Follow tobacco model for horticulture

08 Jul, 2022 - 00:07 0 Views
Follow tobacco model for horticulture

eBusiness Weekly

Horticulture used to be mainstay of Zimbabwe’s agricultural exports, allowing well-capitalised farmers, and they had to be well-capitalised, to earn a decent living selling vegetables and flowers, mostly in Europe and mostly in the colder six months of the northern hemisphere year.

We were earning US$143 million in exports in our best year, with the figure rising and the limiting factor was largely the capacity for air freighting the produce to Europe, mostly Amsterdam and London.
This figure has fallen to less than half that figure, so the industry still exists and still provides a decent income for some, but needs to be rebuilt.

The decline had several sources. Land reform was certainly one, but was not that critical as new farmers could have bought the equipment and stepped in. The amount of land needed for a large commercial horticulture farm was not large, roughly the size of an A2 farm.

More critically were the deteriorating air transport links, partly the result of some poor local policies, partly the result of fewer people wanting to visit Zimbabwe, so there was less two way traffic, and partly the result of not being to use old aircraft on many European routes.

The final problem was the very large amount of capital needed to invest in export-driven horticulture, the greenhouses, irrigation, cool rooms and the like required. Yet many farmers who only acquired land under land reform have now moved into irrigation, the most expensive investment, so this is not a disaster.

Besides all these structural problems there was also the problem of sanctions. Now these did not affect horticulture exports of course at the Government level, but a significant number of companies that used to buy Zimbabwean vegetables and flowers stopped doing so when their original supplier said they had lost their land. That is something that is now in the past, but it does mean that some markets need to be rebuilt.

The rebuilding will rely to an ever larger extent on mobilising small-scale farmers. This will require group investment and probably a company to come in with some of the major equipment to be used by the group.

This is not unknown. It is precisely how the tobacco industry very quickly rebuilt the industry in the switchover from less than 2000 plantation owners to more than 60 000 small-scale farmers, some growing just 0,5ha.

That switchover was led by the tobacco merchants, who needed their leaf, but ws solidly backed by the authorities with the creation of the Tobacco Industry Marketing Board, which despite its “marketing” name pretty well licences the whole industry from growers to merchants to processors to marketing.
Flipped right over as well was the seed supply. The research continued but most farmers now buy TIMB-approved seedlings, rather than set up their own seed beds.

The other huge change was the introduction of contract farming, with merchants rather than farmers capitalising the crop. That was so dramatic that it has seen 95 percent of the crop moving from self-financing and the tobacco auction floors to contract financing and contract deliveries.

The system works with the TIMB policing the process and ensuring no one cheats.

Rebuilding horticulture to serious levels is going to require something very similar. Larger-scale farmers can still create their own markets, as that irrigation company that started blueberry production with an investment of US$100 000 to sort out its own foreign currency sources shows, since it is exporting over 1000 tonnes a year.

But that sort of production level, big enough to enter an export market as a single producer, is not going to be the case for what will be the bulk of the farmers in a revitalised industry, and there will be need to work out the transport requirements for fresh quick spoiling produce.

TIMB works because while it is a statutory body set up to organise, licence and police the tobacco industry, it is also representative of that industry. So it belongs to the industry it regulates and that makes a huge difference and provides a model for how an independent regulator can still be inside rather than outside the industry.

One critical function of the TIMB, missing in other contract farming schemes, is to preven side-marketing, from both sides. It is able to stop farmers selling to self-appointed middlemen and is able to stop merchants poaching each others farmers. A farmer can still switch between contractors, but that has to be done between the end of one season and the start of the next, a bit like a football player switching clubs in fact.

Cotton contract farming crashed because of the side-marketing and poaching for example, and other crops could enter the same maze of greed.

The other major requirement is for investment, large-scale investment. This could be created in many ways, and probably needs to be created in many ways. Some farmers will be self-financing, fair enough.
Others will have to be organised into contract groups. Perhaps 100 small-scale farmers could share the cold rooms and the grading and packing sheds. In any case they would have to be on the same irrigation scheme, and that alone means they will be among the better and keener farmers in their area.

As with tobacco, there is no fundamental reason why the growing and marketing functions cannot be separated, so long as there is the “Horticulture Industry Marketing Board”, the HIMB in fact, to stop the marketing companies ripping off the growers and the growers side-marketing and ripping off the contractors and marketing companies.

The opportunities exist for a major expansion in horticulture led by irrigated small-scale farmers. Old irrigation schemes are being revamped, new ones are being established as the Government commissions a new dam every few months, and now we have this village borehole drilling scheme over the next five years.

Farmers are keen on growing higher value crops. We have seen examples of this recently with the Shashi irrigation scheme, revamped now, producing oranges.

Here the small-scale growers were each willing to allocate some of their small irrigation allotments to grow the trees even though it would take five years before these started bearing fruit, and in the meantime absorbing labour and money for things like fertiliser.

Now they want to upgrade quality and sell fruit on export markets as well as to their major customer, a juicing company. Both will be needed since export fruit has to look, as well as taste, perfect while juicing fruit just needs to be ripe, but not rotten, and disease free; it can be odd shapes without losing value although something sold on a European high street needs to look perfect.

The marketing companies will obviously have the information on what varieties of what crops will sell in which markets and growers will need to grow these. Quality as well as sustainable supply will need to be assured to ensure that the buyers outside Zimbabwe are not continually worrying whether the horticultural products will arrive on the due date.

So while the experts in the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development reckon, probably correctly, that exports can be pushed up rapidly in a few years to US$500 million a year, we need to set up the modalities and the business models in time to get this growth.

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