Will govt deliver on agricultural plan?
http://www.theindependent.co.zw/
September 28, 2012 in Opinion
LAST week cabinet added yet another measure to its growing list of
high-sounding policies gathering dust in its offices by approving a new
agriculture plan aimed at providing much-needed cheap lines of credit for
farmers and ensuring suppliers distribute inputs countrywide well ahead of
the farming season.
Report by Brian Chitemba
Farmers are currently being charged steep interest rates ranging from 11 to
28% per annum, which the policy seeks to tackle through the provision of
cheap credit. Zimbabwe’s new black farmers, who took over formerly
white-owned land courtesy of the controversial and often-violent land reform
programme beginning in 2000, perennially complain about unsustainable
production costs caused mainly by high costs of fertilisers, chemicals,
labour, water and fuel.
Finance minister Tendai Biti said under the new policy farmers would buy
inputs directly from suppliers instead of waiting for government to buy on
their behalf as this disturbed their plans due to late delivery of supplies.
He said he is negotiating with donors to ensure vulnerable farming
communities get necessary assistance to ensure improved production and food
security.
Biti’s assurances came against the backdrop of widespread complaints from
farmers’ unions over delays in payment for produce delivered to the
state-run Grain Marketing Board.
But farmers — in the past promised assistance only for government to fail to
deliver leaving them hopelessly stranded — will at best welcome the policy
with guarded optimism. Government has a long record of policy formulation
only matched by its inaction when it comes to implementation.
The three-year old coalition government has not fared any better, drafting
and launching several ambitious policy frameworks which have been hardly
implemented.
The Industrial Development Policy, Short-Term Emergency Recovery Programme
and the Medium-Term Economic Development Plan are among the major policies
drafted and adopted by the unity government, over and above numerous other
policy blueprints crafted by the previous Zanu PF regime.
This has created the belief that some of the policies are only produced to
give the false impression government is doing something to address
multifaceted socio-economic problems facing the nation.
Critics thus say it is highly unlikely government would deliver on its
agricultural promise and it would be folly for farmers to base their
preparations on government promises. This is despite the fact that
agriculture contributes between 15-18% to the Gross Domestic Product as well
as 40% of national export earnings and 60% of raw materials to the
agro-industry.
More than 70% of the country’s population relies on agriculture for
survival, but lack of a comprehensive enabling policy has adversely affected
general productivity, resulting in the country importing grains it used to
be self-sufficient in prior to the disastrous land reform programme.
Zimbabwe Farmers’ Union spokesman Tinashe Kairiza said while the new policy
framework was progressive, farmers were anxiously waiting for government to
implement the measures to boost productivity.
“Government is facing a serious liquidity crisis, so provision of cheap
lines of credit and subsidised inputs is highly unlikely although it would
boost agricultural output,” he said.
Economist John Robertson said farmers’ demands would not be addressed by the
new policy because government was well known for failing to deliver on its
promises. He also said government had repeatedly promised to pay farmers on
time but has consistently failed to do so.
Robertson further pointed out government was cash-strapped and it would be
almost impossible for it to fund farming from its resources, unless it
relied on borrowed money despite its onerous debt. Zimbabwe’s total debt is
about US$10,7 billion.
However, Zimbabwe appears set to secure US$100 million in budgetary support
from neighbouring South Africa, part of which would be used to finance
agriculture and boost productivity. South Africa has previously helped
Zimbabwe with funds for inputs.
“The new government scheme to assist farmers is difficult to implement
because government owes a lot of money to seed producers and fertiliser
manufacturers,” said Robertson. “Government has promised farmers money
before but they failed to access the funds. The fact is government simply
doesn’t have the money. Even if it borrows from South Africa, the money has
to be paid back and that will depend on how local farmers service the
loans.”
Robertson said only a handful of farmers with collateral were likely to
secure lines of credit. Most new farmers do not have title deeds for
collateral against bank loans.
Since most of the new farmers got farms through political connections and by
virtue of being war veterans, they did not have title deeds and hence could
not borrow money from banks, he said.
However, economic analyst Eric Bloch said although government’s coffers are
empty, it could divert funds from other sectors to boost agriculture since
the majority of Zimbabweans rely on farming. He said the new agriculture
policy was likely to be implemented fast given forthcoming elections next
year.
“Politicians are aware agriculture is an important sector of the economy
hence they will seek mileage by approving and implementing relevant
policies,” said Bloch.
While farming preparations have often been scuttled by an acute shortage of
farming inputs resulting in poor harvests, Biti said the new policy would
resuscitate the virtually dead agricultural sector — the economic mainstay —
and restore Zimbabwe’s breadbasket status in the region.
Biti said the new policy is meant to help farmers end the unproductive
dependence syndrome, while security of tenure on land would assist them to
borrow.
AgriExpert economist and consultant Peter Gambara wrote in the Zimbabwe
Independent recently that government should invest in input schemes targeted
at the small-scale farmers and provide more resources to extension agents.
Agriculture financing has always favoured large-scale commercial farmers who
can use title deeds to access funding from banks, while communal farmers
with user rights struggle to get funding.
Erratic power supplies and high tariffs have also contributed to poor
production, with farmers calling for subsidised electricity supplies.
Farmers say government should revert to the preferential rate of 55% of the
electricity tariffs in place before 2009.
While farmers and stakeholders are justifiably sceptical government’s new
policy will be fully implemented, politicians are likely to pull out all
stops to deliver, given the looming crucial elections.