WHOEVER coined the phrase “Land is the economy and the economy is the land” had the genius of a lyricist to state the obvious but not enough of it to foretell the damage that would unravel the
economy because of government’s twisted agrarian policies.
“Agriculture is the mainstay of the economy and will anchor the country’s economic transformation,” Economic Development minister, Rugare Gumbo, said on Wednesday at a pre-budget consultative dialogue in Harare. “The 2006 national budget should therefore focus on increasing production.”
But a series of policy shifts involving powerful bureaucrats have converged to worsen agricultural problems for an already weakened economy, a parliamentary portfolio committee report on the state of agriculture in Zimbabwe reveals.
Stakeholders in the agricultural sector bemoan the steady decline in agricultural production in the past five years due to a number of factors, chief among them a severe shortage of foreign currency, fuel and sub-economic producer prices.
The net effect of these constrictions to the sector, according to the report, is that crop yields will be reduced considerably if something is not done immediately.
Politicians have tended to apply gloss to the sector and even exaggerated production figures to mask the reality of a failed land appropriation programme.
For instance, while seed producers project a 20 000-tonne shortfall in seed requirements which need to be imported at a cost of US$35 million, Ministry of Agriculture officials claim there is enough seed to cater for the summer crop.
“The information about the availability of inputs for the summer crop is quite confusing,” the parliamentary committee said.
“Such conflicting situations will have serious ramifications on planning and production.” Seed houses need foreign currency to import spares to refurbish machinery and bolster capacity to meet demand. Their efforts to secure hard currency on the auction floors have been unsuccessful.
That is not all.
Fertiliser companies have failed to secure foreign currency to import potash and ammonia needed for production.
The report says companies complained that they had to scale down operations at a critical time, considering the crucial role their product plays in agriculture. One company had to close its plant in Msasa owing to failure to secure foreign currency, while those operating had to resort to producing non-potash fertiliser that compromises yields.
A proposed programme which entailed setting up production targets for strategic crops has failed to attract takers.
In a bid to meet basic minimum production requirements, government came up with an ambitious target-oriented model dubbed “Command Agriculture”, where each of the 10 provinces would select 200 farmers apiece to participate in the scheme.
The farmers were expected to produce food security crops, livestock, and industrial and export crops over a targeted 1,9 million hectares with a projected production of 8,5 million tonnes of various crops at an estimated cost of $14, 7 trillion.
Treasury could not bankroll the project, while farmers and other stakeholders said they were ignorant of the Command Agriculture model, neither were they consulted on the issue.
“The gap between government-set targets and the available stock of inputs points to a serious lack of planning by government bureaucrats,” the report says.
More importantly, a total of 33 firms, or about a fifth of Zimbabwe’s export companies, have closed shop during the first six months of the year due to the economic crisis and land seizures, according to a government agency.
Of these, 12 agricultural firms stopped operating after their farms were acquired by the government under the land reform programme, the Export Processing Zone Authority of Zimbabwe said in a recent report.
“Twelve companies stopped operations after the farms they were operating on were taken for redistribution. An additional 12 companies have closed shop citing, among other things, unfavourable foreign exchange rate and loss of international markets as Zimbabwe is considered a risk country to do business with,” said the report.
The company closures resulted in a loss of export revenue totalling about $17,6 million, according to the report.
Close to 7 000 jobs were lost due to the closures in the export sector, which employs 26 000 people.