The agricultural industry in Zimbabwe is made up of three main components — the large scale commercial and agribusiness sector, the small scale commercial farming sector and the communal farming sector. Despite the shambles of the “fast track land reform” exercise, the industry remains concentrated in these three sectors.
The communal farming sector occupies about 20 million hectares — 16 million legally classified as such and perhaps 4 million hectares of acquired land (legal and illegal) which is now occupied virtually on a communal or tribal basis.
The small scale commercial farming sector comprised about 24 000 individual farms in 1997 (former Purchase Area farms) and now has perhaps another 50 000 units located on what were large scale commercial farms.
What remains of the large scale commercial farming industry comprises perhaps 5 million hectares under A2 settlers and another 4 million held by large agri-business firms (Triangle, Hippo Valley, Mazoe, Mwenezi Ranch and conservancies.
These include a few of the old post-independence farmers in specific industries such as dairy, tobacco and fruit. Contested land (land occupied without legal transfer) remains about 8 million hectares and can only be released for proper settlement after the payment of compensation to the owners.
In the past (up to 1997) the industry employed a third of the national labour force, generated directly and indirectly about a quarter of the Gross National Product of the country and half its exports. As an exporting nation, food prices in Zimbabwe were held down by market forces to a level that reflected regional and global market conditions less the cost of bridging to markets.
In times of drought, the commercial farming sector could irrigate up to 300 000 hectares of land and ensured that the output of tobacco and food crops were adequate to meet demand. In fact, in some cases (tobacco and horticulture) output actually rose as yields were higher in dry years and crop quality enhanced.
Crop yields were generally above regional averages and in many cases comparable to the best in the world. Farmers borrowed an estimated US$2 billion a year against their title deeds to fund their activities and were able to secure their inputs on time and at a world market price. This enabled them to meet stringent production timetables and targets and the thereby optimise output. Communal farmers dominated the markets for maize (60% on average), cotton (80%) and small grains as well as ground nuts and beans.
They also supplied about a million small livestock to local markets and for consumption and about 20% of all cattle sold on local markets. Their major problem was not being able to hedge against the weather or manage the outcome. In a drought year national dependence on the commercial farm sector increased dramatically.
In 2014/15 season we have seen rainfall decline to about 80 or 90% of average, but its distribution has been very uneven: a very dry start in October and November, a very wet December and then little rain in January and February.
This has not been kind to the crops. Early planted crops and crops assisted with irrigation have done well and there will be a critical volume of tobacco of good quality to meet market demand.
However, the balance of the tobacco crop (about half) is of poor quality and low yield and is likely to find a buyer with difficulty and even then at very low prices.
It is the food crops that have been hardest hit. Late planted maize (always low yield) is going to yield very little, in many cases nothing. Even the small grains have suffered and are not going to yield very much.
The same fate applies to all other rain fed crops — many of critical importance to the rural community. The cattle look wonderful throughout the country but face severe water shortages in the dry season as river flow has been very limited.
This was not a season like 1983 or 1992 when the rains failed almost totally and we had a total crop failure, but nevertheless — it is going to be a hungry year with major food shortages in many districts.
I personally do not see a maize crop of more than 600 000 tonnes. Small grains well down on last season. Tobacco will probably decline by 20% in volume and more in value as low grade tobacco will attract very low prices and may not even find buyers. Sugar likes a dry season if the estates have enough water and they might just get through the winter on what is in the dams.
Reports indicate that tea production is also good but there is very little of anything else. Agricultural contribution to our national economy is a fraction of what it was (overall it is down by about 70% and this year will be much worse) and therefore I expect agricultural output to fall in 2015 and this will further exacerbate the overall decline in the economy. It will also put greater pressure on our balance of payments with imports of food taking a much higher proportion of available import capacity than 2013 or 2014.
The impact on consumers will be significant as the region as a whole is going to have to import basic staples, like maize, for the first time for some years. Zambia has had too much rain as has Malawi. South Africa will also have to import grain to meet demand as their season has been both drier and more dysfunctional than usual.
Already basic food prices in South Africa are up 30%.Because of our open market policies and the use of the US dollar, we will not experience any shortages of food stuffs as was the case in 2008, but the shortage of disposable income will be very serious. VAT collections and the sale of basic food items in 2014 declined by 25% on average — in the first quarter of 2015 the indications are that this decline is continuing.
It is going to be this failure to make enough money that will create the specter of widespread hunger and malnutrition in 2015 and into 2016. Food stress is going to present in many rural districts and in all urban areas and this is going to be a major challenge for the government, the aid agencies and the affected communities.
The wider economy was already in a crisis created by the collapse of confidence in 2013 and the flight of capital from the banks and our markets. Revenue to the State in 2015 will be 17% lower than in 2013 and continues to decline. Under these conditions the failure of the 2014/15 agricultural season is a disaster.
These articles are coordinated by Lovemore Kadenge, president of the Zimbabwe Economics Society. Email —firstname.lastname@example.org; Cell +263 772 382 852
Eddie Cross is a renowned economist, industrialist and MDC-T Member of Parliament for Bulawayo South.