If we continue focusing on the local market we are just shifting models – from supporting tomatoes to cabbages to butternuts to sweet potatoes to livestock to onions to maize to tobacco. That way, it is impossible to realise the full growth potential of our resources
Charles Dhewa
Like many African countries, Zimbabwe is endowed with many natural resources such as land, water and a climate conducive for producing diverse crops and livestock.
In fact, available resources far outweigh our capacity to exploit them towards meeting national and global demand.
Unfortunately, our agriculture continues to produce mainly for satisfying local demand when there is a bigger world ready to accept commodities from our abundant resources.
From a knowledge generation perspective, our education system was designed in ways that do not enable us to fully exploit our resources.
To the extent that demand is defined mainly by population size, an internal focus means we are targeting 13 million Zimbabweans whose buying power has become erratic or static over the past few decades.
Consumption patterns and tastes for this population have also been changing, which means we have to work hard in order to keep up with demand.
The gains of our natural resources will become realised when we fully utilise them to meet global demand rather than locking ourselves within local consumption boundaries.
For any given nation, there is a staple food basket which controls about 60 percent of local production.
In Zimbabwe, maize and other field crops constitute 80 percent of the food basket with horticulture constituting the remainder (20 percent).
A closer look at our production capacity of maize and other field crops shows that only 15 to 20 percent of our available resources are being utilised.
Two million tonnes of maize can feed the nation but that target can be reached by using less than 10 percent of our resources.
However, due to lack of options, we now have a vicious cycle where local resources support each other to fulfil local demand.
As a result, the economy is constraining from growing at its potential pace.
If it is correct that money in circulation is around $3 billion, it means more than 80 percent of it is moving between local production and consumption. We need economic models for breaking out of this cycle.
The increasing need for new agribusiness models
As a nation, we have depended on the same crops and agribusiness models for too long.
From a strategic and sustainability perspective, crops such as maize, cotton and tobacco are already losing their feathers. We need new models that can match our new potential.
Since existing commodities have reached their saturation point, new agribusiness models should be driven by the new global demand zones.
If we continue focusing on the local market we are just shifting models – from supporting tomatoes to cabbages to butternuts to sweet potatoes to livestock to onions to maize to tobacco.
That way, it is impossible to realise the full growth potential of our resources.
Evidence from eMKambo reveals that local markets have already defined the size of our national requirements, consumption patterns, taste and buying power.
Excess commodities flowing into local markets lead to suppression of income for farmers and high losses through gluts.
There is a limit beyond which our formal and informal food markets can absorb certain quantities of agricultural commodities while remaining viable.
The need to explore ways of taping into our excess capacity and save the global market has never been so apparent.
Change of land use and ownership should be matched with new markets exploration.
No matter how good one is, one can only do so much with same crops if the market has reached a saturation point.
No amount of knowledge will transform the situation if commodities have reached their ceiling.
While our staple production can ensure food and nutrition security for the local population, the growth of the agricultural sector and the whole economy will remain constrained unless we open global markets.
Most of our staple field crops such as maize do not command high value. In terms of production, most of our commodities absorb thousands of hectares and tonnes of inputs.
Using irrigation to grow such crops is a waste of scarce resources. The only reason literate people end up depending on trying to commercialise staple crops is because they lack knowledge of global markets as well as commodity options.
There are also signs that staple crop consumption like maize is going down in Zimbabwe due to changing consumer tastes and the proliferation of substitutes such as rice, potatoes and sweet potatoes.
Need for alternative agricultural commodities
Due to climate change, regions which used to be good for the production of staple crop are no longer able to sustain such production.
It is now necessary to identify commodities that bring in foreign currency and use proceeds from those commodities to buy staple food.
Land that used to be preserved for low value local commodities can be re-purposed for commodities with comparative advantages on global markets.
Most staple crops like maize cannot be used as export commodities due to our comparatively high production costs that make them uncompetitive on the global markets.
Again, the fact that Southern Africa has the same staple food means when the region experiences a good rainfall season, every country has surplus maize and there is no market for the crop in neighbouring countries.
Therefore, any surplus in staple crops is a waste in terms of the product itself, resources used to produce it such as labour and inputs.
More importantly, excess beyond the local market demand ceiling results in suppression of prices, making it difficult for farmers to sustain their activities.
Many contract companies and millers are not keen to contract farmers for most staple crops because they are aware of these viability dynamics.
The cotton story is now common knowledge.
Due to the collapse of our clothing sector, we have been inundated by second hand clothes from Western countries where we used to export our cotton.
That is dealing a heavy blow to our cotton production. Horticulture has also reached its ceiling. Putting our best land to tomatoes and leafy vegetables is under-utilisation of the highest order.
Rehabilitation of irrigation schemes should be a purely business imperative not merely for supporting the production of green mealies and vegetables.
That can be done by local gardens. Irrigation schemes should produce income from export commodities because they have infrastructure.
They cannot be seen to be competing with smallholder grandmothers in producing tomatoes and saturating local markets.
Smallholder farmers should be the Irrigation schemes join the superior league of exporters. Agriculture should be associated with rural industrialisation.
We have also focused too much on urban industrialisation which has also become over-saturated.
It is uneconomic to set a tomato processing plant in Harare or Mutare when it should be in Mutoko or Honde Valley where processing by-products can be produced. The establishment of big companies in Harare during colonial times was ideal because there were large-scale farmers who produced in bulk.
Supportive infrastructure like railway system, warehousing and cooling facilities was also available. Why should we continue with that model when the context has changed?
We need to vigorously explore commodities with a global reach into big markets such as Asia where there is enormous potential for developing a new growth path through new business models.
What is critical in developing such models is identifying demand, starting with understanding their consumption patterns, particularly of staple food which in most cases constitute more than 80 percent of the demand.
A key demand factor is population, supported by buying power. Proportionally, the higher the population, the higher the demand for food. Growth in population determines growth in demand.
An expanding middle class in some of the global markets is triggering change in their consumption patterns, leading to local production in Asian countries, for instance, failing to meet this demand from the middle class.
Income has a way of influencing people to change their consumption patterns. Income levels in some countries is rising as shown by an increase in the number of tourists from these countries into African countries like Zimbabwe.
Global markets generate growth in the Gross National Product (GNP) as opposed to the GDP which has become our albatross for too long.
Where we are talking about Foreign Direct Investment (FDI) it should be about global markets coming to invest in our local economy – bringing technology for adding value to local commodities.
The right value addition expertise will flow in through markets to support their suppliers. That is how we can attract technology into the economy. The market will also bring relevant expertise in processing, marketing, etc. That will foster demand-driven production informed by global markets and tastes. Lessons from cotton and tobacco production are important in this new thrust.
Farmers who have been involved in cotton and tobacco production have been exposed to international market experiences in one way or another.
Limitations of mono-cropping have been seen in cotton production where disruption in international prices has impoverished farmers who are now turning to sweet potatoes and other commodities in desperation for alternative commercial crops.
Tobacco ant-smoking lobbies cannot be ignored from a strategic point of view because they undermine the credibility of our tobacco industry.
We have to broaden our export potential base through understanding and meeting global consumptive commodity requirements.
Eventually our local population can develop a taste for such commodities thus broadening our local market and cut on imports. On the other hand, globalisation has resulted in an increase in the global population in Africa and Zimbabwe in particular and these require their own staple food.
Foreigners in Zimbabwe will certainly welcome their staple food.
Many foreign restaurants that are opening up in Zimbabwe and other African countries should not continue importing their food from their countries when such food can be grown efficiently locally. By allowing that to happen, we are allowing externalising of foreign currency to happen under our nose.
- Charles Dhewa is a proactive knowledge management specialist and chief executive officer of Knowledge Transfer Africa (Pvt) (www.knowledgetransafrica.com ) whose flagship eMKambo (www.emkambo.co.zw ) has a presence in more than 20 agricultural markets in Zimbabwe. He can be contacted on:[email protected] ; Mobile: +263 774 430 309 / 772 137 717/ 712 737 430.