News reports & clippings
17 July 2017
Editor: Joseph Hanlon ( [email protected])
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With state support,
State support and good rains have led to a huge jump in maize production in Zimbabwe; 2.2 million tonnes of maize is expected to be marketed this year. This is a huge surplus, compared to demand of 1.5 mn t; in March all grain imports were banned. Of this production, more than half, 1.3 mn t, comes from land reform farmers.
This is a huge increase in production, even compared to previous good rainfall years, and the difference appears to be government support. The two previous years suffered very severe El Nino droughts, so it is not reasonable to compare to them. In the table (in the attached pdf version of this newsletter) we compare to 2011, a normal rainfall year which we used in our book Zimbabwe Takes Back its Land. In 2011, maize production was 1.4 mn t, just meeting local demand.
Communal land farmers had maize yields of 680 kg/ha, so are similar to Mozambique’s peasant farmers, and their 2017 production is expected to be 23% up on 2011. But the big gains have been from the family commercial farmers. The “A1” farmers, typically with 6 ha, increased production 46% on 2011, while the larger “A2” farmers, typically with 10-30 ha, increased production 126% – more than double 2011.
A key reason for the big jump was the “Command Agriculture” programme, aimed at supporting more productive family commercial farmers. Any farmer could sign up for the programme, organised through Agritex, the agricultural extension service. Government would provide on credit a package of inputs, including seed, fertilizer, and, if farmers needed, ploughing. For each hectare prepared, the farmer had to agree to sell 5 tonnes of maize to the Grain Marketing Board (GMB) at the agreed price of $390 per tonne, which would more than cover the cost of the inputs (which are deducted from the sales). Other production could be sold to the GMB or private traders.
Figures are all preliminary as the marketing period is not yet over. Estimates are that government spent more than $300 mn, of which at least $90 mn was for imported fertiliser, and more than 20,000 farmers were assisted. In the 2000 land reform, former white farms were split up, either into about 40 smaller farms with 6 arable hectares (A1 farmers), or into 5 larger farms with 50 ha or more of arable land (A2 farmers). The small A1 farmers have had some support from the Presidential Input scheme and the guaranteed market provided by the GMB, and have been able to slowly pull themselves up by their own bootstraps and become commercial. But the A2 farmers have lacked cash and credit and have been unable to invest in their larger areas, and they benefitted most from the new Command Agriculture scheme. The threshold of 5t/ha was important, because many farmers do not reach that level. But with correct use of fertiliser and seeds and proper weeding, many farmers reach 8-11 t/ha and thus felt confident to sign up to expand their area.
Command Agriculture is voluntary, but those who do sign up are monitored by the army, and there have already been convictions and jailings of people who improperly took inputs and then simply sold them.
Comment: risk sharing
In central Mozambique now, the price paid to producers of maize ranges from $75 to $150 per tonne, according to the Ministry of Agriculture and Food Security weekly market report. That is so low as to be unprofitable. A year ago, the producer price was double that – $150-$360 per tonne, enough to make maize commercially profitable. In Mozambique the family commercial farmer carries all the risk and so maize is not a commercial crop – the producer price is just too variable. In Zimbabwe government shares the risk, helping family farmers to produce a national maize surplus.
The starting point in Zimbabwe is the Grain Marketing Board (GMB) which guarantees to buy maize, this year at $390 per tonne. Input costs are $150-$200 per tonne, for fertilizer, seed, weeding, ploughing, etc. Thus the famer knows it is worth planting maize. By setting the price in advance, the GMB is accepting the risk. Over the past decade, import parity price has varied between $200 and $400 per tonne; this past season was also a good rainfall year in South Africa and the producer price of maize there is the lowest in years. So the GMB is paying significantly above the import parity price, and is selling maize at $242 per tonne to the millers of maize meal, to match import prices and keep the price of maize meal low – effectively a subsidy of $148 per tonne.
So the choice is clear – government has stimulated a huge maize surplus produced by family commercial farmers, but it has carried the risk and the cost this year could be $200-300 mn. In Mozambique where peasants carry the risk, they do not produce maize commercially and only sell a bit of surplus in good years. But Mozambique can import cheap maize from South Africa. This is a political choice – Zimbabwe wants to be self sufficient in food and support its peasant farmers, but Mozambique does not.
The other part of the package for Zimbabwe was fertilizer and other inputs supplied on credit. Again, the government carries some of the risk, for example if there had been a third drought year. But this year, farmers will earn more than enough to pay their debts.
So we know how to promote family farming: a guaranteed market at a reasonable price with inputs on credit and government sharing the risk with the peasants. jh