Grains should be stored carefully to avoid damages in a clean and dry place
Charles Dhewa
Our main challenge at the moment is preserving gains from a good rainfall season in Zimbabwe. In comparison with the past decades which have been characterised by dry spells and droughts, this season received significantly good rainfall.
There are many old people who say they cannot remember the last time it rained like this year, since they were born. Good rainfall is associated with better crop harvests and an increase in the number and size of livestock such as cattle and goats.
However, the main question is how can the agricultural sector preserve and sustain gains from a good rainfall season, capture emerging opportunities, muster the market’s gravitational pull and generate a positive multiplier effect for the economy?
Need for coordinated decision making
Fragmentation of agricultural efforts is diminishing the power of scale to preserve what has produced and shape markets. When uncoordinated decisions negatively affect the entire agricultural industry, effects are visible in the market and the after-shocks are felt in the farmer’s pocket. Some of this is due to hidden connections between value chain actors.
For instance, vendors have connections with farmers in ways that are not visible to all actors. Uncoordinated production challenge the ability of farmers and farmer organisations to influence the market and prices of either inputs or commodities.
Ultimately, it becomes difficult for government to implement effective regulation. With so many value chain actors interacting in so many invisible and different ways and from many locations, it is becoming harder to predict agricultural gains and impact on the whole economy.
Trends and preparedness for good harvests
It is not clear how the nation has been prepared to accommodate new good harvests which have mostly been unplanned. This preparation can be in the form of individual household and national reserves as well as the market’s capacity to absorb surplus food. Normally markets take time to adjust.
For the past 10 years, the market had stabilised such that there was no inflation associated with food commodities like maize. Using indicators like prices of basic commodities, there has not been significant inflation. Of course, there has been supplements through imports, here and there.
The informal market continued to play its food redistribution role. Maize prices remained at between $4.50 per bucket and, in rare cases, $8 to $10 per bucket for the shorter part of the season towards the next planting season. Prior to the current bumper harvest, the economy had adjusted to complement food commodities.
For instance, consumers had begun substituting maize with rice, sweet potatoes substituting bread and potatoes as well as other horticultural commodities coming in to play a major substitution role.
Since the economy had adjusted remarkably, cycles of drought could not exert much pressure on commodity prices.
With small grains doing well in dryer regions, the demand for maize was not affected as would be the case in good rainfall seasons where maize would be abundant. Normal to above normal rainfall season tend to affect dry regions because the true picture of the season would be fully discovered after the planting season.
The big question
The big question is whether households or given markets would be able to consume more staple commodities due to a bumper harvest. Obviously, people are not going to eat more maize.
It means any excess in harvest due to a good rainfall has an incremental effect on the surplus than to household consumption.
A household can increase consumption by five percent and 95 percent surplus will be shared between the market and household reserves for future food sustenance.
What plans do we have at national level to accommodate the 95 percent surplus?
Since an increase in harvests is not absorbed at household level, what do we do with the surplus which is supposed to sustain the gains of a good farming season? What strategies do we have in place?
The prevailing scenario is that at household level, 20 percent of surplus can be kept as reserves and part of household coping mechanisms.
Where a farmer used to reserve five bags of maize per season and, good rainfall caused the farmer harvest 20 bags more, five bags can be for immediate consumption, another five bags be reserved and 10 surplus bags go to the market.
Unfortunately, since almost everyone has maize in a bumper season, who is going to buy from each other given the high demand for cash to cover school fees, medical needs and other requirements?
Every household will be pushing surplus to the market, resulting in short-term market gluts suppressing prices.
It is highly likely that most farmers will lose the economic value of their commodities due to suppressed prices.
That has a medium to long-term effect because, in the event that the coming season has good rains, farmers will not have enough resources to buy inputs which do not adjust prices downwards in response to good rainfall seasons. Inputs have their own cost structures and influencing factors. There is possibility for reduced production due to failure to retain the good rains.
Government as the main buyer
A compelling option is for Government to provide the market by buying commodities at favourable prices as a way of building national reserves for the next three to five years. This becomes a buffer to the national economy in the event of drought.
If such strategies are put in place, the Government will be able to advice farmers so that they reduce hectares for particular commodities in the next season and direct resources to other uses rather than continue producing maize when national reserves are full.
Farmers can be advised to go for pulses. This should be promoted from national level assuming policy makers have a correct national picture.
While Government seems interested in maize, what about surplus livestock, horticulture, small grains and other commodities triggered by a good rainfall season?
There are regions good in small grains, livestock and maize separately.
Ideally, the Cold Storage Company or another government facility should buy surplus animals from farmers so that farmers are able to invest in other complementary economic activities.
In the event of drought, farmers can go back to the CSC for re-building stock. Government should buy commodities and provide evidence-informed advice for the coming season.
Eventually, we can end up with a full national food basket within the national reserves. The unintended consequences of good rains is that everyone has the same commodity. Farmers cannot mobilise themselves to consolidate commodities because information is isolated and fragmented. Most of them tend to discover shocks when they are already in the market. A farmer in Karoi does not know how much a farmer in Gokwe has produced but the government can pull all that intelligence together. Leaving everything to the market can result in farmers being carried away by the profit and sell all the maize.
Farmers can make decisions individually but the consequences of those millions of decisions can be felt nationally. There can also be exploitation by speculators who are good at speculating around drought and distribute food to other regions while earning abnormal profits. Leaving everything to speculators makes it difficult for government to know where there are shocks.
To what extent are the rains used when they have fallen on the ground?
Rainfall is only used for two to three months of the year. That is instant utilization but are there plans for the next nine months? In most cases there are no plans at local level. Planning with big dams like Tokwe Mukosi may not be ideal because not everyone wants to use such huge bodies of water when water could be available in local reservoirs.
How good are we at preserving water? Underground water is disappearing.
We cannot infrastructure such as small dams, bridges and roads when it is raining just as we cannot develop water harvesting infrastructure when rain is already falling. It should be planned ahead of time. Available rainfall or water should be used to sustain nutrition through horticulture.
While field crops like maize are for food security, the nutrition component can be balanced through horticulture and animal nutrition. Horticulture reduces pressure on good maize harvests and enlarge the food basket, thus reducing pressure of staples. Instead of selling maize to meet other needs like school fees, farmers can engage in horticulture in order to buy what they want with proceeds from horticulture.
Importance of minimising guesswork
We seem to be functioning in a guess-work mode. This season was characterised by good rains, normal, above normal and excessive (floods). There have also been hailstorms, pests and diseases. Damages from all these have not been quantified due to lack of a robust tracking and updating system.
Crop assessments are far too irregular to capture all these issues. Some farmers lose income through getting into the market first and selling at give-away prices or they can cause short-term gluts when prices may improve in the next six months.
To determine if the industry can sustain the current level of production cost, we need to look at the source of cost savings in detail and judge if the savings are temporary or potentially permanent. There should be points where farmers and value chain actors shift from production measures to sustain the efficiency gains from a good season.
That will fuel their ability to capture additional opportunities such as value addition. Preserving and sustaining the gains of a good farming season cannot be left to individual farmers.
It should be in the hands of the entire industry working together with government. Success may be achieved through harnessing new technology and refining agribusiness models in order to minimise avoidable costs.
The unfortunate thing is that a good rainfall season rarely reduces the cost of production because the cost of inputs does not respond to an increase in available outputs. The cost of fertiliser does not change according to an increase or decrease in maize harvests.
Another challenge is the extent to which farmers and other value chain actors can know what they are supposed to remember. It is no longer about the amount of knowledge but the quality of knowledge. People cannot remember everything they know and in some cases they may forget most of their best thoughts and perspectives that are critical for sustaining gains from a good agricultural season.
- 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.