Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Synergies for Growth – Cooperate. Collaborate. Complement.

Synergies for Growth – Cooperate. Collaborate. Complement.

ZIMBABWE AGRICULTURAL SOCIETY

By Dr A J Masuka, Chief Executive Officer, Zimbabwe Agricultural Society

Every year, since 2016, as part of a broader transformation strategy to rally consensus, and to bid and unite support for the wider cause of agriculture and to complement stakeholder efforts towards agriculture-led accelerated econom­ic development, the Zimbabwe Agricultural Society chooses an annual theme. Last year the theme was “Technology. Innovation. Modernisation: Adopt Accentuate. Accelerate”. For the year 2020, the theme is “Synergies for Growth: Cooperate. Col­laborate. Complement“.

The theme supports the resource-based strate­gy adopted for the country’s accelerated economic development towards Vision 2030. The strategy’s emphasis is on agriculture, mining and tourism. These are certainly our biggest natural endowments forming the pillars of this accelerated socio-eco­nomic developmental path. And manufacturing, in­frastructure and services are key supportive pillars, primary enablers and principal co-factors for this development.

2.0. Sustainable and Inclusive Economic De­velopment.

Over 70 percent of the population depends on agriculture for survival and sustenance. A deliberate and national focus should, therefore, be given to this important sector. The majority of the 70 percent 54 percent of them being women, live in poorly devel­oped rural areas, where only 64 percent have access to clean water and less than 30 percent have access to suitable sanitation facilities.

Our take is that Vision 2030 must prioritise the 1.6-1.8 million rural households, some 10 million people, to uplift their socio-economic status, in a holistic manner, addressing housing, water, sanitation, infrastructure, and social services, among others. Their only credible avenue out of poverty is increased agricultural productivity, yet there is a paucity of practically funded ideas about “what and low” to do this! The startling statistic that a mere 5 percent of rural households have surplus produc­tion to sell annually, must allow evidence – based policy making to take centre stage. With a focused, practical, inclusive and sustainable rural agricultural development paradigm shift, we see synergies for growth.

An estimated 60 percent of raw materials used in the manufacturing sector originate from agriculture, so a robust manufacturing sector, that is competi­tive in the local, regional and international markets, must, of necessity, be based on a vibrant, cost-effi­cient, profitable and sustainable agricultural sector. Yet the actors in this two sectors – agriculture and industry – both private and public, believe and act like they are in competition with little cooperation, collaboration and complementarity to yield the de­sired synergies for growth.

3.0.      The Agricultural Development Pentagon
We have previously proffered the Agricultural Development Pentagon, to illustrate the links and the actors for a “new agricultural dispensation” cog­nisant of, and in the context of, the realities brought about by the land reform programme. This is a clear and simple workable approach to increasing crop and livestock production and productivity devoid of impression amplifiers.

3.1.      Farmer-Centred

This Agricultural Development Pentagon il­lustrates the need to establish farmer-centred and working value chains for inclusive and sustainable development This would entail a new capacitation paradigm shift from extensionists to business advi­sors, translating and sharing the burden of farmers success in agriculture as a business to both the farm­er and the business advisor (AGRITEX), in com­munal and resettlement areas and with dedicated advisors for A2 farmers for production and financial plans. A policy shift would buttress and complement this thrust This shift entails a radical change in the whole education value delivery continuum – from tertiary institutions to agricultural colleges for stu­dents, to agricultural business schools for farmer knowledge translocation and sharing. A richer mo­saic of knowledge generation, translocation and sharing is required.

3.2.      Political Will

It starts with the right policies, and enabling regulations, for which political will must be strong. Avoiding policy-induced droughts through appro­priate agro-ecological region-defined input crop and livestock support schemes, removing the bur­densome regulatory issues, and streamlining and harmonising levies across the country, should be routine. We have seen some positive change, and some green shoots with the distribution of traditional grains across the country more recently.

The greatest changes have to occur in the policy and regulations domain to drive sustainable agricul­ture.

3.3. Elusive Financing Regime

The transition from Command Agriculture to Smart Agriculture allows farmers who have fully paid their loans to access inputs and seasonal finance from some banks, for the 2019/20 season. These seasonal loans have a government guarantee for ob­vious reasons. The effort is focussed on the 16 000 A2 fanners, and some eligible Al farmers, but ex­cludes the majority of farmers-the 145 000 A1 and 1.6 – 1.8 million rural households who continue to only receive seasonal input packs from government. They do not have a funding window, unlike in the past when they could borrow as a group from the Agricultural Finance Corporation.

The available seasonal funding excludes funding for equipment and infrastructure and other important capital developments for the farm. A more sustain­able and inclusive financing model should be found. A model that does not necessarily focus on the 16 000 A2 and large scale commercial farmers, but a model that can be sensitive to the requirements of over 145 000 Al farmers, and a model that is sym­pathetic to the 1.6 million rural households. A mod­el that allows for borrowing for capital projects, for irrigation development, for equipment purchase, for infrastructure construction and rehabilitation, and a model that is sensitive to the risk profile in agriculture. Perhaps a model that is not perfect. Perhaps a model that only optimises the value chain. A model that does not necessarily lead to maximisation, by value chain actors. Such a model requires a ded­icated Land Bank] for registration of all permits, leases and offer letters “as collateral”, ware-housing receipts, and providing seasonal and developmen­tal loans based on offer letters, backed initially by government guarantees. A path away from the melodrama of insouciant and mutating funding models towards a modicum of stability and predictability.

Should we not ease the burden of farmers and declare at policy level that these offer letters are as good as 99 year leases. One of the requirements of a 99 year lease is a five – year production record for which the majority of farmers do not haye as there has not been a funding model that has lasted five years, to capacitate all the farmers in the first instance.

3.4.      Ramping Production and Productivity

The case for tobacco is compelling. Following disruption during the land distribution era from 2000 to 2002, and in the absence of collateral by farmers, production has increased from a low of 48 million kg in 2003, to a peak of 265 million kg in 2019. Bor­rowing by tobacco merchants who support farmers with inputs, training and cash-flows, and guarantee purchase of the commodity is made viable by strong regulatory frameworks. This strong production has spawned opportunities for business along the value chain, from research and development, seed produc­tion, fertiliser, crop chemicals, consultancy services, to banking, irrigation, curing, cigarette-making and sales businesses. This phenomenal increase in tobacco production is undergirdled by a strong network of legislation and regulations imposed by government. We can replicate this model, albeit with modifications.

3.5.      Value Chains and New Business Ecosys­tems

An ecosystem of opportunities has been created in the tobacco industry, indeed spurring synergies for growth of the industry. While growers receive some USD700 million annually, the industry and support services, are clearly a USD 1 -1.5 billion-dollar industry. A visit to tobacco sales floors demonstrates the hive of activity and the SMEs that have been created to respond to farmers1 needs, yet even these visible entrepreneurial episodes are nascent and have yet to be harnessed for the growth potential they hold, if structured and formalised.

3.6. The Climate Change Story

Climate change ravages communities now more regularly than ever before in the history of our na­tion. Curiously, with 9 818 darns of various shapes and sizes and in different states of repair/disrepair in Zimbabwe, we seem not to have a master national irrigation strategy and plan which are a must for sus­tainable and inclusive agro-based rural socio-economic development.

We should shy away from statistical pitfalls of projecting lost potential but instead focus on a more realistic assessment of opportunities. Perhaps the biggest impact on agricultural production will be a combination of policy directing behaviour and re­warding outputs that “climate proof” agriculture. A new water philosophy should guide our thinking, our planning and, consequently, our actions.

3.7. A New Value Frontier

Despite exporting largely semi-processed to­bacco worth some USD1 billion, Zimbabwe does very little value addition of this product. Imagine the numbers, there is perhaps 10 times more value of tobacco, as cigarettes. So why can this not be a USD 10 billion industry by 2030 for which we could lay the foundation stone now? With cooperation, Collaboration and complementary efforts, we see a tapestry of synergies for growth in value addition .and beneficiation, marketing, transport, logistics, and service sectors, among others.

3.8. Learning and Opportunities

The history of agriculture in Zimbabwe, for convenience from 1924 when the Land Bank was established, is replete with examples of successful synergies for growth. This thrived on strong cooperation among actors depicted in the Agricultural Development Pentagon, a commitment to collaboration among actors, and strong complementary de­velopment and deployment of necessary supportive frameworks.

There are lessons to be learnt for the not so successful stories with other value chains, principally, wheat soya bean, maize, groundnuts, and horticulture. In commercial broiler and pig production, there are now local off-take arrangements that have emerged to fund and grow the production base. It is pleasing to note that we have begun to see some semblance of a value chain financing arrangement, akin to the one that led to a close relationship be­tween farmers and Cold Storage Commission in the 1980s’and 1990s, and that akin to the maize boom of the 1990s by communal and small scale farmers based on strong linkages among farmers, the Agri­cultural Finance Corporation and the Grain Market­ing Board. A combination of logic and good inten­tions should manifest in this critical space.

For export markets, strong value – chain financ­ing is emerging in the popular macadamia nuts. The sugar industry, too, has a very strong foundation for growing its value chain, albeit with a few trust-based challenges, among the actors.

4.0. Agriculture 4.0 Yields Industry 4.0,: “The New Normal”

Imagine a robust and credible financing system for agriculture leading to sustainable intensification of production and increased yields of quality, com­petitive agricultural produce and products, feeding into a modem industry system primed for compe­tition. A nexus with strong and rich ingredients of innovation, technology and modernisation. This synergy for growth must be highlighted continuously. But we require cooperation among actors. We require increased collaboration within and among value chains. We require consolidation of these ac­tivities to anchor growth, towards vibrant agricul­tural and manufacturing industries, giving further opportunities for growth in infrastructure, in energy, in services, and in increased local and international trade.

These are the “Synergies for Growth” away from adjunct and disjointed approaches with morbid fas­cination for growth, but lacking in the fundamentals. We should foster innovation, collaboration and val­ue creation with both purpose, and passion, by align­ing agriculture and manufacturing value chains, and then scaling them for accelerated growth.

5.0. Farming Crops, Trees, Game and Miner­als: “The Next Normal”

Devolution should be an opportunity for com­munities to assert themselves to start and grow their local comparative advantage resource-endowments and enterprises to “export” to other parts of the coun­try and beyond. A rural value chain and aggregator model for mobilising the 1.8 million households to produce road runner chickens and indigenous goats for “export”, bananas from Honde, Harurwa from Bikita, macimbi for Matabeleland South, pine ap­ples from Chipinge, game from conservancies and parks abutting various communities, are good exam­ples. We may think that some things are unchange­able and unchanging, or are these just feelings dis­guised as facts.

The exodus of young Zimbabweans from farm­ing communities, often in rural areas, lured by min­ing for gold, chrome and other metals is revealing. With coordination and formalisation, a dual agricul­tural and mining economy can be a source of their success and could spur accelerated rural develop­ment as proceeds are spend in local communities. These are synergies for growth for which coop­eration, collaboration and complementarities are required among actors in agriculture, in mining, in tourism – the resource sectors, primarily.

6.0. Conclusion

The Zimbabwe Agricultural Society’s mandate was redefined in 2017 to re-focus on promoting ag­riculture and its supporting activities and to facilitate agricultural development that ultimately impacts positively on rural livelihoods, especially for wom­en and youth.

The theme for 2020 seeks to highlight the need to harness and align national efforts towards sus­tainable agricultural production for national food self-sufficiency, amidst recurrent droughts, climate change and disjointed efforts by actors in the ag­ricultural value chain and supporting ecosystems. A vibrant agricultural sector leads to a vibrant and competitive manufacturing base, and breeds oppor­tunities for growth in infrastructure, tourism, and services, while complementing resource exploita­tion activities, as the majority of miners, by head count, are actually agriculturalists first.

We, therefore, must seek out “Synergies for Growth” and “Cooperate, Collaborate and Comple­ment” with each other, at individual and collective levels, and in household, community and national spaces, to accelerate national socio-economic trans­formation.

7.0 Logo

ZIMBABWE AGRICULTURAL SOCIETY

The Zimbabwe Agricultural Society’s 2020 theme icon, whose hallmarks are a green leaf merged with a solar panel, a green factor}’ and sturdy shapes formed with a combination of a miner’s helmet, bat­tery and gear, captures perfectly the organisation’s desire for the creation of cross industry cooperation and unity of purpose as the country comes to grips with climate change and the need for eco-friendly strategies to combat its effects.

The merger of the green leaf with a solar panel symbolises the standards of renewable energy that the ZAS advocates for at a time awareness of cli­matic instability is rising, while the green factor}’ showcases the Society’s eco friendly stance which is underlined by the fact that it emits biodegradable gas, instead of eco-hazardous toxic fumes, which bellows from the factory’s outstanding lime tower. The alignment of the miner’s helmet, battery and gear suggests the perfect synergy between various players that the organisation aspires towards.

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