eBusiness Weekly
Eben Mabunda
The Bona-Simba divorce saga which reportedly unearthed a contention over 21 farms belonging to Bona Mugabe exposes the inefficiencies in Zimbabwe’s agricultural sector in the aftermath of the land reform program.
The case reignites the conversation around land tenure, multiple land ownership, and the financing gap in the agricultural sector. Indirectly, this has a bearing on Zimbabwe’s food sufficiency status.
The 2022 Zimbabwe Vulnerability Assessment (ZIMVAC) report projected 3,8 million rural individuals to be food insecure at the height of the 2022/23 agricultural season in Zimbabwe.
As the land reform program was fast tracked, it lacked proper planning and therefore created multiple capacity challenges for smallholder farmers who took over from white farmers.
These include a lack of adequate farming equipment, a poor supply of other farming inputs like fertilisers and quality seed, and a farming knowledge gap — all of which resulted in lower yields and food insecurity. These are compounded by erratic rainfall patterns, declining soil fertility, low investment, shortages of farm power, poor infrastructure, and poverty.
Two matters demand resolve to rewrite Zimbabwe’s agricultural narrative, eliminate inefficiencies in the sector and restore Zimbabwe to its former breadbasket status. The first is that of land allocation and ownership and the second; is the security of land.
The “one man one farm” policy created under the President Mugabe era operated on proverbial terms with no physical translation whatsoever as evidenced by Bona’s reported “21 farms.” If a “one man one farm” were implemented to the dot, more Zimbabweans would get access to land and present prospects for better land use.
Without a doubt the allocation regime needs revision; incorporating capacity assessment and skills evaluation to ensure land is reallocated to capable farmers.
To those who have been allocated land but have failed to be economically productive for two decades; partnerships with capable farmers may need to be tabled based on the allocated land — bearing in mind that farming has framed livelihoods for hundreds of thousands for a long time now.
Dispossessing the ‘failed farmers’ without a carefully thought out plan may prove disastrous.
We may differ on which alternative would be best but here is the point: land distribution and allocation need a revisit.
Farmers were given 99-year leases where the Government is the lessor and the farmers; were lessees. Under the arrangement, farmers can engage in a variety of agricultural operations.
While this has given farmers the freedom to practice agriculture, poor mechanisation, a lack of skills, and a lack of capital have prevented farmers from maximising their results.
Despite frantic efforts by the Government to support farmers’ activities by providing farming materials and equipment, this has not resulted in much other than improvements for one or two seasons before returning to default conditions.
In 2007 and 2008, the Reserve Bank of Zimbabwe (RBZ) conducted quasi-fiscal operations on behalf of the Zimbabwean Government to carry out the farm mechanisation initiative. In 2017, a similar initiative Command Agriculture was rolled out by the Government, which although it scored some successes, did not eliminate the inefficiencies in the sector.
The country’s land bank “Agribank” was rebranded to AFC Holdings in 2021 with the creation of 4 sub-units.
I contend, without additional real investment and the termination of the 99-year leases, the change of name does not translate to a new era for the bank per se. A solid value proposition is also mandatory in the insurance space where the institution has shown interest, a sector that requires solid capitalisation and sound reinsurance backing.
Without a doubt, this would allow, not just AFC but other banks to extend credit to local farmers, leveraging on the land as security.
Concerns about land ownership are essential to the Government’s deliberations. Particularly if small-holder farmers are given land ownership and they seek credit from banks using their farms as collateral.
Failure on the part of the farmers to service the debt would translate to the farms being possessed by the respective financial institutions.
The point of note is that, before the land reforms, white farmers would access credit from financial institutions and advances in the form of other inputs based on long-standing contracts with multiple sector players.
This created a thriving farming ecosystem, revolving around the land which the farmers owned. As such the white farmers enjoyed high yields, and insurance in the event of drought and this penultimately gave Zimbabwe a bread basket status.
Given that many financial institutions in Zimbabwe are foreign-owned for example Ecobank, Nedbank, Stanbic, First Capital Bank etcetera—this poses a point of conflict for policymakers as they fear possession of land by foreign institutions in the event of default by local farmers.
The solution is a “give and take” arrangement.
One in which the Government gives farmers ownership of land but issues clearly outlined parameters to allay the concerns.
The government may need to set up a separate investment vehicle (run by professionals)that acts as a guarantor of smallholder farmers, participates in the vetting of farmers for credit, and in the event of default; is ready to repay the foreign banks and holds the authority to dispossess the defaulting farmer and assumes responsibility for the reclaimed farm.
It is reported that at of the close of 2022, the Government had approved about 2 000 joint ventures through the Agriculture Ministry covering approximately 200 000 hectares. The results are yet to be seen.
Under the Second Republic, a land audit was concluded in early 2023. We await the findings of the audit and the recommendations therefrom.
Whichever way this is looked at; the reliance of the agricultural sector on state funds needs to be broken with an all-inclusive stakeholder panacea developed, bearing in mind 60 percent of the population receive income from the sector which provides 60 percent of the inputs used in Zimbabwe’s industry.
Eben Mabunda is a financial analyst and business anchor at ZTN PRIME #DSTV294. Twitter: @EbenMabunda
