eBusiness Weekly
Clifford Shambare
It has been estimated that as a result of the completion of the Tugwi-Mukosi Dam, 63000 more hectares can be put under irrigation. The current plan is to put 25 000 hectares under sugar cane. Sadly, an as yet unspecified, but relatively small proportion of this hectarage, will be under smallholder cane cultivation. So why are smallholder farmers always relegated to the bottom of things in this country — you may want to know?
At this juncture, let us tease the matter out here. Firstly, the capital comes from big capital. And since lending money to the bigger operator is deemed (by big capital) to be the less risky option, he is the one who is preferred by the former. So here the big guys attract and understand each other, and the small guy loses out.
Secondly, in developing (economy) circumstances, Zimbabwe being one — the government acts as the overall custodian of that economy; this is especially so where natural resources are concerned. Therefore, the latter makes all the pertinent decisions regarding same.
In the case of Zimbabwe the government funded the construction of the Tugwi-Mukosi Dam. Therefore, it makes sense that it be involved in the planning of the use of that dam’s water and the accompanying land and other infrastructure; and it is already doing so. This new approach — if we may call it that — is only following in the footsteps of the one used in the initial sugar project. But here circumstances have changed in that the target population has changed in profile.
During the colonial days it was the white population, ranging from the government to the big capitalist, right down to the poor white settler. At that time the interests of all these categories of sugar producing groups converged, therefore there was no chance of conflict. Now it is the former big capitalist and the government (which is run by the same race as the indigenes) who are involved. In the sugar industry the latter group is composed of mostly, poor peasants with a sprinkling of middle income blacks.
In the past, the two white categories fed into each other on the economic front without any hassles. Now the race element has entered the system, in the process complicating things.
Meanwhile, the government is steam-rolled by history and circumstances, into a situation where it has to follow old approaches which in this case, involve hiring consultants for such a task as the formulation of projects to exploit the public resources such as the Tugwi-Mukosi water. So what happens is that the consultant so hired, is from the same big capital.
Naturally, under such circumstances, the project plans he draws up are tilted towards the interests of the latter. So here lies the dilemma of the indigenous Zimbabwean — both the governor and the governed.
Under the current circumstances, it would be a pity if all the new opportunities for sugar production in the Chiredzi and surrounding districts, end up in the hands of the big boys with the small boys — that is, the indigenous cane growers, still playing second fiddle to the former. So, the challenge now becomes how to involve the latter. At the moment it does not appear that the government is standing firm for the interests of the poor guy — the small cane farmer; the same individual whom I am proposing should also become a small but fully fledged sugar miller.
At this point I want to suggest that some funding model for this individual to make him a full-fledged small cane grower/miller be formulated without delay. This is where the government is challenged to come in. One possible model is one where the big boys are made to contribute to a funding vehicle through some incentive scheme such as tax holidays for funding a machinery purchase scheme for a number of indigenous cane millers, who themselves, will be made to pay for it from the sale of the final product. The government should also raise funds for the same project through such organisations as NSSA, Agribank and The Command Agriculture Scheme.
That said, the major challenge in Zimbabwe today (where such issues are concerned) is lack of political will by the political leadership to deal with corruption, as well as lack of good governance by the business leadership. If these two maladies are not effectively dealt with, no matter how much expertise and good will are available from Zimbabweans as well as from outsiders — a project such as this one, or any other project for that matter — will not succeed!
But ultimately, for the sake of establishing a locally-based economy — one in which the indigene is a fully fledged capitalist, the latter has to (or be made to) feel that he needs to become empowered through such a scheme. If this is not done, this strategy will not work either. So more work still needs to be done here.
In order to achieve a state of sustainability under conditions where the indigenes are their own masters, they will need to be weaned from the big companies. This action will present its own set of challenges but nevertheless, some way of overcoming them will have to be found. Like in any such a situation, this disconnection can be either friendly or hostile to the established parties but the former approach will naturally be the better of the two since a level of cooperation is always desirable in such projects.
Once this alternative has been adopted, the amount and source of funds to set up the mills can then be determined. Some of this funding can be met with local currency while the other — that is machinery — will obviously need foreign currency.
At this stage we need to consider the cost of this component of the system. Currently in India, a small sugar milling plant costs between US$ 300 000 and 560 000. This size of plant can cater for a land size of 60 acres — that is around 24 hectares. Incidentally, the land size of the new settlers averages 25 hectares.
On the surface, this strategy seems possible to implement but one has to consider the challenges lurking on its sidelines. Production costs and uniformity of product quality will be obvious ones; then there is the need to refine the raw sugar — a process that needs its own capital. This is an operation that may not, and does not need to be done on site. In fact, the current sugar milling companies do not do it on site but in Harare.
So in this, case the new sugar producers may need to co-operate on this aspect one way or the other. But this cooperation may also begin right at the milling stage on the cane fields. In fact, given the high costs that this industry requires, this may be the way to go. Unfortunately indigenous Zimbabweans have so far, not exhibited an encouraging degree of positive attributes when it comes to cooperation in those projects that require that approach; this has been particularly so in the agricultural field.
As far as funding is concerned, because of the nature of such a project, the cane growers may still end up at the door of the banks — whatever form such banks may be! Under such circumstances, government can only facilitate their goals, strategies and activities through the funding of a part of the production chain.
Fortunately for them, as already been alluded to above, the availability of water for the purpose is now assured through the Tugwi-Mukosi dam. However, there is need to construct conveyance and inland water distribution systems. Unfortunately, this part of project needs capital which is not readily available and is required in foreign currency. And to make matters worse, time is not on the farmer’ side.
Under the current circumstances, the cane growers will definitely need government support. In order to appreciate this fact better, consider the efforts that the Indian government expends to ensure that its produce, of which sugar and cereals, the major one of which is wheat — are a part.
So in this case the idea is to empower the project owners with the tools to sustain as well as to grow it.
◆ Clifford Shambare is an agriculturist-cum-economist and is reachable on 077496093.
