Zimbabwe: The Tragedy of the Untilled Farms

Source from:  Financial Gazette (Harare) 13 December 2007 12/14/2007

ZIMBABWE'S preparations for a bumper harvest this year could turn out into another disaster, with indications that the majority of the country's new commercial farmers were not on the land despite taking up cheap loans under the central bank's concessional financing facility. Farming sector players said vast tracts of land across the country remained unprepared, despite a significant rainfall across the country and forecasts of favourable rainfall during the current farming season. Finance Minister Samuel Mumbengegwi, recently unveiled a $7 quadrillion budget whose performance he said hinged on a successful farming season, projecting gross domestic product growth of four percent "due to anticipated growth in the agricultural sector". Tobacco, horticulture, groundnuts, soya beans, sunflower and tea would contribute to this year's positive agricultural performance. "Government interventions for the coming season should see farmers benefit from improved access to a wide range of farm machinery and equipment and such inputs as fertilisers, seeds and chemicals, now in place for the 2007/2008 farming season," Mumbengegwi said. The central bank has unveiled a number of measures, which include cheap financing through the Agricultural Sector Productivity Enhancement Facility (ASPEF), and payments in foreign currency for maize and other key commodities, to boost agricultural performance this year. Banking on forecasts of a favourable rainy season, Reserve Bank of Zimbabwe governor Gideon Gono, who has complemented the financial packages with the distribution of high tech farming machinery and implements, has dubbed the current farming season the "mother of all agricultural seasons". Gono has financed the procurement of 2 500 tractors, over 70 combine harvesters, and hundreds of other farming implements and machinery through a concessionary loan facility to commercial farmers. Over 70 000 ox-drawn farm implements were also availed to communal farmers. But the farming season could turn out into a phenomenal disaster, with analysts saying most of the new breed of commercial farmers was interested in quick cash and not prepared to sweat it out tilling the land. Communal farmers were battling to ensure they had enough harvests to meet family consumption needs, with those that had received cheap diesel for farming purposes said to have sold most of it to public transport operators. Trillions of dollars have been splurged by the central bank through ASPEF, but bankers fear the bulk of that money has been diverted to speculative activities for quick returns. But most recipients of the cheap money were pumping the cash into the stock market, feeding into a bull run that has overheated stocks and taken the equities market to unprecedented record highs. ASPEF borrowing comes at a concessionary interest rate of 25 percent per annum, against punitive interest rates of over 1 000 percent for general and consumptive borrowing from the banking sector. To speed up the application process, Gono had intervened to stop what he described as "mischievous bureaucracy" in the disbursement of ASPEF funds through the banking system, directing banks handling the special funding facility to decentralise decision making to branches. In his monetary policy statement delivered in October, Gono said there was growing confidence among new farmers on the back of increased support and mechanisation initiatives by the central bank. "Building on this positive trend of confidence, we are dubbing the coming season the 'Mother of All Agricultural Seasons', as it is high time that Zimbabwe once again regained its apex status as the bread basket of the sub-region," Gono said. He hoped, then, that with the cheap ASPEF funding, whose rate had been reduced from 50 percent per annum, the new farmers would "take full advantage of this review and put every inch of arable land into productive use". Amazingly, the old farms could now pass for vast tracts of forestland, untilled and waiting for the farmers to dig them up with the new implements. The tractors are now public transport in other areas, and the combine harvesters are parked at farmhouses as status symbols. The farmers are in the cities, busy monitoring the movement of stocks bought using ASPEF money. They are looking for their own kind of harvest. Enditem