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Agriculture fragile despite recovery signs

ONCE regarded as the breadbasket of southern Africa during the first two decades after Independence in 1980, Zimbabwe has for the past 10 years become a perennial importer of food and relying more on food handouts from aid agencies after “farm invasions” which started in February 2000.

Zimbabwe’s agriculture sector is, however, emerging from the intensive care unit after a decade which was characterised by political unrest, drought, shortage of inputs and fuel, declining economy, unreliable electricity for winter farming and absence of collateral to access loans.
It was against agricultural growth that Finance minister Tendai Biti revised upwards economic growth projection figures.
The new projected economic growth rate for 2010 is now 8,1%, up 2,7 percentage points from 5,4%.
Biti and the International Monetary Fund had initially projected an economic growth rate of 7,7% which they later revised downwards to 5,4% in July citing slow performance of the economy.
Analysts, however, say the sector’s full recovery remains fragile and will depend on political and economic stability, reliable electricity, availability of inputs, cheap loans for farmers and favourable rains.
Zimbabwe Farmers’ Union president Silas Hungwe told businessdigest that agriculture production had improved a lot in Zimbabwe.
He said: “It was important for farmers to build on this year’s encouraging output as all major sectors of the economy’s revival largely depend on agriculture.
“Compared to previous years the figures are encouraging. However, there is no support for the small grains, but government is making subsidised fertiliser available to farmers,” he said.
Hungwe said agriculture was the centre of gravity for the economy contributing 19% of the gross domestic product (GDP) last year.
GDP is the most important measure of economic activity in the country as it is the crossing point of expenditure, output and income.
This year’s growth was mainly driven by tobacco which doubled to 120kgs on the 2009 figure. More than US$320 million was realised from the sale of the crop.
In a statement this month, the Tobacco Industry and Marketing Board (TIMB), said planting for the 2011 crop had started while indications from seed sales showed that a minimum of 90 million kgs would be produced.
About 72% of the crop that was sold this year came from contract farmers.
“We are very happy to see this recovery and I think it is sustainable and it means the whole economy will recover as well,” said Wilson Nyabonda, the immediate past president of the Zimbabwe Commercial Farmers’ Union.
However, in an earlier interview with businessdigest Commercial farmers’ president Deon Theron said the country will need about US$264 million to import about 800 000 tonnes of maize and 339 000 tonnes of wheat to meet the annual national requirement.
“About 800 000 tonnes of maize is needed for consumption. Maize is being imported at between US$160 and US$180 per tonne,” Theron said.
The national maize consumption requirement stands at two million tonnes per annum but Theron sees maize output this year at 1,35 million tonnes, a deficit of about 800 000 tonnes.
Wheat is Zimbabwe’s second staple grain after maize but the farmers have failed to meet its annual consumption requirements of around 350 000 tonnes.
This year’s national wheat target was set at 60 000 hectares but farmers planted only 11 000 hectares. Theron said Zimbabwe needed to import wheat worth over US$128,8 million to meet an expected shortfall of 339 000 tonnes, which could cripple operations.
Farmers, hamstrung by lack of capital, high costs of inputs and land tenure issues and ownership wrangles, expect to produce 11 000 tonnes of winter wheat planted on 3 100 hectares this year.
This is against a national annual demand of 350 000 tonnes, said Theron.
Treasury allocated US$122 million to agriculture which was said to be grossly inadequate for a sector that is expected to spur economic growth.
Of that amount there was no specific funding for A2 commercial farmers.
A total of US$41 million was set aside for
the ministry’s capital expenditure, with US$11,8 million earmarked for rehabilitation and expansion of 63 irrigation schemes nationwide.
Agricultural Marketing Authority (AMA) chairman Basil Nyabadza said the budget sent a clear signal that commercial farmers were on their own now and have to look for alternative funding if the sector is to be restored to its former glory.
“A2 have been cut loose from the treasury’s umbilical cord. This marks the birth of the new farmer who took over Mr Jones’ farm. We have now to look at in-house solutions to farmers’ financing needs,” Nyabadza said.
“As AMA, we have started looking at comprehensive ways of funding agriculture on a permanent basis. Agriculture should look at alternative ways than continued reliance on Treasury. We need a revolving fund outside Treasury to spur agricultural production once more.”
In the 2011 financial year, the government has sourced loans from financial institutions for A2 farmers amounting to over US$350 million.
The funding, among other things, will cater for tobacco production (US$158,9 million), cotton, soya and horticulture will receive a combined US$49,7 million and lending to individual farmers totals US$71,9 million.



Paul Nyakazeya

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