Focus on Zimbabwe

by Chris Lyddon
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Agriculture is vitally important to Zimbabwe and the country has been a major producer of grains and other farm products in the past. However, economic problems, a land reform program which has caused disruption, and the weather have combined to leave the country needing to import.

The staple crop in Zimbabwe is corn (maize). The International Grains Council (IGC) puts Zimbabwe’s 2013-14 corn production at an unchanged 1 million tonnes. Stocks are maintained by the Grain Marketing Board (GMB), which was established in 1931 as the Maize Control Board and is a wholly state-owned enterprise with a network of depots.

The GMB trades cereals and oilseeds and provides logistics services to the agricultural industry as well as processing. Its objective is to ensure food security.

“Corn production in 2013 is expected to remain stagnant, at below average level, and despite relatively stable prices the production shortfalls are anticipated to result in stressed food security conditions, particularly in southern parts,” the Food and Agriculture Organization (FAO) said in a recent Crop Prospects and Food Situation report.

At the start of July, the Herald newspaper in Harare reported that the GMB had started receiving corn from farmers, although the volumes are low.

“The GMB public relations office confirmed that farmers had started delivering corn but the volumes had declined when compared with the corresponding period last year,” it said. “The office, however, could not give figures of the delivered corn. The decline in volumes of corn delivered to the GMB has been attributed to drought and the poor payment system by the GMB. This season GMB is paying $310 per tonne, a price many farmers feel should be increased.

“Most farmers wanted a producer price of $400 per tonne for them to break even with production costs of $1,055 per hectare. According to the latest Zimbabwe Farmers Union weekly market guide, private buyers were offering prices between $300 and $350 per tonne.”

Shrinking wheat crop

Wheat production in Zimbabwe is small and way below the level of consumption. The most recent annual report on the country’s grain sector from the U.S. Department of Agriculture (USDA) attaché in Pretoria puts the 2012-13 wheat crop at 20,000 tonnes from 10,000 hectares.

The report explained last year’s problems with the crop.

“Wheat is planted between April and mid-May under irrigation, but this year Zimbabwe’s recommended winter wheat planting deadline of May 15 passed with very little wheat planting activity on the ground,” it said, referring to the 2012 planting. “The Ministry of Agriculture had planned to provide farmers with $20 million worth of input loans for seeds and fertilizers to produce 75,000 tonnes of wheat from a target area of 26,280 hectares in 2012. Inputs were to be distributed at cost price through GMB depots.

“However, local fertilizer companies did not release fertilizers targeted for the $20 million wheat support program, due to the government’s failure to settle a $50 million debt dating back several seasons. Hence, the majority of farmers, who traditionally rely on government inputs support to produce wheat, failed to plant the crop.”

Wheat production has been on a declining trend since 2001, when Zimbabwe produced more than 300,000 tonnes, the attaché explained.

“A number of constraints, such as unreliable power supplies for irrigating the crop, dilapidated irrigation infrastructure, and late payments by the GMB, have contributed to the declining trend in wheat production.” At the time the GMB still owed money to the majority of growers for unpaid wheat deliveries made in October 2011.

The attaché estimated Zimbabwe’s wheat consumption at 270,000 tonnes a year.

“Bread is an important food source, particularly in the urban areas,” the report said.

The Herald, reporting in July on a proposal to reintroduce duty on wheat flour, quoted millers as saying it would not lead to flour shortages.

Grain Millers’ Association of Zimbabwe Chairman Tafadzwa Musarara said that Zimbabwean millers have up to a six-month supply of wheat grain in stock. The paper explained that Zimbabwe usually imports grain, rather than flour, with the local millers doing the milling.

“A small amount of flour is sometimes imported, but not usually for the baking industry,” it said.

“Zimbabwe has been growing wheat since the mid-1960s when UDI sanctions started cutting imports but has never come close to self-sufficiency,” it explained. “Since Zimbabwean wheat has to be grown under irrigation it tends to be more expensive than imported wheat, with the costs of irrigation being higher than the transport costs of bringing in imports.”

Musarara said the industry is hampered by overcapacity. “Our local industry milling capacity is 65,000 tonnes per month against a national requirement of 25,000 tonnes per month,” he said.

He added that in the event that local millers fail to cope with demand, the duty can still be reviewed. He did express concern about the threat to the milling industry from unrestricted flour imports, particularly given that Zimbabwe uses the U.S. dollar.

“Zimbabwe is using one of the strongest currencies in the world and as such it has attracted many flour suppliers around the world who are selling the product to us at cost or below cost just in order to get the dollar,” he said. “Many of these suppliers are given export incentives by their respective governments of up to 20% and can therefore afford to export to Zimbabwe at a loss.”

Farming failure

Attempts to reform land ownership have been controversial, according to a report carried at the start of July by the News Day newspaper. GMB General Manager Albert Mandizha said that beneficiaries of Zimbabwe African National Union – Patriotic Front’s (Zanu PF) land reform program have failed to feed the country and are a big national disappointment. Zanu PF has been the ruling party in Zimbabwe since 1980.

“Zimbabwe has traditionally been a net exporter of grain, but look right now, we are actually importing corn from Zambia,” he said, while officiating at a farmers’ prize-giving ceremony organized by a local seed house. “I am ashamed of Zimbabwean farmers. You are an embarrassment because you have forced us to import grain. You have embarrassed everyone.”

He complained that farmers had harvested enough grain to fill just 21% of GMB’s 4.5-million-tonne silo capacity. The farmers countered with complaints about the low producer price paid by GMB and they accused the state-owned body of paying late for deliveries.

Mandizha said it was the prerogative of the government to set the corn producer price while his company merely abides by the state gazette-prices.

However, to date, 98% of farmers who delivered their corn to GMB had been paid, while 96% of wheat farmers had so far been paid for deliveries.

GM dilemma

Zimbabwe has resisted importing GM corn, but as News Day reported in April, it creates a dilemma for a country short of the grain.

“Most of the corn grown in neighboring South Africa — which is the largest corn producer in the region, and which usually has a surplus to export — is GM,” the paper explained. “Though South Africa can provide certified GM-free corn, it is more expensive than the corn produced in Malawi or Zambia, all of which is GM-free.”

The problem was that Zambia, the usual source of supply during shortages, had placed restrictions on exports.

“Zimbabwe allows a maximum of 0.01% trace of GM material in its maize imports,” it said. “Both the Grain Millers Association and SMA have appealed to the government to temporarily revise this threshold to 2%.”

Chris Lyddon is World Grain’s European editor. He may be contacted at:

Key Facts

Capital: Harare

Population: 13,182,908 (July 2013 est.)

Religions: Syncretic (part Christian, part indigenous beliefs) 50%, Christian 25%, indigenous beliefs 24%, Muslim and other 1%.

Location: Southern Africa, between South Africa and Zambia.

Government: Parliamentary democracy. Chief of state: Executive President Robert Gabriel Mugabe (since Dec. 31, 1987); head of government: Prime Minister Morgan Tsvangirai (since Feb. 11, 2009).

Economy: Zimbabwe’s economy is growing despite continuing political uncertainty. Following a decade of contraction from 1998 to 2008, Zimbabwe’s economy recorded real growth of more than 9% per year in 2010-11, before slowing to 5% in 2012, due in part to a poor harvest and low diamond revenues. However, the government of Zimbabwe still faces a number of difficult economic problems, including infrastructure and regulatory deficiencies, ongoing indigenization pressure, policy uncertainty, a large external debt burden, and insufficient formal employment. Zimbabwe’s 1998-2002 involvement in the war in the Democratic Republic of the Congo drained hundreds of millions of dollars from the economy. The government’s subsequent land reform program, characterized by chaos and violence, badly damaged the commercial farming sector, the traditional source of exports and foreign exchange and the provider of 400,000 jobs, turning Zimbabwe into a net importer of food products. Until early 2009, the Reserve Bank of Zimbabwe routinely printed money to fund the budget deficit, causing hyperinflation. Dollarization in early 2009 — which allowed currencies such as the Botswana pula, the South Africa rand, and the U.S. dollar to be used locally — ended hyperinflation and reduced inflation to about 10%, but exposed structural weaknesses that continue to inhibit broad-based growth.

GDP per capita: $600 (2012 est.); inflation: 8.2% (2012 est.); unemployment: 95% (2009 est.) figures reflect underemployment; true unemployment is unknown and, under current economic conditions, unknowable.

Currency: Zimbabwean dollar (ZWD): Zimbabwean dollars per U.S. dollar -234.25 (2010); the dollar was adopted as a legal currency in 2009; since then the Zimbabwean dollar has experienced hyperinflation and is essentially worthless.

Exports: $3.314 billion (2012 est.): platinum, cotton, tobacco, gold, ferroalloys, textiles/clothing.

Imports: $4.569 billion (2012 est.): machinery and transport equipment, other manufactures, chemicals, fuels, food products.

Major crops/agricultural products: Corn, cotton, tobacco, wheat, coffee, sugarcane, peanuts; sheep, goats, pigs.

Agriculture: 20.3% of GDP and 66% of the labor force.

Internet: Code: .zw; 30,615 million (2012) hosts and 1.423 million (2009) users.
Source: CIA World Factbook