Rural growth can lead development

28 May, 2021 - 00:05 0 Views
Rural growth can lead development

eBusiness Weekly

Rural development in Zimbabwe needs to go far beyond the empowerment of small-scale farmers and their conversion to commercial producers of agricultural products for sale in home markets and for export, although that is a necessary condition for both rural development and for the acceleration of industrial development and mining.

At independence Zimbabwe had a scattering of small towns but all in the white farming area. They had grown to provide some basic services to the large commercial farmers, or had developed around major mines, but with improved communications to the major cities few expected any further growth as many went to shop in the larger centres and the farm workers never had much money.

The post-independence Government encouraged the establishment of growth points, largely in the communal lands or those early resettlement areas. Most have remained tiny and not really viable. The old description of a growth point being three bottle stores and a general dealer is unfortunately all too true although somewhat exaggerated. But the only real incomes in most of these areas were the local school teachers and Government agricultural workers, who were never overpaid but did provide some customers.

Some of these old towns, mainly the provincial capitals, many of which became university towns as well, did grow but at rates far below the growth of Harare, where most of the economic urban growth was centred. But you can still go off the main road into small towns, such as Banket or Odzi, and see pretty much what they looked like 40 years ago, right down to the peculiar division of the housing into two very separate groups as a result of the racial town planning.

A few of the newer business centres did grow into towns: Mupandawana-Gutu, Murehwa, Gokwe and Mount Darwin did grow, and a few other district centres have seen growth as the Government provided more services, assigned more staff. But they are a long way from becoming flourish towns.

The biggest single problem was the lack of money in the area. Far too many communal farmers and most of the A1 farmers were little more than subsistence farmers, eking out a living, and even the A2 areas had just patches of successful commercial farmers, with too much of the land not used or being kept as a a weekend retreat or an insurance policy against future unemployment or retirement.

A business centre cannot grow much in such circumstances.

Now, as a result of the decisions by the Second Republic to set up proper and viable contract farming through Command Agriculture and the Pfumvudza inputs scheme, backed by a better policed private tobacco and cotton contract farming, money is starting to flow sustainably into rural farming households.

Eliminating input cheating, and criminalising side-marketing, achieves three purposes. First the diversion of input money into the pockets of already well-heeled urban dwellers is stopped following the insistence that those getting inputs through contracts must be real farmers with the required skills, being resident on their farms and with actual farms.

Secondly those farmers are now producing, with a major effort being made to ensure that they can get advice and training, so the wealth being created is real, based on production rather than built on inflationary money supply creation.

And thirdly they get full value on delivery of their crops, rather than having to rely on far smaller payments through side-marketing by exploiters driving around in a truck and a briefcase of cash, a process that not only messes up contract farming but also ensures that the profits from farming end up in Harare in the pockets of those who buy through side-marketing and then sell at market prices.

That flow of cash into rural areas is already having an impact. The decentralisation of the tobacco marketing, a long-needed and long-delayed process that Covid-19 forced on the industry, is seeing money in the small towns across the tobacco-growing belt.

So now the markets are reacting and the private sector is mobilising. Good old-fashioned business economics is seeing the rapid growth of the private sector in these small towns as new businesses are established and new branches of established businesses are opening. The informal sector is also flourishing in these smaller towns, as instead of huge flea markets outside auction floors we now have people in the communities working out what to make and how to sell it.

This sort of growth is natural and expected. Much of Europe, for example, has quite small farms. But the majority of the rural population are not farmers although the entire rural economy is built around the production from the farms. But then you get the processing, the making of fancy cheeses, speciality foods like fancy sausages, and the like. Some of this is done on farm, but a fair amount is done in the local centre by others.

Then, because the farmers have money, there are the mechanics who can fix a tractor in one day, the vet on call, and even the lawyer who is needed to sort of land transfers and business issues. That sort of population of farmers and processors and service industry means that retail can work. Travelling through a European countryside you will find a lot of these small towns, and they are largely based on private sector businesses that were set up to fulfil local needs and requirements.

You even find the larger processors, companies that figure it makes more sense to be where the raw materials are, rather than ship them to some city. A fairly ultimate example is the French champagne industry. There are a handful of major global brands, and a far larger group of smaller producers. But they do not grow their own grapes, except some very small producers.

They buy the grapes from the farmers. Agreements have been struck, which basically means that the local farmers can only grow the three types of grape needed and in the proportions that are needed. But prices are agreed, contracts are signed and the whole district is involved in its major industry.

The other side of expanding rural production is the need to expand industry in Zimbabwe. Factories provide jobs and in the end a large majority of Zimbabweans are going to be urbanised workers. That in turn needs a flourishing rural economy that can grow the food and raw materials that the workers need to eat and the factories need to run.

That in turn requires intensive agriculture and high productive farms. These can be quite small and are quite small in many countries, but they do not have much in the way of wasted land. When the countries were industrialising you saw say one child in a family staying on the farm, but the rest moving into the towns, either the local town or the big city.

Again this was not something run by a Government, except for land reform in laws in many countries, but rather a natural process driven by economic growth. China, for example, is in the midst of this revolution driven by its sustained and dramatic economic growth over the last few decades, and the transition from a country with a majority of poor farmers to a country where much of the wealth is created in cities has caused the bulk of the social problems in China because it has been so fast.

But the Chinese rural areas are now far richer than they were, and are far more productive. We need to remember that China largely feeds itself, although food imports of a range of specialist products is rising, simply because the Chinese farmers are a lot better and have access to inputs, mechanisation and finance.

The Chinese example is worth study. China has been better than most countries undergoing rapid industrialisation in preventing ribbon growth and in keeping decent town planning as a priority. While older cities have expanded, and have seen satellite towns established, new towns and new cities have been encouraged. And even the satellites of say Shanghai are not so much dormitory towns but proper cities with the jobs and housing in one place.

This is what is needed in Zimbabwe, where the growth is more evenly distributed and we can avoid making the congestion and resulting mess that we see in Harare Metropolitan even worse.

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