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

 

Zimbabwe’s poultry industry: rapid recovery, but major challenges

Zimbabwe’s poultry industry has shown massive growth since 2009. A range of sizes of units have sprung up everywhere – from the medium size units of 1000 birds to massive industrial scale operations. Chickens are big business.

Meat consumption has changed significantly in Zimbabwe over the last 20 years. Beef used to be the most consumed, with Zimbabweans eating on average 13kg per annum in the 1980s. According to a recent USAID report (see below), today this has dropped to only 3.3kg, the lowest in the region. Chicken and pork in particular have replaced this, with chicken consumption is now half of all meat consumed. Beef has dropped to only 35%. Meat consumption has rebounded since 2009 as the economy has improved, now estimated to be 11000MT per month, up by 20%. But the pattern of consumption has changed. This has been driven in part by taste, but also austerity as people looked to cheaper sources of protein. According to the USAID report, the retail price of economy beef which has the highest demand is between US$4.60 – US$5.00 per kg compared to the average chicken retail price of about US$3.30 per kg.

After the stabilization of the economy, many invested in poultry as a sure-fire way of making money. The data in the graphs below are from a recent World Bank report, showing the rapid increase in both broilers and layer production of day old chicks, according to Ministry of Agriculture (MAMID) data.

Day old chick production (layers)

 Day old chick production (broilers)

But there are significant challenges to these new producers.  These centre in particular on competition from cheap imports, including illegal dumping. ZIMSTATS shows that in 2011 chicken imports were 25,500 MT at a value of $13.644 million or an average of only $0.53/kg. The low price suggests much of this is offal (including ‘waste’ pieces), which is illegal to import. Additionally the volume exceeds the official quota by over 100%, representing 20% of the total demand for chicken nationally, according to a recent USAID report (see reference below).

In addition the costs of feed have escalated. Soya production has been slow to rebound in Zimbabwe, and imports are costly as only Zambia produced GM-free soya in the region. These imports are expensive as Zambia tries to protect its own growing poultry industry. This really took off when Zimbabwe was suffering outbreaks of avian influenza in the early 2000s, and then subsequently when the Zimbabwe economy collapsed, and along with it its poultry industry.

The 2013 budget statement laid out the challenges for the Zimbabwean industry clearly:

• Stiff competition from cheap imports for both table eggs and meat, threatening viability of producers;

• Rising input costs, particularly maize and soya meal, following poor harvests; and

• High volumes of illegal imports which are being sold in the domestic market at sub-economic prices

The USAID study highlighted the challenge of cheap and illegal poultry imports for the meat industry as a whole. Much of the imported poultry meat comes from Brazil which has a massive poultry industry. Products that cannot be sold in the Brazilian markets are often transported elsewhere in the world. Feet, skin, necks and other ‘offal’ are frozen and packaged and sold at rock bottom prices. Chicken pieces too are packaged and sold, again at highly competitive rates. Go to any Zimbabwean supermarket and you will find 1kg of chicken pieces being sold at $3, sometimes considerably less.

How these prices can be so low is beyond me. Maintaining a cold chain from Brazil to Zimbabwe must cost a fortune, let alone the cost of the product and its processing and packaging. While there are import quotas, many believe these are being exceeded through illegal imports. The import of offal is also illegal due to health and safety concerns. The USAID study recommended tighter import controls and the banning of offal imports, arguing that cheap imports were not only damaging the poultry industry, but also the beef industry as cheap meat alternatives were suppressing demand.

This is not just a Zimbabwean problem. In 2012, the South African government slapped on surcharges, provoking a row with the Brazil. Brazil responded by taking the dispute to the WTO, claiming that the South African’s protectionist actions were threatening the new friendship developed between the nations as a result of the BRICS partnership. It seems the diplomatic heat, and the threat of a WTO case that the South Africans have backed down, at least for now.

Undeterred by this dispute from across the border, Zimbabwe has now responded to the same problem. The 2013 budget statement noted:

“Due to unfair competition from imports of chicken, local breeders are increasingly cancelling orders for day old chicks as they fail to secure customers for their chicken as imports from outside the SADC/COMESA region retail at prices significantly lower than locally produced chicken, notwithstanding the 40% duty levied on imported chicken…. Investigations indicate that chicken imports are either smuggled or are grossly undervalued for duty purposes. In instances of smuggling, the necessary veterinary and health hazard permit controls are undermined….”.

From mid-November, the government introduced a higher customs duty “in order to level the playing field between imported and locally produced chicken”.

This is an important and welcome move. Let’s see if it has the effect it needs to. Hopefully the Brazilians will be less heavy-handed with Zimbabwe where the market is much smaller, and a trade dispute can be avoided.

Unfortunately, the issue is not just about formal trade. As already noted it is perhaps the illegal trade which is most significant, and damaging. This is well embedded in local Zimbabwean business networks, sometimes with high-level connections, and veterinary control and customs enforcement capacity remains weak. While chicken smuggling is perhaps less dramatic than drugs or diamonds, it has just as devastating an effect on the economy, lives and livelihoods.

Sukume, C. and Maleni, D. (2012). Beef CIBER Study. Constraints to Competitiveness. Unpublished report to the Zimbabwe Agricultural Competitiveness Program, DAI/USAID

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