Analysis: Wandile Sihlobo
Droughts or floods always have a devastating impact on agriculture. But the second-round effects on livelihoods are manageable in countries that are economically stable, depending of course on the magnitude of the impact.
However, for countries, with economic instability and low capability of mitigation, there is usually a disaster months after the extreme weather events.
The latter is precisely what we are witnessing in Zimbabwe at the moment.
For context; Zimbabwe’s maize prospects — their staple crop — are not in good shape because of a drought which delayed plantings at the start of the 2018/19 production season.
And when it finally rained, it became rather excessive, as was witnessed during Cyclone Idai at the start of the year.
The maize harvest is currently estimated at 800 000 tonnes, down by 53 percent from the previous year, according to data from the US Department of Agriculture.
The hardships emanating from this poor harvest, exacerbated by unstable economic conditions are being felt across the country.
The World Food Programme now estimates that more than one-third of Zimbabwe’s rural population (or some 3,6 million people) will be food insecure by October 2019.
And by January 2020, the figure is set to increase sharply to 5,5 million.
Had Zimbabwe been an economically stable country (with efficient markets, policy and infrastructure), the effects of lower agricultural output would have been buffered by imports, and government assistance to a certain extent.
But this is not the case in Zimbabwe.
The economy, political environment and state resources remain fragile.
The maize markets cannot function efficiently, as the
State’s hand is deep in the maize bag.
Just last month, the Zimbabwean government designated the State-owned Grain Marketing Board as a sole buyer of maize from local farmers.
Those who attempt to sell their produce outside this arrangement could face a penalty.
Now, while the Government might have introduced this measure as a way of ensuring consumers’ well-being after food price inflation galloped to 126,43 percent in May 2019, it is unlikely to work.
Farmers are withholding their produce, instead of delivering it to the Grain Marketing Board.
This leads to the scarcity of maize in the market, and will inevitably not address the Government’s concerns of consumer well-being (affordable food).
Regardless of where Zimbabwe’s domestic maize policy ends, the country still needs to import about a million tonnes of maize in order to fulfil its annual needs.
It is not clear if this import activity has started yet, as the local authorities have not published any data.
Also, observing from South Africa’s export data, which would be one of the key countries Zimbabwe could source supplies from, Zimbabwe has, thus far, not imported any maize from South Africa within the 2019/20 marketing year which started in May 2019.
Now that the Grain Marketing Board has been designated as a sole buyer of maize from local farmers.
It is unclear if this policy will influence private businesses’ maize import activity.
One organisation that might sure make maize purchases on behalf of Zimbabweans in the near term is the World Food Programme.
The organisation has recently indicated that it will boost its humanitarian aid to Zimbabwe through to April 2020.
South Africa, Zambia and Mexico could be the potential suppliers of white maize to Zimbabwe.
Aside from white maize, there are a number of countries that can potentially supply yellow maize to Zimbabwe, with the most likely ones being Brazil, Argentina, Ukraine and the United States.
These are all initiatives that are yet to materialise. As things stand, there is looming food insecurity in Zimbabwe.
Wandile Sihlobo is Chief Economist of the Agricultural Business Chamber of South Africa (Agbiz). Sihlobo is a Commissioner at the International Trade Administration Commission of South Africa (ITAC).