Connecting command agriculture with industry revival
THE agriculture sector the world over is a key pillar of industrialisation and progressive countries have taken ruthless decisions to increase productivity and develop their economies.
The quest for food security has become a common thread that links different challenges countries face and helps build a sustainable future, according to the United Nations Food and Agricultural Organisation (FAO).
The above view suggests that sustainable development cannot be realised unless hunger and malnutrition are eradicated.
In this regard it will be naive of Zimbabweans to think that economic turnaround will happen without a vibrant agriculture sector. Neither will economic transformation be brought about by foreign investors alone without the full participation of locals.
Although considerable effort has been devoted to pursuing open market policies and appealing for foreign direct investment (FDI), evidence on the ground shows these have not yielded significant results of sustainable economic growth and industrialisation.
Economic experts have pointed to the need to develop home grown solutions with a bias on agriculture – the backbone of the country’s economy. This thrust has gained credibility over the years in view of the link between the demise of the country’s manufacturing industry in the last decade or so and a decline in agriculture productivity.
The growth of the sector has been sluggish since the turn of the millennium as scores of indigenous commercial and communal farmers who benefitted from the land reform programme continue to face numerous constraints that hamper productivity. Lack of funding from the banking sector and climate change, which has resulted in the shift in seasons and coupled with recurrent droughts, have been chief impediments.
In the context of these realities the Government has taken the lead in steering economic growth through indigenisation anchored policy interventions such as the land reform programme, one of the giant steps towards empowerment in post independent Zimbabwe.
The newly introduced Command Agriculture Scheme, therefore, buttresses this home-grown initiative that promises to be a game changer in the food security and nutrition realm.
Increasing agriculture output is a key component of the country’s five-year blue-print, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim-Asset).
The Command Agriculture Scheme also known as the Special Maize Production Programme will be rolled out in the forthcoming 2016-17 season with a target of cultivating 400 000 hectares of land, expected to produce at least two million tonnes of maize, enough to meet national annual food requirements for the country.
The programme is set to gobble approximately $516 million for the initial three years with key expenditure relating to inputs and labour as well as harvesting costs, land preparation and transport expenses.
Last week Finance and E c o nomi c Development Mi n i s t e r Chinamasa said the Government w a s engaging the banking and private sector to mobilise the respective resources to support farmers under this programme, on a cost recovery basis. “Already, a facility to the tune of $85 million is now in place, and is being coordinated through the Office of the President and Cabinet,’’ he said while presenting the mid-term fiscal policy review statement. Of the targeted 400 000 hectares, 264 000 hectares is dry land while 136 000 hectares is irrigable. This import substitution maize production programme targets both A1 and A2 farmer-participants as well as Government institutional farms, particularly those near water bodies. Already, more than 310 000 hectares of land have been identified, of which over 105 000 hectares is irrigable land, while over 204 000 hectares is dry land. With Zimbabwe expected to receive normal to above normal rains during the 2016-17 rainfall seasons, according to the Meteorological Services Department, experts are already advising farmers to plant with the first rains, which are expected to come as early as late September in some parts of the country. According to Minister Chinamasa, farmers have started signing performance contracts, initially for three consecutive growing seasons, commencing with the 2016/17 summer season, and will receive support covering seed maize, fertilizers and tillage. Beyond the food security goal of this initiative lie industry revitalisation, that long desired goal in which local companies, particularly food processing entities, stand to benefit immensely, with possibilities of more job opportunities arising from improved capacity utilisation.
Milling companies such as National Foods, Blue Ribbon and dozens of indigenous medium scale players, beverage makers like Ingwebu Breweries and Delta Corporation, stock feed makers and many agro-processing entities, constitute the bulk of manufacturing firms in the country with a huge employment capacity.
Yet in the absence of a robust agriculture sector, these firms have suffered reduced capacity utilisation being forced to rely on imported raw materials resulting in depletion of foreign currency reserves and resultant trade deficit.
This year’s estimated maize harvest of 511 816 tonnes falls short of the normal national grain requirement of 2.2 million tonnes –forcing the Government and the private sector to provide for the deficit of 1.7 million tonnes complemented by development partners.
As at July 29, 2016, Treasury reported that Government had procured imports of 188,831 tonnes of maize, costing $71.5 million.
On the other hand, the private sector had imported 278 000 tonnes in the form of maize and mealie meal, worth over $100 million by August 2016.
Given that most companies derive their raw materials from the agriculture sector, Zimbabwe would in the long term need to extend the “command” approach beyond maize production and cover livestock and poultry production as well as other critical cash crops such as cotton, soya bean, wheat, sun flower and a host of horticultural products.
With a surplus agriculture output Zimbabwe can successfully champion the value addition and beneficiation drive, also a critical arm of Zim-Asset, and not only meet domestic demand but saturate the export market as well.
The revival of these firms will also create markets for farmers, boost economic opportunities in rural areas, stimulate jobs and attract higher domestic and foreign investments in the rural areas.
The synergy between increased agricultural output and industrialisation is crucial in empowerment of communities and poverty alleviation. Moreover, the two need to work hand in hand to avert post harvest losses, which are rampant across Africa.
According to the African Development Bank (AfDB) the continent spends $35 billion on food imports each year and this is attributed to lack of policy measures that link agriculture and processing industries.
“Massive quantities of food crops, fresh fruits and vegetables and dairy products go to waste in rural areas, while Africa depends on food imports,” says AfDB president, Akinwumi Adesina.
He underlined the importance of policies to support the establishment of private sector-driven food processing and manufacturing companies in rural areas to deal with the immense food waste, enough to feed at least 300 million people a year.
The agro-allied industrial zones and staple-crop processing zones in rural areas, supported with consolidated infrastructure, including roads, water, electricity, will drive down the cost of doing business for private food and agribusiness firms, Adesina added.
In Zimbabwe industry captains led by the Confederation of Zimbabwe Industries (CZI) have already identified 18 value chains that can be implemented to jump start economic growth in the country.
Among these is the cotton to clothing value chain, beef to leather value chain, fruit to can or horticultural farm to juice value chain and so on.
Major emphasises should, therefore, be directed at reviving all value chains as opposed to targeting individual companies, says Mr Busisa Moyo, the CZI president.
Already indications are that the Sadc region and Comesa, to which Zimbabwe is a member, have a food supply gap that local firms could tap into and increase their earnings.