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Moving forward in Zimbabwe Reducing poverty and promoting growth of agricultural inputs for at least the next three seasons. Smallholders in communal areas will need to be supported over at least three seasons on ‘full packages’, followed by a managed reduction of support over a further two years. We propose that the focus be on the smallholder farmers in regions 1 to 4. This would reach close to 71 per cent of the target group. Agricultural support will not be all that is required – for many households a social protection scheme will need to be set-up to restart production. We do not think the assistance package should be means tested as the mechanisms for doing so may lack credibility and could be abused in the current political climate. Available evidence also suggests that public works or cash for work would not function well in the current context. Apart from the fact that there is limited state capacity to monitor extensive workfare relief programmes, we also know that up to 60 per cent of the expenditure of such schemes is usually consumed by overhead costs. Perhaps, after a few years of free agricultural inputs, workfare relief programmes may be more feasible. In the medium to long term, agricultural recovery will depend on how some of the key outstanding issues affecting investment in agriculture are resolved. Below we highlight some of these. 11.2 Land reform: moving forward Land reform was at the heart of the crisis, and the expectation is that the transition process will iron out some of the problems that have prevented the beneficiaries of land redistribution from growing their way out of poverty. As noted previously, the country now has an agricultural system comprising a large smallholder farming sector occupying about two thirds of all agricultural land. We see the main priorities following land redistribution as follows. The unfinished business: tenure reform There does not seem to be any logical justification for a continued dual tenure regime in Zimbabwe. This creates two classes of citizens. On the one hand are over 800,000 smallholders occupying some 14 million hectares of land under communal tenure, while on the other are nearly 320,000 resettled households occupying land on conditions that are much more favourable than their communal land peers. The inclusive government should revisit this and look at the innovative ways in which other countries in the region, especially Mozambique and South Africa, have dealt with similar problems. Re-planning A1 units Most of the nearly 141,000 beneficiaries resettled on A1 units lack basic social services and infrastructure, since most of the largescale commercial farming areas did not have social infrastructure on the grounds that they were privately owned. This affects the ability of A1 unit households to utilise the land they have received. It is important that these are re-planned along the lines of the old ‘accelerated’ resettlement programme of the 1980s. This would involve planning them as new settlement projects, with full costing for social and physical infrastructure. Doing so, however, will not be cheap. We know from the experiences of the 1980s that it can cost up to US$12,000 per farm to provide the basic physical and social infrastructure, training and initial input support needed for a typical agricultural settlement. To support the 141,000 A1 beneficiaries would require an investment close to US$1.69 billion. Re-planning the A1 areas as a series of individual projects would have the advantage of allowing donors to support this programme in ‘bite-sized’ pieces. Similarly, donors could choose which projects they wish to support. However, it will still be the responsibility of the state to provide the overall connecting infrastructure. This multi-speed approach has the downside that certain regions might be more popular than others, which could potentially create political problems. As much as possible the re-planning needs to recognise the symbiotic relationship between these new units and the adjacent communal lands. It is therefore important that planning be integrated and coordinated with existing physical and social infrastructure in the communal lands. Given that A2 beneficiaries have more land and better terms and conditions of access, the state needs to explore private sector partnerships to provide commercial loans to this group, perhaps at subsidised rates. Like the former large-scale farmers it should be their responsibility to develop local physical infrastructure, although the state can help organise provisioning of social infrastructure. Revitalising agricultural institutions The crisis took a heavy toll on agricultural institutions. Most of the extension and research activity has all but collapsed. Consequently, there is a need for an institutional audit to reconsider the roles of existing institutions and suggest new institutional arrangements to support the new structure of agriculture in the country. This is particularly true if the newly settled A1 smallholders are to get the support they need. Since the country now has many more small, medium and large-scale commercial farmers than before, there is a need to identify the exact training and other support they require in order to establish how these can be provided. A2 land audit The international political agreement that formed the basis for the inclusive government foreclosed any discussions about reversing the land redistribution exercise. This means that the inclusive government can only refine and iron out emerging problems from the exercise. We know from the Utete and Buka Reports that there are still major issues related to farm ownership under A2 schemes. In addition, the actual uptake of A2 farms needs to be established. It is imperative that an independent audit of what is happening on these farms be undertaken with a view to reallocating underutilised land, perhaps to those with farming expertise who wish to return to farming and are looking for land under the new terms and conditions. This needs to be seen as a technical exercise and should be led by a credible state agency. Land registry The resettlement process created new farm units that need to be mapped and registered. The land information management system must be revamped so that it can cope with the increased land units that will need to be registered. Given the number of farm units that will need to be registered, it may be necessary to decentralise this function to districts. Since district land committees hold the most accurate information, a Land Information Management Unit could be set up to run from these institutions and possibly even at ward level. To improve the user interface, the registration process will need to be as accessible, cheap and simple as possible. This might mean creating and training a new cadre of paralegals operating at district or ward levels, as a full legal approach to this problem will be financially infeasible. If donor agencies are interested in 120
Moving forward in Zimbabwe Reducing poverty and promoting growth supporting the reform and strengthening of the land registry they should ensure that there is a lead donor. A series of different donor support packages could create problems. Enhancing land use through taxation One way of ensuring that beneficiaries use their newly acquired land is to ensure that after an initial grace period the owners have to pay land tax. While realising that this is a controversial proposal, we believe it should apply specifically to beneficiaries under the A2 scheme. Zimbabwe cannot afford to have good land set aside. As such, a key advantage of a tax is that it encourages beneficiaries to utilise land, especially if the taxes are based on expected output. However, any scheme would have to be designed so as not to cripple struggling nascent black commercial farmers. Compensation fund for former land owners Although the former white commercial farmers cannot be compensated for land under the terms of Constitutional Amendment 16 of 2000, it may be possible for the inclusive government or its successor to consider a pool of funds, probably provided by or matched by donors, to compensate the farmers. Available data suggests that less than five per cent of the nearly 5,600 former commercial farm owners have received compensation. Sooner rather than later this will need to be resolved. This is a controversial idea and donors might be unwilling to pay compensation rather than support poor smallholder farmers. However, we know from the cases of Japan, Taiwan and South Korea that it was the investment in other areas of the economy of compensation payments to dispossessed landowners that helped these economies to grow after the Second World War. Clearly things are different in Zimbabwe, but under certain conditions linked to the prevention of capital flight (for example payments through tax relief or bonds), such compensation could kick-start investment in selected areas of the economy and perhaps help with economic recovery. There is no denying that the former commercial farmers still remain a highly skilled group with extensive experience and knowledge of agriculture. Without land, if given resources some may wish to venture into agribusiness – agricultural processing, market intermediation, supply of inputs and services etc – that may boost agricultural exports and create much needed off-farm but agriculture-related jobs. The inclusive government may wish to explore this avenue as a way of bringing closure to an issue that will otherwise rumble on in the courts of law for many years to come. Enhancing agricultural incomes through high value crops and links to markets After the initial gains from a basic agricultural package have been achieved, smallholders need to improve their earnings through innovation. This can be done not only through productivity growth but also by ensuring that some of the lucrative markets that have only been accessible to large-scale farmers in the past are made available to smallholder farmers. We are thinking here about links to some of the global supermarket chains, either directly or through outgrower schemes. Smallholders need support to begin to diversify into high-value crops linked to these global production chains. Both state and non-state sectors (especially private companies with corporate social responsibility programmes) will need to be involved in identifying these markets and linking smallholders with them. By the time of the land invasions in 2000, some of the large-scale farms had already started some successful out-grower schemes that were working quite well. Re-activating such initiatives will create the income growth necessary for the economy to move beyond recovery. Reviving large-scale commercial agriculture While small farmers must be the priority, large-scale commercial agriculture will also need to be revived. This occupies about a third of all agricultural land, primarily in the better rainfall area, so productivity levels must be restored. Apart from the demonstration effect this has on smallholder agriculture, the scale factor implies that they can enhance agricultural productivity growth. A key constraint is that reviving large-scale commercial agriculture will need the private financial markets to begin lending again. For this to happen, the uncertainties surrounding ownership and tenure will need to be resolved. As long as these issues remain unresolved, agricultural financing will continue to be difficult and the farmers will have to rely on the cash-constrained state for support. The commercial farm sector only indirectly impacts on poverty, via employment and other upstream and downstream effects. The implication, therefore, is that this sector should rely as much as possible on state-assisted financial markets to enhance their productivity. The inclusive government therefore needs to find ways of recapitalising the major agricultural lending institutions so that they can begin to support the commercial farmers. 11.3 Water reforms and agriculture Water is one of the major limiting factors (and often the major factor) for productivity in agriculture in Zimbabwe. Reforms undertaken in the late 1990s substantially altered the terms and conditions under which water for agriculture is accessed. While commercial farmers still get the bulk of the water, there is a need to ensure equity in provisioning of water to the smallholder farming sector, especially if they are expected to play a more significant role in the revival of agriculture – as proposed in this report. The next stage in the agrarian reforms should look at how agricultural water is distributed and the inequality of access among land users, particularly given that some of the A1 farms are located in prime agricultural areas and could benefit from improved access rights to water. It is only when combined with access to water that the productivity of land can be enhanced, increasing earnings, alleviating poverty and contributing to economic growth. 11.4 Moving forward on the environment: an environmental audit The collapse of the economy drove most Zimbabweans to rely more on nature and natural goods than ever before – timber, firewood, bush meat, wild vegetables, traditional medicines etc. We know globally that poverty can drive people to ‘mine’ natural resources. The decline in the functioning of state institutions has permitted this, but even more it has allowed elites and other private interests to take advantage of lax enforcement and over-exploit natural products for individual gain. Environmental management efforts have weakened in several ways. First, we know that staff attrition made environmental regulation ineffective due to a collapse in enforcement capacity (forest encroachment and gold panning are two clear examples). At present, central government policy on the environment has little 121
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