Ease of Doing Business proponents should revisit policy
The Ease of Doing Business initiative mooted by policy makers in 2016 was a commendable effort.
HOWEVER, it seems to have put more emphasis on meeting the needs of big businesses at a time small businesses are increasing in Zimbabwe. Policy makers are yet to fully understand SMEs and their dynamism. Very soon farmers will be harvesting agricultural commodities destined for urban markets.
While dealing with structural issues like the trade deficit is very important, fixing roads and market infrastructure should be the first step in making it easy for farmers and agricultural SMEs to do business.
In order to speak loudly to agricultural SMEs, proponents of the Ease of Doing Business should find time to understand the correlation between economic revival and a growing agricultural SME sector.
They will discover how SMEs try to combat inequitable distributions of capital or market power by grouping together as a survival instinct.
A close examination of the agricultural SMEs sector will also inform policy makers about the extent to which formal companies use formal standards as a barrier to entry for new entrants and a subtle tool for pushing out competitors, mostly SMEs. These are some of the issues that should be tackled by the Ease of Doing Business initiative.
Combining the local and the global perspectives
While policy makers seem to develop policies that favour large companies so that they export and bring in foreign currency from the global market, SMEs should also receive favourable policies because they strengthen the local economy while facilitating knowledge spill-overs from global markets to local markets.
As part of understanding the local and global nature of agribusiness, the Ease of Doing Business should explore the extent to which different policy instruments are affecting the distribution of economic power in Zimbabwe.
For example, the importation of food in the past few years has skewed the distribution of economic power and wealth from local farmers and SMEs to large companies with the capacity to acquire import permits and finance from banks.
Large companies have also used their power to capture decision makers and skewed policies to suit their commercial interests.
Merits of agricultural SMEs that can be claimed in 2017
As in many other countries, agricultural SMEs are specifically important in rural to urban transitions where they facilitate flexible diversification of income. They have proven to be also critical in transitions from state con-
trolled to market driven economies where flexibility to learn and change are fundamental characteristics.
Since they tend to be embedded in the local culture, agricultural SMEs enjoy closeness to customers and seasonal patterns.
Agricultural SMEs also play a unique part in reducing certain elements of poverty such as insecurity and powerlessness, social inequity, mass production drudgery, ecological or landscape uniformity and loss of cultural identity.
Policy makers can explore the
following SME advantages in 2017: ◆ Dimensions of well-being Economic social environmental basic survival.
Provide local outlets for inputs and outputs without externally imposed standards.
Strengthen connectedness to and responsibility for sustainability of production.
Negative environmental problems are local — more quickly spotted and dealt with.
◆ Livelihood security
Reduce outside dependency with greater local resilience in uncertain times.
Provide flexibility — flexible working hours are especially important for child carers.
Multi-functionality especially at a micro level builds environmental resilience. ◆ Affiliation and relationships Profits accrue locally, are often reinvested locally with local economic multipliers.
Greater social equity that humanises
- relationships in buying and selling — thus building community.
Shorter transport distances reduce pollution and human risk. ◆ Creative endeavour Distribute economic opportunities and returns fairly across multiple owners. Use local knowledge and skills — with ownership over business outcomes.
Increased options to use and consequent vested interest in conserving, the local resources.
◆ Aesthetic awareness Exploit local niches and maintain diversity in available products. Understanding of local tastes fosters craftsmanship.
Diverse enterprises at landscape level creates space for biodiversity. ◆ Cultural identity Locally accountable with less power to capture and corrupt power and policies.
Provision of culturally sensitive options — options to empower marginalised groups.
Local product or service design strengthens cultural landscapes. Opportunities for developing appropriate agricultural policies
The above merits associated with agricultural SMEs point to diverse models that can inform robust agricultural policies in Zimbabwe.
Currently, the diversity of SMEs makes generalised policy prescriptions unhelpful. Due to poor understand of the agricultural sector, support services and facilities intended for smallholder farmers and SMEs are ending up in the hands of large corporates that continue to control supply chains.
For instance, financial services such as the Zimbabwe Agricultural Development Trust (ZADT)’s Create Fund have been accessed by large agricultural companies instead of smallholder farmers and agricultural SMEs for who badly need them.
Generating evidence will ensure support for agricultural SMEs speaks to local reality. In some farming communities the local sense of community has been eroded by socio-economic challenges such that it takes time for local people to exploit existing opportunities.
There are opportunities in 2017 for policy makers to investigate and generate sound evidence on agricultural models that can secure greatest livelihood and environmental benefits for smallholder farmers and SMEs.
Rather than come up with one-sizefits-all policy prescriptions, policy makers should ensure agricultural interventions are highly nuanced to evolve incrementally over time.
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: charles@knowledgetransafrica.com ; Mobile: +263 774 430 309 / 772 137 717/ 712 737 430.