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Moving forward in Zimbabwe Reducing poverty and promoting growth About 70 per cent of Zimbabweans still derive a living off the land either directly as smallholder farmers or indirectly as employees on farms. We also know that about 77 per cent of Zimbabwe’s poor and almost 90 per cent of its extremely poor people are found in rural areas. In fact some 2 million of the more than 2.1 million people in need of food aid are based in rural areas. A majority of these derive a livelihood from the smallholder farms in communal lands, while a good number, consisting mostly of displaced former commercial farm workers, are in limbo. This implies that any post-crisis recovery strategy will need to have this important constituency at its core. The challenge is therefore to come up with a growth strategy that can transform the welfare conditions of a mainly rural constituency while contending with a vociferous but also increasingly impoverished urban population. It is clear that income growth is central to any future strategy targeting poverty. For the rural smallholder farmers, income growth will have to come from a resumption of farm operations and a revitalisation of commercial agriculture, while for the urban constituents it will have to be employment growth. A look at the economic history of the country suggests that these two have always been linked (see Figure 1.4 above). When agriculture does well, the economy has grown and employment growth has been observed as manufacturing also tends to do well (up to 60 per cent of raw materials for manufacturing industry in Zimbabwe are derived from agriculture). We also know that historically when rural incomes rise, effective domestic demand for manufactured goods and services also rises, which can provide a market for increased output. It is clear than an agriculture-led strategy could be the most direct way to address poverty via raising rural incomes and could ultimately indirectly enhance employment growth. Focusing on rural areas especially, agriculture-led growth is pro-poor in that it implies that a majority of the population do not have to wait for the benefits of growth to trickle down to them via urban employment. The IG therefore needs to prioritise agricultural recovery as a major part of overall poverty reduction efforts. Below we suggest some key components of this strategy and what we think the entry points should be. 3.6 Agriculture in post-crisis Zimbabwe: some ideas for post-conflict reconstruction The main story for post-crisis agriculture in Zimbabwe will have to be about smallholder farmers. They are the new main agricultural sector both in terms of numbers and also in terms of the amount of land they hold. We are not suggesting a zero-sum game here with large-scale commercial farming, but we recognise that it is this sector that would have to function well if the economy is to recover. Agricultural policy will now need to be reoriented toward the smallholder producer. We identify three priority areas for reconstructing agriculture. Some quick wins: focus on smallholder farmers in communal areas, ‘original’ resettlement areas and irrigation settlements The initial focus should be on trying to get some quick wins in restoring agricultural production. We saw in Chapter 1 that along with adverse weather events, the decline in agricultural production can be explained not only by the disruptions to large-scale commercial farming but by smallholders simply being ‘too poor to farm’. Clearly, therefore, a social protection scheme will need to be set up to get them producing again. We suggest here that the initial focus should be on smallholder farmers in communal lands, especially in the better rainfall areas. This is for three reasons: 1. This is where a majority of Zimbabweans still reside and where most of the poor are to be found. There are still over 700,000 families and nearly half of them reside in region 1-3 where agro-ecological potential is high enough to engage in arable agriculture. They have proved in the past that they can be productive. 2. Although much of the infrastructure is in decline, the communal and some of the old resettlement areas still have the basic agricultural infrastructure and services that could be revived in reasonable time at a reasonable cost. This means the production environment can allow for some quick gains to be had. Agricultural infrastructure in fast track smallholder settlements (A1) is yet to be developed. 3. Land here is not contested. Some of the land acquired under fast-track is still being contested and it is also clear that donors will not be willing to directly support production on such land until the main issues are settled. This means communal and ‘old’ resettlement smallholder farmers can attract the substantial resources needed for such a programme without raising any moral or ethical concerns. Historically we know that smallholder agriculture has rebounded quite quickly from adverse political and climatic events if well supported. Smallholder farmers in communal areas will need to be well supported over several seasons – at least three seasons on a full package followed by graded reduction of support over two years. Taking a cue from Malawi and from past experiences in Zimbabwe, we know that providing a basic package of key inputs (draught power, seed, fertiliser and a grant for local labour hire) is required to kick-start communal lands agriculture at scale. We do not think the assistance package should be means tested as the mechanisms for doing so may lack credibility and can potentially be abused in the current political climate. We suggest that the focus be on the smallholder farmers in regions 1-4. This would reach close to 71 per cent of the target group. If the weather conditions are favourable smallholder farmers can lead agricultural recovery, not only through producing food crops and reducing the import bill, but also through the disposal of surplus production via markets. Enhancing agricultural incomes through high value crops and links to markets Poverty among smallholder farmers is a function of low incomes. In order to claw their way out of poverty through agriculture, households’ earnings have to improve. This can be done not only through productivity growth but also by ensuring that some of the more exclusive but lucrative markets work for the smallholder farmers. They will need to diversify into high value crops linked to global production chains. It is in identifying these markets and linking the smallholders with them that the state and other nonstate sectors will need to be involved. We are thinking here about links to some of the global supermarket chains either directly or through out-grower schemes. 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. It is such initiatives that will create the income growth necessary for the economy to recover. 42
Moving forward in Zimbabwe Reducing poverty and promoting growth Farm Class Table 3.3: Land distribution and holdings size patterns, 1980-2004. 1980 1996 2004 Number of farms Hectares (million) Number of farms Hectares (million) Number of farms Hectares (million) Smallholder 700,000 14.4 1,000,000 16.4 1,312,866 24.34 Small to Medium Scale Commercial Large scale Commercial 8,000 1.4 8,000 1.4 21,000 2.83 6,000 15.5 4,500 7.7 4,317 3.00 Corporate Estates 960 2.04 960 2.04 Source: Moyo, 2006. Reviving large-scale commercial agriculture Disruptions in commercial agriculture will not be easy to deal with, due in part to some outstanding issues on tenure reform and compensation of previous owners. However, because large-scale commercial farming occupies about a third of all agricultural land, primarily in the better rainfall areas, it is imperative that productivity levels be restored. Apart from the demonstration effect this has on smallholder agriculture, the scale factor implies that they can enhance agricultural productivity growth. 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 are not resolved, agricultural financing will continue to be difficult and the farmers will continue to rely on the cash constrained state for support. The following section therefore examines the vexed issues of tenure and land reform in more detail. 3.7 Land reform In Chapter 1 of this report it was shown that a majority of poor Zimbabweans still reside in rural areas where they rely mostly on farm-based income. Any prospects for sustainable poverty reduction at scale will have to depend on what happens with respect to agricultural and non-farm incomes in the short to medium term. A key determinant of whether a household is able to make a living and stay out of poverty in rural Zimbabwe is access to adequate stocks of assets, built around access to and ownership of land. Access to land and the conditions and terms under which it is accessed will influence the ability of households to produce food crops and other commercial crops for their own consumption and marketing. Two key issues generally dominate any discussion on land and poverty in Zimbabwe. These are land redistribution and tenure reforms. In this section we look at these two and consider the effects of the crisis on land use and emerging tenure arrangements. Until the Fast Track Land Reform programme of 2000-2003, land was divided unequally between races. This was a legacy of colonial occupation and the subsequent land alienation attendant to settler colonialism. We saw in Chapter 1 how areas of better farming potential were carved out for use by mainly settler white commercial farmer. This racial space segregation meant that a majority of black Zimbabweans eked out a living on overcrowded communal lands with poor agricultural potential. In a way, most of the poverty in communal lands may have been created, and can be explained, by the marginality of the land from which they were supposed to make a living. Overcrowding and marginality combined to produce low incomes from agriculture and significant underemployment. Arrighi and Saul (1969) have argued that the communal lands were effectively a reserve army of labour created to service the urban industrial economy and the large-scale commercial farming areas and mining. To the extent that there was continuity after independence in 1980, we can also say, as Mhone (2000) has observed, that this strategic segmentation and enclavity in part explains the perpetuation of poverty in rural Zimbabwe to date. Table 3.3 shows the distribution of land at independence in 1980 and after the fast track land reform. It is clear that the land reform process has transformed the structure of land use considerably with smallholder farmers now occupying the bulk of agricultural land. Small- to medium-scale farms and large-scale commercial farms now occupy just a third of agricultural land. Land redistribution is often seen as a powerful tool in the fight against poverty in areas where a majority of people are rural based and make a living mostly, though not entirely, on land (Jayne et al, 2003; el Ghonemy, 2002; de Javnry et al, 2001). Where ownership and access to land is unequal, redistribution is often seen as a way of helping land-constrained households out of chronic poverty through a significant ‘one off ’ infusion of assets into the household (IFAD, 2001). We know from evidence elsewhere that countries with better distribution of assets like land tend to record significantly better rates of growth than those with skewed patterns (Birdsall and Londono, 1997; Deininger and Olinto, 1999; Mo, 2003). Deininger and Squire’s (1998) work suggests that initial asset inequality hurts the poor through credit-rationing and limited investment ability. A more equal distribution of land has multiplier effects that have been observed to enhance income growth. There is therefore a general view in the literature supporting the idea that low levels of income and asset inequality are beneficial for poverty reduction. Work by Gugerty and Timmer (1999) looking at 69 countries supported the view that equity in the distribution of both agricultural and non-agricultural assets can form the basis for poverty-reducing productivity growth. Better distribution of land in China is often used to explain why human development indicators in China fare better compared to India (Burgess, 1999). To the extent that it was done well, we can see that there were both economic and political justifications for a fairer distribution of land. In the next sections we look at attempts to redistribute land since 1980 and some of the emerging outcomes with respect to poverty reduction. 43
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