled by its past use as a political and economic weapon by the whites and by consequent mythologies to which this has given rise. The problem will not be an easy one to resolve.

Indeed, this has come to pass. A difficult relationship between land, agriculture and livelihoods continues.

Before discussing some of our work on land and livelihoods since the land reform of 2000, I want to offer some brief historical context.

In the 1980s – resettlement was central to the post-Independence effort, and various models, based on a willing seller, willing buyer approach to transfers, were tried out. The so-called Model A schemes – a smallholder approach – was relatively successful as shown by the long-term by Bill Kinsey and others.

By the 1990, resettlement had slowed down, and by late 90s, some 72,000 households on 3.2m ha had been settled. This was way lower than the original targets. In this period there was an acceleration of acquisitions of farms by black elites, and commercial farms prospered in the liberalised economic environment.

But by 2000, 20 years after Independence, there had been no fundamental changes in the agrarian system. It was still based on a dualist arrangement – large-scale commercial farms contrasting with communal areas (and some resettlement schemes) – and was hiding many tensions and much political discontent.

From the early land invasions in late 1990s, accelerating in 2000 following the Constitutional referendum, there were major changes in land use across Zimbabwe, as people took the land. What later became the fast-track land reform programme (FTLRP), resulted in about 10 million hectares being transferred to about 220,000 households, within just a few years, involving both small-scale (A1) and medium scale (A2) farms.

This was a volatile period, sometimes violent, resulting a huge upheaval, and a loss of much of what was white owned large-scale agriculture. It is a highly varied story, and any simple narrative is simply not possible, as I’ve argued many times before.

Post-land reform livelihoods: three themes

Since 2000, we’ve been tracking what has happened – now in three sites in Masvingo, Mazowe and Matobo. Since the land reform, we have argued it is important to have some solid data on economic, social and political changes in the face of often highly ill-informed commentary and policy debate.

I want to highlight three key themes from our findings.

First, there is a new agrarian structure. As Sam Moyo and others have described, it’s now a trimodal system: small-scale (most), medium scale and large-scale and estates (importantly still present and often involving multinational agribusiness).

Second there has been varied performance in production, and so mixed success, across this trimodal system.

The small-scale A1 farms have done surprisingly well (this is consistent across our sites: production has grown; investment has expanded, involving what we refer to as accumulation from below; some economic growth potentials have been generated, especially linked to small towns; and new value chains and linkages have been created. To my mind, this is an important, unsung agricultural transformation, but with vanishingly little external support

By contrast, the A2 medium-scale farms have done less well. Capital constraints, lack of investment, limited finance/credit have hampered production, but some new joint ventures and contracting arrangements have helped. Unlike the European commercial farms established in colonial era in these same areas, there has been virtually no finance and state support.

In the large-scale and estate sector, the story has been varied. But the sugar estates are continuing, and are increasingly reliant on new outgrower arrangements to assure profits.

Third, there have been shifts in politics, as a result of this reconfiguration of land and its uses. Again, this is reflected in different ways across the trimodal system.

Most of the new A1 farmers were from other rural areas, mostly communal areas, and the urban unemployed. Not all are doing well by any means, but many are – and all aspire to accumulate, as many are managing to do. They have varied links with ruling party (and not all are supporters by any means). They are now demanding services and support from the state/party, which has so far been strikingly absent. As a more educated/younger/connected demographic than their immediate communal area counterparts, they are now demanding more, with increasingly louder voices.

The A2 farmers represent a very different class composition. A professional middle class dominates, with many civil servants gaining land, part of the state’s deal with such class interests. In some sites more than others, there are also members of the security services and others with strong political-business-military connections. Many A2 farmers are now seeking alliances with other investors, including former white farmers, Chinese and others, in order to boost production and offset debt.

Finally, the large-scale farms and estates, often with direct links to international agribusiness have negotiated the political uncertainties with brokered deals with the party-state, providing them some cover for their interests (see our work on the sugar estates, for example).

Thus the new trimodal agrarian system has generated new forms of production and economic relations and with this a new political dynamic. These are different across A1, A2 and large-scale/estate sectors, and represent an important new class dynamic in the countryside, with major implications for the future.

A constrained agrarian setting

Overall, though, the potentials of the new agrarian structure is highly constrained: by failures in the wider economy, lack of rural credit and finance, insecure tenure arrangements, poor land administration, patronage and corruption (as I have discussed many times on this blog – for example, a few weeks back). The failure to pay compensation to former white farmers, in line with the Constitution, has hampered political progress too, as various international ‘restrictive measures’ (aka sanctions) persist.

Within these broad categories in the trimodal system, we must also look at other actors – some of whom lost out significantly from the land reform. These include former farm workers, now becoming incorporated into new farm structure, but on poor terms; women who gained early, but are losing out due to reassertion of patriarchal structures; and youth, who nearly a generation on don’t have a chance of getting like their parents did in 2000, with small subdivisions being offered and resentment building.

Over 17 years, there have been winners and losers from the land reform, and the net result of the wider political-economic impasse in Zimbabwe has been stagnation in the key economic sector of agriculture (although with a much vaunted bumper harvest this year of course). Generally, there’s a deep lack of policy vision of what to do about rural development and agriculture in the post-land reform setting.

Unfortunately, the current debate about land and agriculture in Zimbabwe is hopelessly limited. All political parties repeat same tired old rhetoric – whether ZANU-PF’s nationalistic stance or the opposition’s version of neoliberal policy prescriptions – while donors or others seem to have an extraordinarily limited grasp of the realities on the ground. None have got to grips with the big implications – technical, economic and above all political – of the new agrarian structure.

What next? Three scenarios

So what next? Whatever the outcome of next year’s election, and whatever happens in the on-going soap opera of succession struggles and opposition coalitions formation, there are some big questions that are raised.

I want to outline three possible scenarios for the future (see also Toendepi Shonhe’s very thoughtful scenario discussion in Gravitas recently, which has some echoes):

Scenario 1: Status quo, impasse and conflict. Under this scenario, a political stalemate emerges post 2018, and with this a failure to address outstanding compensation issues, address security of tenure challenges, and the refinancing of agriculture doesn’t happen. Under this scenario, A1 smallholders continue as now – they will be doing OK, but not reaching their potential. And discontent with lack of state support will build. Among the A2 farms, a few elite enterprises with external finance will prosper, but little else and the pattern of underutilisation will continue. A long-term demand for land continues from youth, former farm workers and others, in the absence of the growth of the wider economy. But without economic dynamism more broadly, linking the agricultural sector with the wider economy, there will be few prospects for most. This is I am afraid is the default scenario, and currently, sadly the most likely.

Scenario 2. Elite capture. A political change (of some sort – in whatever permutation) results in a flood of capital from outside the country for investment in commercial farming. New joint ventures are established particularly in medium-scale A2 farms and estates (including on parastatal land), adding to a trend that has already begun. Pushed by international finance institutions, donors and global capital, this will lead to a process of consolidation, squeezing out small-scale production. Elite pacts will be struck between the state, connected land reform beneficiaries and external capital (including donors), around a narrative of economic growth and modernisation. Selective accumulation will occur among those with A2 farms, and the result will be a reversion to a large-scale commercial farming trajectory, benefiting a few, but excluding many.

Scenario 3. Smallholder led transformation. This is my favoured, ideal scenario (as you may well guess). In this scenario, A1 accumulators in particular – existing now in large numbers and electorally significant, in alliance with other rural producers – will demand support from the state (under whatever regime), gaining greater political voice. They will push for example for transfers of land from underutilised A2 areas to extend A1 resettlements, accommodating youth and others. They will demand more effective and appropriate rural finance arrangements, and service support, including infrastructural investment (as European farmers did so effectively during the colonial period). Building on an existing dynamic of accumulation from below, a smallholder led agricultural and economic transformation extends, with ripple effects on employment and local economic development. This is made possible by support from new political configurations, but these would require policy vision and commitment, seemingly currently unlikely until a new political settlement is reached, and all parties realise how important rural questions are.

Final thoughts

While land reform happened in a way that was far from ideal, it was certainly necessary. The question is what happens now, rather than harking back to past mistakes and misdeeds. And thinking this through needs evidence-informed policy planning that in my view envisages an agriculture that is productive but also equitable, with the real potentials of land reform – centred on a transformatory smallholder vision – at the core, and rejects both the depressing scenario of the status quo or the scenario of elite capture. Time, as they say, will tell.

This post was written by Ian Scoones and appeared on Zimbabweland

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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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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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