Saturday, 29 September 2012

Zimbabwe: Will Govt Deliver On Agricultural Plan?

LAST week cabinet added yet another measure to its growing list of high-sounding policies gathering dust in its offices by approving a new agriculture plan aimed at providing much-needed cheap lines of credit for farmers and ensuring suppliers distribute inputs countrywide well ahead of the farming season.

Farmers are currently being charged steep interest rates ranging from 11 to 28% per annum, which the policy seeks to tackle through the provision of cheap credit. Zimbabwe's new black farmers, who took over formerly white-owned land courtesy of the controversial and often-violent land reform programme beginning in 2000, perennially complain about unsustainable production costs caused mainly by high costs of fertilisers, chemicals, labour, water and fuel.

Finance minister Tendai Biti said under the new policy farmers would buy inputs directly from suppliers instead of waiting for government to buy on their behalf as this disturbed their plans due to late delivery of supplies. He said he is negotiating with donors to ensure vulnerable farming communities get necessary assistance to ensure improved production and food security.

Biti's assurances came against the backdrop of widespread complaints from farmers' unions over delays in payment for produce delivered to the state-run Grain Marketing Board.

But farmers -- in the past promised assistance only for government to fail to deliver leaving them hopelessly stranded -- will at best welcome the policy with guarded optimism. Government has a long record of policy formulation only matched by its inaction when it comes to implementation.

The three-year old coalition government has not fared any better, drafting and launching several ambitious policy frameworks which have been hardly implemented.

The Industrial Development Policy, Short-Term Emergency Recovery Programme and the Medium-Term Economic Development Plan are among the major policies drafted and adopted by the unity government, over and above numerous other policy blueprints crafted by the previous Zanu PF regime.

This has created the belief that some of the policies are only produced to give the false impression government is doing something to address multifaceted socio-economic problems facing the nation.

Critics thus say it is highly unlikely government would deliver on its agricultural promise and it would be folly for farmers to base their preparations on government promises. This is despite the fact that agriculture contributes between 15-18% to the Gross Domestic Product as well as 40% of national export earnings and 60% of raw materials to the agro-industry.

More than 70% of the country's population relies on agriculture for survival, but lack of a comprehensive enabling policy has adversely affected general productivity, resulting in the country importing grains it used to be self-sufficient in prior to the disastrous land reform programme. Zimbabwe Farmers' Union spokesman Tinashe Kairiza said while the new policy framework was progressive, farmers were anxiously waiting for government to implement the measures to boost productivity.

"Government is facing a serious liquidity crisis, so provision of cheap lines of credit and subsidised inputs is highly unlikely although it would boost agricultural output," he said.

Economist John Robertson said farmers' demands would not be addressed by the new policy because government was well known for failing to deliver on its promises. He also said government had repeatedly promised to pay farmers on time but has consistently failed to do so.

Robertson further pointed out government was cash-strapped and it would be almost impossible for it to fund farming from its resources, unless it relied on borrowed money despite its onerous debt. Zimbabwe's total debt is about US$10,7 billion.

However, Zimbabwe appears set to secure US$100 million in budgetary support from neighbouring South Africa, part of which would be used to finance agriculture and boost productivity. South Africa has previously helped Zimbabwe with funds for inputs.

"The new government scheme to assist farmers is difficult to implement because government owes a lot of money to seed producers and fertiliser manufacturers," said Robertson. "Government has promised farmers money before but they failed to access the funds. The fact is government simply doesn't have the money. Even if it borrows from South Africa, the money has to be paid back and that will depend on how local farmers service the loans."

Robertson said only a handful of farmers with collateral were likely to secure lines of credit. Most new farmers do not have title deeds for collateral against bank loans.

Since most of the new farmers got farms through political connections and by virtue of being war veterans, they did not have title deeds and hence could not borrow money from banks, he said.

However, economic analyst Eric Bloch said although government's coffers are empty, it could divert funds from other sectors to boost agriculture since the majority of Zimbabweans rely on farming. He said the new agriculture policy was likely to be implemented fast given forthcoming elections next year.

"Politicians are aware agriculture is an important sector of the economy hence they will seek mileage by approving and implementing relevant policies," said Bloch.

While farming preparations have often been scuttled by an acute shortage of farming inputs resulting in poor harvests, Biti said the new policy would resuscitate the virtually dead agricultural sector -- the economic mainstay -- and restore Zimbabwe's breadbasket status in the region.

Biti said the new policy is meant to help farmers end the unproductive dependence syndrome, while security of tenure on land would assist them to borrow.

AgriExpert economist and consultant Peter Gambara wrote in the Zimbabwe Independent recently that government should invest in input schemes targeted at the small-scale farmers and provide more resources to extension agents.

Agriculture financing has always favoured large-scale commercial farmers who can use title deeds to access funding from banks, while communal farmers with user rights struggle to get funding.

Erratic power supplies and high tariffs have also contributed to poor production, with farmers calling for subsidised electricity supplies. Farmers say government should revert to the preferential rate of 55% of the electricity tariffs in place before 2009.

While farmers and stakeholders are justifiably sceptical government's new policy will be fully implemented, politicians are likely to pull out all stops to deliver, given the looming crucial elections.
Original Article Here

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