CFU PRESIDENT’S ANNUAL REPORT 30 OCTOBER 2013
Your Excellences, Ministers of State, Presidents and Guests from our Unions both here and outside of our borders, Ladies and Gentlemen welcome to this our 70th congress. It is a great pleasure and indeed an honour to present to you the President’s Annual Report for 2013.
However, before I start I would just like to mention a few “Thank You’s”. I would like to thank my Council and Exco members for guiding us though a very difficult period in our history. Your wise council and commitment has never ceased to amaze me and further more it has been a great privilege to have had the Matabeleland representatives under Mac Crawford back at the table.
I would like to thank the ARAC board under the capable leadership of Rod Swales for their last year’s service. ARAC, under your direction and Ben’s management continues to grow and provide a strong point of reference for our non-farming farmers. This organisation is now under the chairmanship of Patrick Ashton who I have absolutely no doubt will continue this great work.
To my close friend John Laurie who at his own expense, and despite his health difficulties faced during the year continues to push to finalise the extensive data base with his Valcon partners. John, our farmers owe you a great deal.
To our Trustees and Internal Auditors too I thank you for your confidence and guidance in our fund management in what can only be described as a very difficult financial period.
To my Director, Hendrik, who has shown commitment to both this organisation and his farmers and who has continued to support both myself and Vice President Pete Steyl in a strong and loyal fashion – your work has been exemplary.
Last, but not least to the entire staff I thank you for your continued efforts and loyalty in extremely difficult circumstances, and I was fully aware of your concerns regarding the survival of your union but you have never wavered and I thank you all.
I would also like to thank the Honourable Minister Nyoni for her speech and I find a great deal of optimism hearing her words. I sincerely thank you Minister.
To President Evelyn, thank you too for your speech and as always it was extremely positive and encouraging and I congratulate you and your farmers for the Agricultural turn around that you are currently experiencing.
To all those senior politicians and powerful people who have engaged us in a positive and progressive helpful manner, some of you whom are here today, I thank you and welcome.
To our friends from the regional unions I thank you for your camaraderie and friendship over the last year and let us continue to work together to develop a strong regional body in the form of SACAU.
This year for the CFU has been one of momentous change and repositioning. Sadly it also saw the tragic and sudden deaths of two of the most loyal Zimbabwean agriculturists so deservedly praised earlier by Vice President Pete Steyl. They were the late Trustee Pieter Henderson and our crop scientist, the late Dr Clive Levy. It was indeed an honour to have known these two men who were so devoted to their country and to their sector, our thoughts and prayers continue to be with their families, they will be sorely missed.
The first major adjustment was the sale of Agricultural House, there has been an immense amount of rumour and speculation around this issue, and I believe that the finances surrounding this sale have now been highlighted in detail in the earlier session. The need to sell agricultural house became apparent some years ago with the downsizing of the union, together with the mothballing of associations. The need for such a structure became unnecessary as well as with the negative return being received from the money invested in Agriculture House over rental paid to Agriculture House making the financial demands on the union unsustainable.
Furthermore, some years ago a massive fraud took place against our union and as a result a large debt had to be serviced and this was done from the CFU proceeds, together with the settlement of many outstanding debts, the oldest dating back to 2002. The council made it clear that the CFU as a matter of urgency needed to clear all outstanding debt positions regardless of the amount or the age to insure our integrity and standing in Zimbabwean society could not be questioned or compromised. This has now been done.
The CFU then relocated and initially invested the substantial balance in two banks for the bulk of the year, which gave us a handsome monthly return. However, two months ago Council felt that with the immense liquidity pressure facing the country it would be prudent to re-invest these funds into bricks and mortar, which I’m happy to report has been finalised. The net returns from these investments are slightly greater than the net return we were receiving in bank interest.
At this juncture I would sincerely like to thank the two banks involved, namely NMB and Tetrad for their outstanding service supplied to us over this period, and I sincerely hope that a long term relationship with your institutions is guaranteed.
The CFU continued to downsize to try to stay within the income streams, but we are now at a stage that if we were to downsize any further our service ability would be compromised, and our focus must be at all time to service our members. So there will be no further downsizing but rather a renewed effort of income upsizing will be the order of the day and too that end we call on all members past and present to come on board to maintain a strong and vibrant union.
During the year we entered into a contractual arrangement with IETC in a soya and maize out-growing programmes, which despite the rushed preparation at the beginning of the last summer season, overall it was a success. However I must stress my total disappointment and indeed anger at those growers, few in number, who chose to side market outside of contract.
This is totally unacceptable and will not be tolerated. If we as farmers wish to enter into corporate relationships we must maintain at all times total honesty and integrity anything less is not an option. To the majority who honoured their contracts in full I thank you and I hope this program and others will develop and grow for the benefit of us all.
During the year, council took a position that CFU needed to raise its profile and spread its ideas to a greater audience and as a result embarked on a publicity campaign. This campaign was developed and presented by a very talented Gary Thomson and I am pleased to report to you that this has been a great success and that our access to relevant players has greatly improved. I would therefore like to personally thank Gary and his team for their efforts.
Our relationship with the ZFU continues to grow under the ZFAT program with the assistance of the EU, I’m pleased to report that this programme has been extended on a new two year contract beginning in January to the value of 2 million Euros. We thank all the EU countries and the EU Ambassador in particular for their support. We see this as the precursor to the formation of a single federation of agricultural unions representing all Zimbabwean agriculture along the lines of the Zambian model, which is working so well to our North.
We also saw the dissolving of the GNU, the general elections and the emergence of a new political dispensation.
From a CFU point of view the GNU achieved very little for us and our sector. It was immensely frustrating to be working in a vacuum with no real direction and our sector continued to shrink through the uncertainty around land access and ownership, which continued.
Confidence was at an all time low and all players were apprehensive, resulting in short term decisions being applied to our farming businesses.
We now have a new government which is faced with an extremely stressed agricultural sector. We see agricultural focus being almost exclusively on Tobacco production in the absence of traditional funds and although we have seen a volumetric recovery in this commodity, however, I ask at what cost? We are seeing our national forests being harvested and turned into cash, using tobacco as a conduit which is not sustainable and is fast leading to an environmental disaster.
Ironically the total tobacco income for the last year is less than our food import bill.
I feel a policy shift needs to take place; our food security situation is precarious, with maize and wheat inflows at an all time low. We have seen the cotton industry drop by half in two seasons. The livestock industry is facing unprecedented difficulties with the local business environment not favourable for competitive production, leaving our producers at the mercy of cheap imports.
We urge Government to relook at the entire business model of our country. Let us get back to basic economic fundamentals which will be conducive for growth and prosperity. We need to work together to formulate policy at a national level for the sole purpose of re-energising our economy with agriculture at its core.
An active land market in some form is needed to move agricultural away from donor support towards a structured business footing allowing for the re-establishment of the banking sector, in terms of agricultural funding.
We must remember that prior 2000, over 85% of all local lending was land based. This is now absent, leaving our banking industry greatly weakened.
We as a country urgently need to embrace new technologies so as to bridge the technology gap. We cannot expect our farmers to feed our country and its peoples using 14th centenary technology. We would like to see and promote the small and large scale linkages promoting symbiotic relationships between the two, making way for a diverse agricultural base.
Strong country – town relationships must be encouraged creating forward and backward value chains that will see the national development of our supply sector, of our manufacturing and value addition sectors as well as the so needed infrastructural development. This will naturally lead to the establishment of vibrant economic rural hubs so desperately needed in order to attract young Zimbabweans into the agricultural field.
If we are to succeed in the global environment a holistic approach is required, and as a matter of urgency regional policies need to be established on issues such as transport, import and export tariffs, water usage and development, electricity development and distribution all needed for the establishment of a regional power house which is competitive on the international stage.
At a national level, a new Water Charter needs to be aggressively pursued which will encourage the development of water storage and irrigation so vital for weather mitigation against the back drop of climate change. A good African example of this is in Kenya, who three years ago embarked on an extensive irrigation drive and in those three years has developed 1 million hectares of irrigation. This is where we must go.
A new Agricultural Labour Charter needs to be developed, which will encourage employment, maintain competitiveness as well as grantee agricultural workers, good housing, education and health.
All commodities in our sector require specific attention from livestock to flowers and everything in-between. It is imperative that a broad, diversified agricultural base is developed against a sound stable economic environment.
Our research and agricultural education sectors have been starved of funds over recent years and such institutions must be re-energised to maximise potential and out-put so as to guarantee a continued flow of young agriculturists into our sector together with the assurance of regular technological advancements.
I would also like to request of Government, that they look at the current tax and levy laws and acts that in many cases are actually becoming punitive to primary producers. We feel a more centre-line taxation approach is possible which would see 100% of the population paying 100% of the tax.
As a country, we must look to engage with all countries and potential investors willing to invest within our borders. Isolation is not an option if we are looking for the most advantageous deals for our country.
We must also realise that no sector in this country can be developed successfully in isolation. All sectors are interlinked and interdependent and as such all need each other because an all-inclusive approach is essential for long term sustainable success.
Zimbabwe Pvt Ltd must be investor focused and open for business.
How is this achievable?
Well, we need investor friendly policies both of an internal and external nature which will lure the much needed investment. We need to remove the impediments that are currently preventing such investment flows.
To my mind the single biggest impediment to future investment is the still unresolved issue of compensation for farming businesses acquired during the land reform programme.
If we as a country, can formulate and structure an internal settlement to fully resolve this issue in a manner which is all inclusive and mutually beneficial we will be able to present to the world a platform upon which investors can engage.
In all my travels around the world there is immense goodwill towards our country and its people and I can guarantee that if we resolve our own issues large funding lines will become a reality.
To this end, we at the CFU have developed a proposal which aims to monetise lost value and places that value into the economy thus removing any remaining conflict. This would also free up the collateralisation of land value in the new agricultural dispensation and most importantly free up the entire economy for business growth, development and employment in a win-win fashion.
This proposal has been widely canvassed in its development and is now at a stage where government could take ownership of this with all stakeholders support. We at the CFU would be fully behind such an initiative as we feel than any solution to be found must be mutually developed and acceptable to all.
Such a programme is not new. A similar programme was used to uplift the United States of America out of the great depression in the early 30’s and then again in Europe after the last Great War. It can be done!
In order for this to become a reality we need to deal in an open and transparent manner creating trust on all sides.
We need to remove the “them” and “us” approach and focus on us the Zimbabwean people.
I would like to see agricultural classification based on size and production capacity rather than on racial lines. Those days are far gone, and as a society we need to heal. Our differences have seen black on black, white on white, black on white.
I say enough is enough. Let us move swiftly away from this error of division and walk this road together as Zimbabweans.
- We all need to converge to the centre ground;
- let us fix what needs to be fixed;
- let us pay those who need to be paid; and
- let us put Zimbabwe firmly back on the map.
Ladies and Gentlemen, now is the time to be bold and to make those bold decisions which have been so illusive for so long.
Opportunities abound for us all should we succeed and that success firmly depends on us and our actions going forward.
Ladies and gentlemen it is Africa’s time. It can be Zimbabwe’s time, so let us make it happen.
I thank you.
Charles Taffs
President
Commercial Farmers’ Union