Can CFU proposals be trusted?

The Land Reform Programme in Zimbabwe has become one of the best empowerment models in Africa, especially as its fruit begins to show in increased agricultural productivity. Though buffeted by powerful Western countries for redistributing land to its rightful owners, the indigenous Zimbabweans, the nation has remained resolute in defending the programme. Recently, the white-dominated Commercial Farmers’ Union (CFU) developed a model that seeks to give its members a collaborative stake in the running of the agricultural sector. The union is also making overtures to work with Government. The proposal brings a new dimension to the history of the land question. Could the union be coming back into the fold after noticing the huge success of the land reforms? Could there be a hidden agenda? Below we publish a full transcript of the proposed CFU agricultural model as captured on DVD.

This is a proposal for agricultural and economic development in Zimbabwe. It looks at the main challenges of the agricultural sector and proposes a way to overcome them.

In crafting this proposal, we consulted broadly across different sectors with the aim of re-invigorating Zimbabwean agriculture.

If the environment is right for agriculture to develop, investor confidence in Zimbabwe will be restored and Zimbabweans as a whole will see important economic and capital gains. This proposal attempts to create a win-win situation, without financially prejudicing the country and its people and it allows for rapid growth to take place.

The benefits that will be realised from the successful implementation of this proposal are as follows:

New farmers will be guaranteed security of tenure, access to affordable credit and long-term investor confidence. Their businesses will become highly competitive and productive and they will be the backbone of the economy. Ordinary citizens of Zimbabwe will enjoy a vibrant and healthy economy.

The proposal is to unlock value of the nation’s principal asset base and use that value to drive production, rapid economic growth, capital gain and job creation.

On the back of the agricultural sector, supply and downstream industries will grow and thrive. Former farmers will have the outstanding issue of compensation settled. They will be able to invest in the economy with confidence. There will be mechanisms to ensure the experience and skills are not lost to the nation but rather engage to boost a new generation of even more successful farmers.

Government will enjoy increased tax revenue and decreased dependency by citizens on direct support from Treasury. In addition, a legacy of highly successful land reform will be delivered for future generations.

The donor community will have a minimal burden and will see enormous value for money in any support directed to this initiative. There will be an efficient means to cost effectively and sustainably support all farmers in Zimbabwe.

Finally, food security, both national and regional, will be assured. Here is the proposal in more depth. The first step in the proposal is that the Zimbabwean Government will acknowledge the debt owed to the former farmers as compensation for their farms. Farm evaluations will be based on the Velcon data base and will be fair and inclusive.

For every title deed held by former farmers, bonds will be issued to a value corresponding to the value of the farm. The bonds will be internationally underwritten and managed by a recognised international accountancy firm.

These bonds will be tradeable, interest bearing and will be redeemed over 10 years in annual instalments. Because these bonds are underwritten, they have value and they can be used as collateral to obtain loans.

This allows former farmers to invest money straight back into the economy, starting new businesses and generating new jobs.

In summary, the issue of bonds will monetise lost value and put it back into the economy. Once bonds are issued, the title deeds currently held by former farmers will be ceded to the Land Bank. These 5 300 title deeds will capacitate the Land Bank and will be uncontested.

They will have monetary value and will be offered for sale to the current beneficiaries on the land. These beneficiaries will receive credit lines on cheap terms from the Land Bank as the land will once again have collateral value and the land market will have been recreated.

This re-energised land market will see a rise in Government taxation revenues from increased economic activity as well as capital gains tax. As a result of the re-energised agricultural sector, we will also see the development of both supply and value-adding agricultural industry.

This will produce natural development in terms of rural infrastructure. Once value has been restored in the economy, there will be a cross-sectoral confidence boost. The property rights issue will be dealt with, which will boost confidence in public and private investment both local and international in all sectors.

The issue of bonds will also release the mortgage value of the entire country not only for the agricultural properties but across all sectors. The Land Bank will receive start-up initial finance from donors and international lending but will thereafter manage itself sustainably without further aid. It will provide a revolving fund offering loans in four categories: small-scale micro finance, and short, medium and long-term loans. These loans will be available to farmers but will also be available to the Government of Zimbabwe to finance land reform.

In addition, the Land Bank will fund a number of important areas. Firstly it will fund a mentorship scheme, where new farmers receiving loans from the fund are offered mentorship from former farmers in agricultural techniques. In this way, the national loss caused by numerous skilled farmers leaving the land will be mitigated and the agricultural knowledge of the past will not be lost and will provide a good foundation for the future. The other benefit of this is that it provides another tool for lowering the risk to the Land Bank. In order to carry out this proposal, tradeable tenure instruments will have to be introduced and changes will need to be made to the regulatory environment. In addition it will be necessary to start up a Land Commission that will carry out an assessment of farm occupancy to determine who will be eligible to receive support from the Land Bank.

The Land Commission will also be responsible for the production of policy and monitoring the implementation of this proposal.

In conclusion, we hope we have managed to convey our vision of Zimbabwe’s future agricultural system. We remain eager and willing to engage with all players to make this a reality. We hope in this way that Zimbabwe can become the shining light to all Southern Africa.