Managing Govt agric financing

24 Jan, 2020 - 00:01 0 Views
Managing Govt agric financing

eBusiness Weekly

Hebert Zharare

The land reform in Zimbabwe started sometime back in the early 1980s, but what is more intriguing is the “fast track” that took place in turn of the millennium — when the programme reached its zenith.

Many phrases were coined in support of the land reform programme and among them were; “Land reform is irreversible, “Land — Our birthright” and “Land is the economy and the economy is land” among others.

The late former President Robert Mugabe put icing on the cake saying “even snakes, birds, frogs etc. that live on land belong to Zimbabweans.”

However, the number of indigenous Zimbabwean families that benefited from the land reform in the country still remain a subject for debate given that one family might, due to some circumstances in its favour, be in possession of more than one farm.

Whether all the farms belonging to those privileged families are productive or not is a subject for another day — but be rest assured some white former farmers are engaged to keep the places busy — and indeed Government has given a nod to that practice.

In his academic research paper published in 2011, the late Professor Sam Moyo, postulated that between 1980 and 2009, over 13 of the 15 million hectares of arable land, which in 1980 was controlled mostly by 6 000 white farmers, had been transferred to over 240 000 families of largely rural origin.

Some statistics from Government departments including the Flora Buka findings into land reform, suggest that up to 400 000 indigenous Zimbabwean families are now proud owners of rich and arable land that previously belonged to the white former farmers.

The land is the economy

and economy is land?

Farming is huge business in other jurisdictions because of huge capital investment sunk annually and several sectors that directly and indirectly benefit from various value chains through forward and backward linkages.

According to a report titled “Inside Development —The Rise of China Aid”, the Asian giant’s foreign agriculture investments in the developing world in 2018 totalled US$26 billion. In 2016, the Agricultural Development Bank of China, one of the country’s main policy lenders, agreed to loan at least US$450 billion by 2020 for the modernisation of China’s agriculture industry.

Farmers in the US got more than US$22 billion in government payments in 2019, the highest level of farm subsidies in 14 years and this form of funding signifies how critical Governments the world over take seriously the issue of food security and how agriculture stabilises economies and spur growth.

In Zimbabwe, although billions of public funds have been invested into the agriculture sector, it is critical to interrogate why it is failing to break the 2 million tonnes mark for cereals, while in the tobacco sector, the figures continue to hover around 2 million kilogramme point.

Although statistics might not be readily available, there are hundreds of companies, some of them publicly listed that directly and indirectly depend on agriculture and if there is a drought, these companies post losses and decrease in volumes.

A drought also means many Zimbabweans, especially those in rural areas and farming communities’ buying power suddenly drops and this affects some companies. If this sector affects the economy that much, why is it that Government remains the major financier and there appears to be lack of enthusiasm by private sector actors to bank roll agriculture. Does it therefore mean to the private sector “Land is not the economy and economy is not land?”

Are Government

agriculture funding

schemes missing the point?

If the land is the economy and if that land fails to drive the economy, then it means there are many things that are amiss. As a country, let us slowly start moving toward redefining some of the concepts anchoring our land reform.

Indeed, the land reform is irreversible, but we should start arguing along the legislation governing agricultural land ownership. Under the current laws obtaining, all farm land belongs to the Government and beneficiaries of the land can only lose it if the State so wishes.

After two decades into the land reform programme and the country continuing to import food, drought or no drought, it’s now time to start debating on reforming our laws to allow the transferability of land acquired under land reform.

The fact that land remains state property should not stop its movement from non-productive farmers to productive fellow indigenous farmers. It’s time that the laws are amended to allow non-productive farmers to lose the land. Our people should know that farm land has no value unless one works on it.

After two decades there are millions of youths that are now economically active and can do wonders in transforming our agriculture if given the opportunity. That is the reason why this finite resource should not stick into the hands of unproductive farmers, but should be allowed to rotate into the hands of capable and productive Zimbabweans.

We do not want the land to continue to be a dead asset, contributing insignificantly to the Growth Domestic Product.

Need to review

agriculture funding schemes

Events unfolding in the country’s agriculture funding, leave us with the conclusion that the schemes may be targeted at wrong farmers. For starters, under the Command Agriculture Funding Model where Government has been buying inputs and distributing them to the farmers who are supposed to pay back after selling their crops, why is it the same people year in year out receive the materials?

There are some politicians and businesspeople who are first on the distribution lists yearly and if the inputs do not come, these people do not farm. Similarly, there are some farmers who have given up applying for Command Agriculture inputs because of the bureaucracy and corruption that has been associated with the scheme.

National leadership, at times, is not appraised of these challenges because officers on the ground usually conceal the evidence and complicity.

Some well-resourced farmers who can dispatch their fleet of tractors to till land for the agriculture extension officers, get all the fertilisers applied for on time, while poor ones at times get last deliveries, way past planting deadlines.

Unconfirmed reports this year say the biggest Command Agriculture beneficiary in Mashonaland West received inputs for 7 000 hectares, followed by 500 and then 400 hectares and the question is where are other farmers.

The introduction of the Smart Command Agriculture by Finance and Economic Development Minister Mthuli Ncube, where farmers get the money for their inputs requirements from lending banks, we hope will naturally help screen farmers and allow befitting ones only to benefit.

We propose a system that weans off farmers and become self-financing after say five years, not the current system where the same farmers benefit from Government schemes as long as they are alive.

Sad developments Government might not be aware of

Farming is a process of learning experience and skills acquisition done over a lengthy period. This means one needs several years learning the art of properly growing all crops suitable for a particular agronomic region. It is against that backdrop that we want Government to know the following:

1) How can one person together with his/her family be farmers worth their salt if they rent out the farm to, mainly white former farmers under an arrangement where they receive at least 10 percent of the yield.

Government has sanctioned such practices and every year prominent land beneficiaries seek approval from the Ministry of Agriculture and Rural Resettlement to allow people to rent their farms. Under this arrangement what it means is the intended beneficiaries are not accruing experience, but they are just benefiting as landlords.

2) Is the Government aware that some of the inputs being delivered to farmers are being sold in US dollars by beneficiaries for as little as between US$8 and US$15 to those who fail to qualify for the scheme? After selling the inputs the “farmers” then start currency speculation, while other do cross border business and sell their wares for cash and buy US dollars and continue speculating. Come harvesting time they establish buying points and start collecting maize from other desperate farmers for a song. In the end, they deliver the maize to GMB and clear their loans.

3)There are so many people who do not have land but are enjoying the inputs for wrong reasons as they sell the inputs on the open market.

But our argument is that these people did not play their part of using the inputs to contribute toward national food security. Their land remains fallow or is rented to other people and this is morally wrong. The public funds are not being put to good use and there is a need for proper checks and balances before a person’s application is approved.V

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