Patronage stifles agriculture
Source: Patronage stifles agriculture | The Financial Gazette September 1, 2016
SEPTEMBER is a very busy month for any person who aspires to be counted among those that boast to be farmers in Zimbabwe.
It is a month when real farmers worry about making sure that everything is in place for the next farming season… inputs, implements, capital and labour.
With these in place, the only worry a farmer is left to contend with is the rain…whether enough rain would come.
However, as the political situation in Zimbabwe deteriorates, it is increasingly becoming common for some farmers to have more worries than others.
For Victor Matemadanda, the secretary general of the Zimbabwe Liberation War Veterans Association (ZLWVA), there is more to worry about situations that are out of his control than just the rains.
The “rogue” war veteran’s main worry is security of tenure… even with his 99-year lease in the back pocket, he cannot say with certainly that by harvest time, he will still be on Garowa farm.
His farm, located about 50km east of Karoi town, in the prime farmlands of Tengwe, was recently invaded by hordes of rambunctious youths linked to ZANU-PF who want him off the land.
His crime? Political “apostasy”, an unforgivable “crime” to those that see themselves as being on the correct side in the fractious ruling ZANU-PF party.
Matemadanda is one of the hundreds of Zimbabweans who may genuinely want to till the land and restore the country back to its envied status as the basket of the region, but whose continued stay on the land is subject to the vagaries of politics as land has easily been changed from the means of production that it is naturally supposed to be, to become a tool for control and manipulation.
Among those who find themselves in the same precarious situation as Matemadanda is the whole motley of characters that has dared to disagree with the way things are done in ZANU-PF. These include Joice Mujuru, Didymus Mutasa, Dzikamai Mavhaire, Christopher Mutsvangwa, Agrippa Mutambara, Jabulani Sibanda, Temba Mliswa, Sylvester Nguni, Bright Matonga, Ray Kaukonde, Douglas Mahiya, Munacho Mutezo, Kudakwashe Bhasikiti, Kudzai Mbudzi… the list is long and continues to grow by the day.
Although on paper these people had duly benefited from the land reform programme first and foremost because they were indigenous Zimbabweans — “vana vevhu” — their Zimbabwean-ness suddenly became subject to peremptory review the moment they were considered to be “in the wrong basket”.
A number of them have had their farms invaded or are under threat of invasion.
That some of these people have been on these farms for more than a decade, does not count.
Such are the vagaries of farming in Zimbabwe, a country in which political allegiance — not farming skills and demonstrated passion — decides who has access to some of the choicest pieces of land; even if in the end it is just for ornamental purposes.
In the past decade and a half, the banking sector has progressively scaled down on the loans they could extend to white commercial farmers because they had become high risk — thanks to the country’s land reform programme that primarily targeted them for dispossession — but with the feral fights that are raging on in the ruling ZANU-PF party over its sticky succession issue, that risk has since started extending to black farmers as well.
It is in the background of this uncertainty that one government official after the other is queuing to excoriate the financial services sector for being reluctant to extend loans to the agriculture sector.
“Let’s look at the borrowing of yesterday,” wrote Deputy Agriculture minister, Paddy Zhanda in the official media this week.
“Yes, title deeds were very important, but that borrowing was based on faith and trust. They knew you and thus could lend you some money. You would get funds on a five-year term to buy a tractor and about 12 years for an irrigation development scheme at five percent interest rate. Twelve years of paying interest at a five percent rate, surely it made sense. But today, even if the 99-year leases were bankable, the issue is that bankers will not be honest.”
In a country where politics is such that everyone has to live each day as it comes, who would want to extend a 12-year loan to a farmer?
Clive Mphambela, the advocacy officer for the Bankers’ Association of Zimbabwe, agreed that at the present moment, banks are looking beyond the 99-year leases when considering giving loans to farmers.
“It should be noted that having a 99-year lease on its own does not guarantee a farmer access to bank loans,“ Mphambela wrote in a recent article in which he sought to explain to farmers why, even with their 99-year leases in hand, accessing loans is not automatic.
“Banks will have to look at various other risk factors in assessing whether a farming business meets the minimum criteria set by the banks for lending purposes. Most importantly, the farming enterprise must be viable in accordance with the assessment criteria set by the lending bank. It is, therefore, possible that occasionally, other risk factors will militate against the granting of a facility to the farmer,” Mphambela explained.
And when they do lend to these farmers, it is strictly short term and the interest rates are very high to reflect the equally very high risk they would be bearing.
Security of tenure is certainly one of those factors that banks would be looking at when they consider loan applications from farmers, and it is this security of tenure that the uncertainty caused by the fall-out from the politics of patronage effectively takes away.
In the past, even in cases where it has not been possible to evict the no longer desired elements from the farms, it has not been unusual for spanners to be thrown in the works, including cutting access to water and or electricity as well as threatening the workforce, thereby disrupting the smooth running of the farms.
Last year, an invasion force descended on Mliswa’s Spring Farm in Karoi, leaving a trail of destruction and scores of workers injured, some of them with permanent disabilities. Although Mliswa might remain on the farm, banks would always give him a very wide berth, as he is a sure high risk.
Economist John Robertson told the Financial Gazette that if Zimbabwe’s agriculture is going to recover, politics of patronage would have to end so that holistic changes can be made to the sector.
“Market forces, coupled with security of tenure and functional banks, work very well indeed. If Zimbabwe hopes to see a quick recovery, it should trust market forces to deliver the needed commitment from farmers and all other producers, investors, service providers and workers,” said Robertson.
“And the process would be simple: Put the land back into the market and make constitutional amendments to guarantee security of tenure.
“Repeal the Indigenisation Act (which is subject to wanton abuse by politicians), because this Act is an attack on property rights.
“Remove the dozens of controls, licences, permits, levies, project approval procedures, registration demands and fees that currently make businesses almost impossible to start and make existing businesses very expensive to run. These unnecessary costs have become part of the reason why Zimbabwe has become uncompetitive in the region.
“Abolish the police road blocks, and adopt a policy mix that clearly shows government’s intention to facilitate business, not to regulate business.
“Enforce the existing laws of the country by prosecuting those found guilty of corruption. Too many people in Zimbabwe are able to claim impunity and exemptions. Nobody should be able to claim the right to break the law.”
He said with these changes, market forces would start working for the country, not against it.
“Market forces are indiscriminate and work to a very simple rule: If you make the right decisions and do the job right, you will be well rewarded by the market, but the market will penalise you, if you make bad decisions and do the job badly.
“Zimbabwe can no longer afford people who claim the rights to perform badly and to still receive generous rewards.”
One thing that is certain in all this uncertainty is that for as long as land is seen as belonging to a certain faction of the ruling ZANU-PF party, a commandist approach will continue and risks would remain very high to the detriment of the farming sector.