HomeBusiness DigestEarly preparations for agriculture season crucial

Early preparations for agriculture season crucial

FOR over a century agriculture has been the mainstay of the Zimbabwean economy, although between 1997 and 2012 agricultural operations declined to a horrific extent. The result was a considerable reduction in employment, and as a result a further decline in consumer spending, repercussing negatively upon the retail, wholesale and manufacturing sectors.

Nationally essential foreign exchange inflows, mainly from the export of tobacco and cotton, were considerably reduced, with marked increases in foreign exchange outflows applied to the importation of essential agriculturally-based foodstuffs including maize and maize meal, wheat, beef, poultry, tea and coffee. The entire economy progressively declined, and nationwide poverty became ever greater.

Belatedly and not sufficiently, government took some action which marginally facilitated improvement in the 2012/2013 season’s agricultural output, including timeous available of essential inputs, and slightly enhanced prices on crops sold to government entities such as the Grain Marketing Board (GMB).

The following season ( 2013/2014) was markedly better, greatly enhanced by favourable climatic conditions. Nevertheless, Zimbabwe’s agricultural output generally remain far below that achieved prior to Independence, and during the 1980s.

In those days Zimbabwe was known as “the breadbasket of the region”, for its production of agricultural produce considerably exceeded national needs.

Nationally and regionally, the key foodstuff is maize, and in Zimbabwe’s agriculturally viable days the country was not only producing the entire national need (1,8 million tones), but was also exporting up to 600 000 tonnes per annum. After the millennium Zimbabwe’s output fell by two-thirds to 600 000 tonnes, but by the 2012/13 season achieved a marginal increase to 800 000 tonnes, which still necessitated imports of one million tonnes.

Although final figures are not yet available, it is probable that the 2013/2014 season crop will approximate 1,2 million tonnes, which is double that of a few years ago, but still markedly short of the national need, necessitating imports of 600 000 tonnes.

But Zimbabwe dare not rest on its laurels of an improved last agricultural season, for much greater production is a prerequisite of critical employment creation, economic stimulation and growth, containment of the immense imbalance between foreign exchange receipts and payments, enhanced fiscal revenue inflows, and much else which is essential for the wellbeing of Zimbabwe.

Achieving considerable upturn in agricultural production is contingent upon constructive and effective governmental policies, and the unequivocal implementation of those policies. Moreover, as preparation for the coming season must commence timeously, government must act now.

The actions required include:

Although commendably government finally commenced its fulfillment of long overdue issuance of quasi-title to farms, as yet it has only done so to a minimal extent. It issued 827 A1 permits to indigenous farmers, the key characteristics of the permits being:

“Full land ownership”, for 99 years, vesting in the permit recipients;

The permits can be utilised as collateral security for borrowings, although banking and financial institutions have yet to satisfy themselves as to whether the permit terms and conditions are such that the permits are acceptable collateral security;

The permits are subject to inheritance laws, and can be varied to include spouses;

The lands may only be used for agricultural, pastoral and ancillary residential purposes, and in the event that a permit holder discontinues such operations, and does not sub-let the property for such usage, government can terminate the permit.

However, the number of permits issued against the number of farms in Zimbabwe is minimal and therefore government needs to, ahead of the forthcoming agricultural season, issue the permits for all occupied farms, devoid of racial considerations.

In contrast to most previous years, government must ensure the timeous availability of all essential agricultural inputs.

Similarly, and within the constraints of limited time and financial resources, irrigation resources must be enhanced insofar as reasonably possible, concurrently with effective maintenance and upkeep of existing irrigation resources and dams;

Economic recovery must be intensively accelerated, resulting in greater resources of banks and financial institutions, thereby enabling such entities to maximise lendings to the agricultural sector;

Farmers should be assured of ability to sell their crops to private sector purchasers, at mutually negotiated prices, instead of certain crops having to be mandatorily sold to state-controlled enterprises, such as the GMB.

Zesa must be directed to ensure regular and reliable energy supplies, during the agricultural season to all sectors of agriculture, ensuring the operations of irrigation systems, tobacco curing barns, and other energy-driven farming resources.

Subject to such governmentally-driven policies and actions being fully pursued, and reasonable climatic conditions, the agricultural output in 2014/2015 will exceed that achieved in the last season.

As a result, there will be enhancement of employment, greater economic activity, diminution of dependency upon imports (and therefore lesser outflows from Zimbabwe of currency), and potentially increased export-income generation. Concurrently, there will be increased inflows to the fiscus by way of such revenues as VAT and on expenditures of the farmers.

Despite the desirable growth of the mining sector in the last few years, raising that sector to a key component of the Zimbabwean economy, there is potential for agriculture to again be the foundation and mainstay of the economy, provided government rapidly takes the necessary actions to ensure the growth of agriculture.

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  1. Banks cannot accept these “leases” as colateral unless they can be seized and then resold in the event of default. it is simple as that. Colateral that cannot be realised, has no value as colateral. Of course there is also the rather tricky problem that someone else usually has legal title to this same land.

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