Zimbabwe Farmers’ Union’s deathwish

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SINCE Zimbabwe embarked on its ill-conceived land reform programme in 2000, its agricultural activity has been semi-moribund.

Report by Eric Bloch

Farmers endowed with great expertise and necessary capital resources to fund their operations generated immense productivity, making Zimbabwe the “breadbasket of the region”.

So great was the crop output that Zimbabwe was able to satisfy national needs for maize, wheat, sorghum and many other agricultural outputs, as well as export surplus to neighbouring countries.

The bountiful production provided employment for more than 300 000 agricultural workers, and created downstream employment in those manufacturing operations that value-added the crops produced.

However, with the pursuit of the land reform programme, the majority of the experienced and financially-secure farmers were evicted from the land.

The land was then allocated to so-called “new farmers”, most of whom lacked the necessary in-depth expertise, and financial resources. Consequently they could not timeously fund the purchase of essential inputs ranging from seeds to fertilisers and chemicals; neither could they afford energy supplies nor maintain irrigation systems.

As a result, agricultural productivity declined and Zimbabwe became dependent on importation of essential foodstuffs.

At the same time most of the much-experienced farm workers lost their employment, becoming poverty-stricken. Admittedly, in the last few years there has been an increase in agricultural output, but it still falls far short of the levels of production that prevailed prior to the disastrous land reform programme.

Key to productivity decline is the inadequacy of funding available to new farmers. Whilst their predecessors could supplement such funding in addition to borrowing from banks and other financial institutions, the new farmers cannot do so.

That inability to access funds for productive, farming operations is due to lack of collateral security, a world-wide prerequisite to support borrowings. The previous farmers were able to encumber their farms in favour of lenders, thereby giving the lenders the security necessary to assure recovery of monies lent. The ability of the pre-2000 farmers to provide security was founded upon title to the ownership of their farms.

In contrast, with effect from 2000 all right and title in and to the land was vested in the state. New farmers who settled on the land were not accorded any ownership rights, only being entitled to occupy and work the farms by virtue of 99-year leases (although government reserved the right, in many of the leases, to terminate them on three months’ notice!).

Belatedly, and with great reluctance, government eventually recognised that monumental constraint upon agricultural productivity. When opening parliament in late 2011, President Robert Mugabe stated legislation would shortly be tabled before parliamentarians to restructure the farm leases in a manner as would accord new farmers leases with collateral security to extend to lenders.

However, nearly a year later, no such legislation has been enacted. Only a few weeks ago, Mugabe said reversion to the issuance of title deeds, or modification of leases would under no circumstances be considered, hence new farmers are facing the 2012/2013 agricultural season with the same appalling illiquidity constraint that has impaired agricultural production for many years.

Last week the Zimbabwe Farmers’ Union (ZFU), whose membership comprises new farmers, issued a statement urging that under no circumstances should government change its policy on the 99-year leases. The ZFU emphatically stated that doing so would be prejudicial to new farmers, for they would then use the lands, or the leases, as collateral to access funds from the financial sector, whereupon the lenders would undoubtedly dispossess the borrowing farmers of their occupancy and operational rights.

The ZFU was in fact implying new farmers would not productively use their borrowings, and therefore fail to service their repayment obligations and lose the land they occupy. One inevitably draws the conclusion that by so doing, ZFU believes that even if accorded necessary funding, members would not use the funds procured in any productive manner, and would fail to meet repayment obligations.

Such scepticism of the fiscal morality and probity of its members is shocking, and seeks to discourage government from pursuing a key initiative necessary to ensure the recovery of agriculture.
If agriculture is to be restored to its former glory, it is essential Mugabe and government disregard ZFU’s death wish, and take swift action to enable new farmers to source funding essential for their operations.

Ideally, Zimbabwe should reinstate title deeds for rural land, albeit possibly with a constraint that transfers can only be effected in favour of those who are alluded to as “new farmers”, and barring transfer to anyone already possessing title deed vested rights of land usage ( One Man, One Farm.) Nevertheless, many politicians and their associates already have usage rights on several farms.

In the alternative, if reversion to title deeds is unpalatable to government, the leases should be modified to assure their continuity for 99 years, and to accord them ready transferability to alternative lessees, whilst again entrenching the “One Man, One Farm” restriction.

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