HomeEconomyBig vs. small agric debate

Big vs. small agric debate

THE announcement over last weekend by Agriculture minister Anxious Masuka that government was this week beginning the repossession of underutilised farms. The minister encouraged struggling A1 and A2 farmers to go into government-approved joint ventures requires us to revisit the big agriculture (big-Ag) and small agriculture (small-Ag) debate.

The Brett Chulu Column

The debate is informed by the global trend of farm consolidation or corporatisation of agriculture, pushing small farmers under. At face value, Zimbabwe seems to be bucking this trend in favour of balkanising farms.

Context is essential in order to ascertain if Zimbabwe’s farm balkanisation process makes economic sense.

The United States is the world’s largest agricultural products exporter.

The Netherlands is the world’s second largest agricultural exporter, with annual exports of agricultural products ranging between US$90 billion – US$100 billion, about five times the size of the Zimbabwean economy.

The contrast between the US and the Netherlands in terms of agricultural organisation is remarkable. The Netherlands is merely 300 km in a North-South direction and about 260 km East-West — that is 0,37% the area of the US. Put differently, the US is 270 times the area of the Netherlands. There are 2,2 million farms in the US, translating to one farm per 150 people.

This was roughly the same ratio in the Netherlands in 1980. Today, in the Netherlands the ratio sits somewhere between one farm per 250-300 people, reflecting consolidation of small farms. In Zimbabwe, the pre-land reform ratio was about one farm for every 1 700 people. Post-Land Reform, with about 150 000 farmers in both A1 and A2 given land, the ratio is one farm for every 100 people. Clearly, the land reform programme brought land distribution to within the farm concentration levels of two of the world’s top agricultural producers.

The fact that Zimbabwe’s one-farm per 100 people national ratio is within the levels of the US suggests that there are serious implications for Zimbabwe’s agri-food revival and development agenda.

The attempt to further subdivide farms does not make optimal economic sense as it results in the non-communal farm land ratio falling below one farm per 100 people. In fact, there is a strong case for allowing consolidation of some A1 and A2  farms to allow big-Ag to happen.

The real issue for the farms is raising productivity, not further dividing up farms. Productivity on A1 and A2 farms can be established if our focus is bigger than food self-sufficiency.

At the levels of one farm for every 100 Zimbabweans, the focus should be on export of agri-food and agri-products. That is what we learn from similar configurations in the US and the Netherlands.

In the Netherlands 80% of the food produced is exported. If we maintain levels of one farm per 100 people levels or less as is likely to happen with the new thrust announced this week and focus  on meeting domestic needs, we will not build enough strategic headroom and big enough a vision to make the right steps. At the moment, as a country, we do not have the required strategic investments that matches the farm concentration levels (number of Zimbabweans per farm).

What are the right strategic investments we need as a country?

We need a culture of innovation to be built and sustained in the agro-value chain. In the Netherlands, there is a strong culture of innovation at all levels of the agro-value chain. In the Westland region, the largest horticultural cluster in the Netherlands farms is not cordoned off to allow cross-fertilisation of ideas by farmers on a daily basis. The best description for this culture is a geo-economic cluster as discovered by Michael Porter.

The Netherlands horticultural cluster is a good example. The cluster is built around the Wageningen University of Research. This is a 100% dedicated agriculture research university, regarded as the best in the world. We have agro-start-up firms and established agro-tech firms located close to each other. We have experimental horticulture farms and production farms. This is called the Food Valley.

All these entities in the Food Valley interact and feed off each other and it is these ongoing interactions facilitated by proximity that generate new ideas on a daily basis, developing a pipeline of concepts that become commercialisable products.

The role of government in the Food Valley is one of casting a broad vision and subsidising and funding research and development. For example, the government cast the vision “twice much food using half as many resources.” This set the Food Valley on an ambitious journey of research and development and the government willing to avail financial assistance.

As a result, agronomic innovations that result in serious water-saving have been developed. For example, Dutch farmers are now able to produce 1 kg of tomatoes on just four litres of water as opposed to the conventional 300 litres of water per kg.

Some glasshouse production units only require rain water harvested to enable production for the entire year.

We can begin to imagine what this kind of technology could do for a country like Zimbabwe in terms of addressing the food production challenge occasioned by recurring droughts. Dutch Food Valley agro-tech firms have developed hand-held devices connected to an app on a phone that can collect and analyse soils and return a report on the nutrition formulations required.

The Dutch have applied non-GMO productivity enhancements that have resulted in some tomato varieties that yield 68 kg per plant — that is about 2,5 times the yields of top tomato varieties from elsewhere. The latest break-throughs from the Food Valley is the use of LED light at specific light wavelengths to enable plants to produce 24 hours. The newest thrust in the Food Valley whose vision was cast by the government is sustainable agriculture.

This has seen greenhouse production using nearly zero synthetic pesticides, with biological pest control taking over. Innovative farmers, driven by the Dutch farming innovation culture have developed packaging material from waste tomato stalks.

What we notice is that an agro-cluster is a geo-economic zone that births a number of industries and economic sectors that are at the top of the competitiveness game. This agricultural vision Zimbabwe should embrace instead of a narrow world of food production. We cannot rise beyond the size of our vision. We need big and bold visioning.

The Zimbabwean A1 and A2 farming developments will struggle to hit productivity levels big enough to sustain an agricultural export market due to the issue of security of tenure that has not been satisfactorily settled.

How does the big-Ag vs. small-Ag debate settle?

A mixture of small-Ag and big-Ag is needed in Zimbabwe with small-Ag dominating. The unit of analysis is not the size of land — it is productivity. The distribution of land from about 7000 commercial farms to 150 000 holdings classified as commercial carried with it an economic obligation to raise productivity to world class levels.

That required a re-organisation of the entire agro-production infrastructure around top-notch research and development to enable production that far exceeds domestic food requirements. Our path has been marked for us by our Land Reform choices — we need to sort our land tenure security and embark on a serious programme of developing a domestic agro-tech cluster that will churn out proprietary agro-technologies.

The day we will have a dedicated agriculture research university will be the day we begin to match the minimum standards we inadvertently set ourselves by trying to match the farm concentration ratios of the Netherlands and the US. Anything less will be a cul de sac of inefficiency and political grandiloquence.

Chulu is a management consultant and a classic grounded theory researcher who has published research in an academic peer-reviewed international journal. — brettchuluconsultant@gmail.com.

Recent Posts

Stories you will enjoy

Recommended reading