Con­nect­ing com­mand agri­cul­ture with in­dus­try re­vival

Chronicle (Zimbabwe) - - Business - Pros­per Ndlovu

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.

Min­is­ter Pa­trick Chi­na­masa

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