THE year 2021 has witnessed several changes on the agricultural front. There has been significant growth in the sector, riding on a good rainfall season. Some agricultural sub-sectors like cotton have continued to be affected by delayed payments to farmers. But in the past few months, the economy has also been affected by rocketing wheat prices. Our business reporter, Freeman Makopa (FM) caught up with Douglas Karoro (DK), the deputy minister for Lands, Agriculture, Fisheries, Water and Rural Development to understand how these several developments will affect the economy. Below are excerpts of their discussion:
FM: Wheat prices have rocketed 16% to US$510 per metric tonne (mt), from US$400. Please tell us the implications on Zimbabwe.
DK: The increase in wheat price will not have significant impact since Zimbabwe had stocks in the Strategic Grain Reserve. In addition, we have started receiving grain deliveries from the farmers. The increase in price requires the ministry to improve strategies to ensure that we increase wheat production to meet national demand of 400 000mt per annum.
FM: What is the role being played by the agricultural sector in Zimbabwe?
DK: Agriculture occupies a central place in the Zimbabwean economy for employment, incomes and poverty reduction. It used to contribute 15% to 18% to gross domestic product (GDP), which was at 11,5% in 2021, 23% to total formal employment and provides livelihoods to approximately 70% of the rural population. About 54% of these are women. The sector also supplies about 63% of industrial raw materials. The share of agriculture to manufacturing value addition is 60%, while the sector’s share to export earnings is 30%. Agriculture-related employment supports a third of the formal labour force.
FM: The sector’s contribution to GDP is declining. What is driving this?
DK: The downward trend is due to reduced production and productivity due to drought, reduced investment, lack of capital and unavailability of long-term finance. The agricultural sector has important linkages with the industrial sector, as a supplier of raw materials and a market for manufactured inputs.Maize, tobacco and cotton account for more than 50% of the agricultural GDP, with tobacco leading the pack with 25% followed by maize at 14% and cotton at 12%. Ten percent is accounted for by the beef and fisheries sectors whilst about 24% is devoted to livestock like sheep, goats, pigs, poultry and ostrich.
FM: What is the contribution of the other commodities?
DK: Within the mix of commodities; tobacco, cotton, sugar, horticulture, tea and bananas collectively account for about 40% by value of national exports. The performance of the agricultural sector therefore has a direct bearing on overall national economic performance and on human development, especially with regard to national and household food and nutrition security.
FM: If Zimbabwe grows so much of its own food, is the Presidential Input Scheme needed?
DK: The Presidential Input Scheme is still needed to keep up the momentum.
FM: What plans are in place to stimulate the growth of the agricultural sector?
DK: The National Development Strategy 1 outlines a host of actions and targets for realisation of self-sufficiency and food surpluses that will see the re-emergence of Zimbabwe as a major contributor to agricultural production and regional food security in the southern Africa region and beyond. The programme envisages greater involvement of the domestic financial sector, since heavy reliance on government support has proved to be unsustainable.The Agriculture and Food Systems Transformation Strategy is the broad strategy which is being pursued by the ministry to transform agriculture from a US$5,2 billion economy to a US$8,2billion economy by 2025. This is anchored on the following pillars: the Agricultural Recovery Plan, the Livestock Growth and Recovery Plan, the Horticulture Recovery and Growth Plan, the Accelerated Irrigation Rehabilitation and Recovery Plan and the Zimbabwe Climate Smart Agriculture Investment Plan.
FM: There has been talk of climate change. What has been the effect of climate change in Zimbabwe so far?
DK: Climate change has had the effect of reducing agricultural productivity and production, mainly due to the effects of droughts, floods, disease outbreaks of plants and animals. This has had the following effect:Food insecurity, has been consistently growing in Zimbabwe. During the period 2015 to 2020, the proportion of food-insecure rural population ranged between 30% and 59%. Urban vulnerability was also on the rise, reaching 30% or 2,2 million people by 2020. Further, the proportion of chronically food-insecure people in rural and urban communities increased from about 500 000 in 2015 to about 1,7 million people in 2020. The agriculture sector contribution to GDP has been declining due to underperformance, which at its peak contributed 19% to GDP.
In addition, Zimbabwe incurred a huge annual grain import bill of around US$600million used in importing wheat and maize to augment local production. Recently, the World Food Programme said despite good harvests this year, more than five million people will likely face starvation.
FM: What strategies has government deployed to end hunger?
DK: Government, in collaboration with development partners, is implementing resilience building programmes under various programmes, which include the Green Climate Fund project, the Zimbabwe Resilience Building Project and the Smallholder Irrigation Revitalisation Programme. Government, through the Ministry of Public Service, Labour and Social Welfare also implements a feeding scheme for vulnerable households to enable them access grain from the Grain Marketing Board. Government is rolling out the Pfumvudza programme to enable farmers access inputs to fund production for household consumption.
FM: In 2007, the Reserve Bank of Zimbabwe introduced the Farm Mechanisation Scheme. What has been the effect?
DK: To some extent, farmers utilised the facility to improve land preparation and farming operations. However, the effectiveness of the programme was hampered by lack of back-up maintenance services and also due to low numbers of machinery which could not cover the huge deficit of machinery.
FM: Economic analysts believe that command agriculture has failed. What is your assessment?
DK: To a large extent the statement is false. This is so because, command agriculture, now the National Enhanced Agriculture Productivity Scheme (NEAPS), is an agriculture financing instrument that has enabled farmers to access inputs and finance to undertake timely farming operations on irrigated as well as dryland farms. Farmers are not restricted to employ climate-proofing methods on fields planted under NEAPS. In addition, NEAPS is also financing capital projects such as irrigation development, which is used as a measure to mitigate the effects of climate change, which is attributed to mid-season droughts.
Farmers can also access irrigation and mechanisation equipment through other facilities available to cushion them from climate change.The coming on board of the Agricultural Finance Corporation also opened avenues for farmers to access long-term capital to finance irrigation development projects.
FM: Government has said it is projecting a 10% growth in the agricultural sector. What will drive this growth?
DK: The growth will be driven by early preparedness for the 2021/22 summer season in terms of inputs distribution, expected good season as normal to above normal rains have been forecast and an increase in the number of irrigation schemes revitalised under government and private sector initiatives.