Agriculture is an important sector of the Zimbabwean economy. At independence, land ownership was highly skewed, as the sector was dominated by a few commercial farms. The initial phases of land reform, along with liberalization of the agricultural sector throughout the 1990s, helped to increase Zimbabwe’s agricultural productivity, but these gains have been reversed over the past few years. After the bumper crop season of 1999/2000, yields have plummeted, owing to droughts and the disruption of commercial farming under the Fast-Track Land Reform Program. The future of the sector is largely dependent on the success of resettled farmers, which requires better weather conditions, the availability of inputs and capital, and a stable economic environment. Preliminary data for the 2002/03 crop season indicate that, for many of Zimbabwe’s main crops, production continues to be low.

Abstract

Agriculture is an important sector of the Zimbabwean economy. At independence, land ownership was highly skewed, as the sector was dominated by a few commercial farms. The initial phases of land reform, along with liberalization of the agricultural sector throughout the 1990s, helped to increase Zimbabwe’s agricultural productivity, but these gains have been reversed over the past few years. After the bumper crop season of 1999/2000, yields have plummeted, owing to droughts and the disruption of commercial farming under the Fast-Track Land Reform Program. The future of the sector is largely dependent on the success of resettled farmers, which requires better weather conditions, the availability of inputs and capital, and a stable economic environment. Preliminary data for the 2002/03 crop season indicate that, for many of Zimbabwe’s main crops, production continues to be low.

II. Developments in Agriculture and Impact of Land Reform9

A. Agricultural Production

28. Agriculture is the driving force of the Zimbabwean economy. It has historically comprised a share of about 15 percent of total output, and has very strong linkages to the manufacturing sector.10 Agricultural exports total US$800–900 million per year and represent 35–50 percent of total exports.11 Crops (primarily tobacco, maize, and cotton) account for about 80 percent of agricultural production, while the remaining 20 percent comes from livestock.

29. Agrarian land is divided into communal farms, which engage mostly in small-scale farming,12 and commercial farms, on which cash crops are grown. Yields have historically been significantly higher on commercial farms, which mostly utilize prime farmland and have better access to irrigation and necessary inputs, such as seeds and fertilizer. Commercial farms concentrate primarily on export crops, such as tobacco, cotton, sugar, and horticulture, but also produce significant quantities of maize and wheat. Communal farms often utilize more marginal soils and grow a variety of crops, such as maize, cotton, groundnuts, sorghum, and sunflower seeds. The “summer” crops are harvested in April-May, while “winter” crops, such as wheat, are harvested in September-October.13

30. Once considered the breadbasket of Southern Africa, Zimbabwe’s agricultural output was severely affected over the past two years by droughts and by the land reform program, which led to a destruction of agricultural infrastructure and a shortage of fertilizers, seeds, and other intermediate inputs. All of these factors have reduced yields and contributed to a severe food shortage. Since its record-breaking 1999/2000 crop, the sector’s output has declined by almost one-third to its lowest levels since the drought year of 1991/92 and the low harvests recorded in the late 1980s (see figure). In 2001/02 alone, the output is estimated to have declined by 22 percent. This decline contributed to decreased activity in the rest of the economy in 2002: manufacturing production declined by over 15 percent, while agricultural exports were 11 percent lower than in the previous year (in U.S. dollar terms) and one-fifth lower than in 1996.

A02ufig01

Agricultural Production, 1984/85-2001/02 1/

(In millions of Zimbabwe dollars at constant 1990 prices)

Citation: IMF Staff Country Reports 2003, 225; 10.5089/9781451841480.002.A002

1/ Crop years; approximately April-March.

31. The production of maize, Zimbabwe’s most important staple crop, declined by three-fourths over the past two years, after a record crop of over 2 million tons in 1999/2000 (Table II.1). This decline was mostly due to a drought-related fall in yields and some reduction in the area planted. Communal farms producing the bulk of the maize crop typically do not have irrigation facilities and yields on small-scale farms were one-fourth of commercial yields in 2000. This ratio fell to 1:15 in 2002, reflecting the comparative advantage of irrigation. The total area planted fell by 75 percent on commercial farms during 1999/2000–2001/02, while increasing somewhat in small farms in the context of the land reform.

Table II.1.

Maize Production, 1995–2001/02

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Sources: Zimbabwean authorities; Commercial Farmers Union; and staff estimates.

32. Zimbabwe is one of the world’s top three producers of flue-cured, or Virginia, tobacco, which is known for its high quality and flavor.14 Owing to its high cost, the curing of tobacco is done primarily on commercial farms, whereas the small-scale farms usually produce lower-quality burley tobacco, which fetches about half the price of Virginia tobacco on world markets. The tobacco cycle lasts up to 18 months, as field preparations begin in March, seeding is begun in September, and harvesting and curing are done from November to April. The previous year’s crop is sold through auctions held from April to August15 and exported throughout the year. The long production process makes prefinancing necessary, an input to production which is often difficult for tobacco growers to obtain.

33. The production of tobacco traditionally accounted for 70 percent of Zimbabwe’s agricultural exports. Following a record crop of 245 million kilograms in 1999/2000, its production declined by 30 percent over the past two years, due almost entirely to lower commercial production related to the land reform (Table II.2). Tobacco yields on commercial farms, however, remained almost three times that on small farms.

Table II.2.

Tobacco Production, 1995–2001/02

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Sources: Zimbabwean authorities; Zimbabwe Tobacco Association; Commercial Farmers Union; and staff estimates.

34. Cotton production, which accounts for 5 percent of total exports, decreased by 46 percent over the past two years, despite the liberalization of the sector and the crop’s relative resistance to drought. Cotton is mainly produced by smallholders, although commercial farms play an important role in production process, as they are the sole growers of cotton embryo and foundation crop—essential inputs for the production of cotton in small-scale farms. These two early stages of cottonseed production require high standards and have a direct impact on the quality of the cotton produced. Commercial planting, in which yields dropped by 20 percent but were five times those of communal lands, was reduced by 80 percent; the contribution of commercial farms to national production decreased from 20 percent to about 5 percent. In contrast, the area planted increased by over 50 percent in smaller farms, but this was more than offset by a drop in communal yields of almost 60 percent, reflecting the drought and the lack of high-quality cotton embryo and foundation crop from commercial farms (Table II.3).

Table II.3.

Cotton Production, 1995–2001/02

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Sources: Zimbabwean authorities; Commercial Farmers Union; and staff estimates.

35. Drought and food shortages have caused a decline in other small-scale agricultural production, as many farmers have moved from alternative crops to the planting of maize. Most crops grown on small-scale farms have suffered a large drop in production, associated with the drought as well as this substitution effect. Less farmland is being devoted to other traditional crops, such as sorghum and groundnuts. The food shortage and the HIV/AIDS pandemic have exacerbated this decline in production by lowering the nutrition levels and health of farmers.16

36. The production of other commercial crops has also been partly disrupted by the land reform. Soybeans, coffee, and wheat production has all fallen below their historical levels (Table II. 4). Horticulture production fell by over 20 percent in 2001/02 from the previous year, as export contracts were disrupted.17 In contrast, sugarcane production remained high, as sugar farms were less affected by the land reform, and this crop benefited from a continued access to preferential markets in the European Union.

Table II.4.

Production of Other Crops, 1995–2001/02

(In thousands of tons)

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Sources: Zimbabwean authorities; Commercial Farmers Union; and staff estimates.

37. Livestock is an important source of income for Zimbabwean farmers, as the animals are used for subsistence in communal areas and raised for exports on commercial farms. The national herd comprised over 5 million head of cattle in 2000, of which almost 4 million were owned by small-scale farmers; the commercial herd is marketed domestically and exported. Commercial beef accounted for about 5 percent of agricultural exports and have benefited from certification from the EU. Recent press reports, however, suggest that the size of the total herd has dropped to below 4 million head, and that of the commercial herd from 1.3 million head to under 200,000. Several factors contributed to the decline in livestock, including starvation owing to drought and lack of fodder, destocking by evicted farmers, and an outbreak of foot-and-mouth disease.18 The drought in the last two years, especially in the south and west of the country, has almost completely eroded grazing in these areas; the shortfall in the availability of feedstock has added to this problem. Indications are that commercial farmers who feared that their cattle could be seized without compensation resorted to the slaughter of their herds to avoid the loss. This loss of cattle has severe implications for exports as it has reduced sharply the potential of the beef industry.

B. Land Reform

38. At independence, Zimbabwe inherited a highly skewed land ownership pattern, in which large-scale (white) commercial farmers, who represented less than 1 percent of the population, occupied 45 percent of all agricultural land. In contrast, the majority of the indigenous population engaged in subsistence farming on over 16 million hectares of mostly poor-quality communal land. Given their scale of operations and the fact that most of the commercially farmed land was concentrated in high-rainfall areas, it was natural for commercial farms to continue to account for a sizable share of agricultural production and export receipts after independence. However, the government claimed that a significant proportion of this land was not being routinely utilized.

39. Land redistribution was seen by the government as an integral and central component of a much broader agrarian reform program that it sought to implement, and whose goal was to improve the economic situation of the farming community in general. The specific areas targeted by the government as crucial to achieve this goal include the provision of better access to markets, credit, and training, as well as easier access to social, developmental, and economic infrastructure. It follows that the success of the government’s recent land redistribution program hinges critically upon its making arrangements for the transfer of capital and infrastructural, financial, and marketing facilities to new farmers, and not merely upon the transfer of ownership of the land.

40. The land redistribution process began immediately following independence in 1980, with the resettlement of close to 36,000 families on 2.1 million hectares of land acquired by the government at end-1984. Despite the establishment of a National Land Policy in 1992 to facilitate the acquisition process, the process slowed considerably—from 1984 to 1997,1.4 million hectares were acquired, and an additional 35,000 families resettled. Under this scheme, large-scale commercial farmland was to be reduced to 6 million hectares from 15.5 million hectares at independence, and the acquired land be redistributed to new settlers (8.3 million hectares) or classified as state land (1.2 million hectares). According to the government, the objectives of this program were to reduce the extent and intensity of poverty among rural families and farm workers through the provision of arable land, to increase the contribution of agriculture to GDP and exports, and to develop small-scale farms into viable commercial enterprises. The first phase benefited considerably from the funding received from the international community, including the European Community, the African Development Bank, the government of Kuwait, and, particularly, the U.K. government, which funded the land acquisition process.

41. According to government sources, this initial phase of resettlement was successful through 1998 in achieving the goal of raising the economic welfare of the resettled households, and exceeded the expected rates of return. Real increases in household income, improvements in land resulting from investment, and diversification in the range of crops grown were reported. Government estimates put the average internal rate of return on resettled land at 21 percent, significantly higher than the 14 percent expected at the planning stage.

42. The government then enhanced the pace and scope of land redistribution to promote the broader goals of agrarian reform, particularly poverty alleviation and social stability. Accordingly, a more proactive stance was adopted in 1997, with the listing of 1,471 commercial farms for acquisition. This prompted an outcry and led to the holding of an international donors’ conference in Harare in September 1998. At the conference, an agreement was reached in principle for the acquisition of 5 million hectares with donor support. No disbursements were made by donors, however, as agreement was not reached on the detailed modalities for the plan’s implementation. Subsequently, the Zimbabwean government launched, in mid-2000, a Fast-Track Development Program (covering 5 million hectares and 150,000 families) which, in donors’ views, disregarded the principles agreed to in 1998 and the United Nations Development Program (UNDP) proposals of December 2000. There have also been informal farm invasions regardless of the legal status of these farms under the official land reform program.

43. In September 2001, Zimbabwe agreed, at two regional meetings—the Committee of Commonwealth Foreign Ministers in Abuja and the Summit of the Southern African Development Community Task Force in Harare—to restore the rule of law to the land reform process and pursue an effective and sustainable land policy. In December 2001, the government brought almost all the remaining commercial farms into the acquisition list of the land reform process by introducing a limit on farm size of 250–2,000 hectares, depending on the location, for farms not covered by the fast-track program (Table II.5). Although the government stated that it would compensate farmers for capital improvements (but not for land), it has yet to do so on any significant scale.

Table II.5.

Zimbabwe Land Ownership by Sector, September 2001

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Source: Commercial Farmers Union (CFU).

44. The government has used its legislative powers to validate its land reform program. In November 2001, President Mugabe amended the Land Acquisition Act, giving the government the right to take immediate ownership of targeted farms and thereby undermining the role of due process. Parliament approved the amendments on May 8, 2002, and the government announced that work on these farms should be suspended immediately, issuing eviction orders that gave the owners up to three months to vacate their properties and setting August 8, 2002 as a deadline for compulsory acquisition.

45. The government has ignored or changed several court rulings that tested the legality of the government’s land reform program. In December 2000, the Supreme Court declared the government’s fast-track land reform unconstitutional and inconsistent with the government’s own policies; it also asked the government to remove illegal occupants and restore the rule of law on the farms. After several judges were replaced, the Supreme Court overturned the ruling in December 2001 and stated that the process was consistent with the current laws. In August 2002, a High Court judge ruled that eviction orders issued by the government were not valid because the banks holding mortgage titles to the farms were not notified by the government. In response, the government amended the Land Acquisition Act in September 2002, validating the eviction orders and substantially increasing the penalties for noncompliance. Parliament approved the amendments on September 18, 2002, and the government reissued eviction notices giving farmers seven days to vacate the land.

46. The government declared the Fast-Track Program complete as of August 2002. However, new eviction notices being sent to remaining white farmers continue to be reported. As of early 2003, the majority of farmers seemingly complied with the eviction orders, in light of some violent incidents, including the enforcement of eviction by armed militias. The government has reiterated its intention to resettle all 11.4 million hectares of farm land that it has acquired. It recognizes that the new farmers will need substantial assistance; the budget for 2003 has allocated Z$29 billion (1.4 percent of GDP) for agricultural support, but this is likely to be insufficient.

47. A number of reports raise doubts about whether and how quickly the fast-track land reform will translate into fulfillment of the broader goals of agrarian reform and development that it was intended to facilitate. There is usually a time lag between the acquisition of land and its subsequent resettlement. Historically, these lags have been quite significant in Zimbabwe, and there is some evidence that this may be a problem with the recently acquired land. The Minister of Land, Agriculture, and Rural Resettlement announced that the government’s target was to resettle about 300,000 families under the Al model (for smallholders) and about 51,000 families under the A2 scheme (for new commercial farms). The Zimbabwe Farmers Union (ZFU) reported as early as 2003 that about 200,000 house-holds have been resettled under the Al scheme and 15,000–20,000 farms have been resettled under the A2 scheme. Tenure security, an integral component of the resettlement process, has yet to be guaranteed, even on land already resettled; the government has not offered title deeds to the resettled farmers, but instead 99-year leases have been offered to the farmers. In the absence of collateral, and in the current economic environment, banks are not eager to lend to farmers who may lack technical expertise and whose savings are exhausted due to the poor harvest.

48. The land redistribution program needs to be accompanied by arrangements for the speedy and efficient transfer to the new farmers of human or physical capital that is necessary for maintaining agricultural production. To alleviate this problem, the Ministry of Agriculture recently attempted to purchase or lease equipment from displaced commercial farmers through the Commercial Farmers’ Union (CFU); however, it accompanied this request with a set of demands reportedly unacceptable to the CFU.

49. Commercial farms were a major source of formal rural employment, as about 350,000 farm workers, together with their families and dependents, constituted a total population of 1–2 million. An initial field study under the Minister of State for Land Reform reportedly found the situation on the ground to be far from satisfactory, with many farm workers unemployed and without severance pay. The UNDP has proposed that the government undertake a technically sound and comprehensive survey of the current situation, as the initial audit was based on sample field visits. While the government agreed to such a survey in principle, the start date has been postponed repeatedly.

50. Very little investment has been made in farm machinery within the last two years, owing to the uncertainty prevailing among commercial farmers regarding their future prospects and the lack of financing for new farmers to buy equipment. For example, in the last quarter of 2002, a mere 8 tractors were sold, compared with an average of 1,600 per year prior to 1997. Irrigation schemes have fared similarly. There have been numerous reports of theft and vandalism during the fast-track land resettlement process, while evicted farmers have sought to remove mobile machinery and irrigation equipment to the extent possible.

51. In light of reports about irregularities in the implementation of the fast-track land reform, the government initiated—in April 2003—a new audit of the land reform, to be headed by former Chief Cabinet Secretary Utete. The audit is to determine whether people who have been allocated land have actually taken up their plots, whether the land is actually being farmed, and what is required to make the land more productive. In March 2003, the UNDP proposed a joint government-UN survey, as a necessary comprehensive agricultural survey is a first step toward identifying long-term strategies to increase Zimbabwe’s agricultural production, but the government has not accepted this proposal.

C. Prospects for Agricultural Production in 2002/03

52. Prospects for future production of maize are largely dependent on the weather and the success of the new farmers. The developments discussed above, combined with a lack of seed stock, fertilizers, and know-how among resettled farmers and the displacement of farm workers, disrupted planting activity in late 2002. To compensate for a decrease in the local production of seed maize, which was severely disrupted by the land reform process, the government imported 15,000 tons of seed maize from South Africa, although very late in the planting season. In light of shortages of fuel and equipment, as well as the drought conditions in early 2003, the 2002/03 crop is expected to be only slightly better than that of 2001/02 and much below the historical norm. To encourage production, the government announced in April 2003 an increase of 365 percent in the producer price of maize, from Z$28,000 to Z$130,000 per ton, while keeping the retail price at Z$9,600 per ton.

53. Agriculture was also affected by the general shortage of fuel and foreign exchange, and the drought resulted in a shortage of locally produced feedstock, with a serious negative impact on livestock production. The main companies involved in fertilizer manufacture continue to operate at well below normal capacity, reflecting a shortage of foreign exchange to import raw materials and the inability of the National Railways of Zimbabwe (NRZ) to move goods into or within Zimbabwe in a timely fashion. This led to the buildup of a considerable backlog of orders from commercial farmers, already reduced in size, during the 2002/03 planting season.

54. Zimbabwe’s traditionally high-quality commercial tobacco crop is expected to deteriorate at least in the short term and Zimbabwe risks losing its large world market share to its competitors. The decline in expertise has led to a pronounced drop in the quality of the tobacco produced; in turn, the tobacco fetches a significantly smaller return in the world market. This situation exacerbates the existing shortages of foreign exchange, fuel, and electricity, which in turn hinder tobacco production and curing. Because of the lag between the growing cycle and the tobacco auctions, the full impact on exports is not expected to occur until 2003/04.

55. Conflicting reports about the size of the 2002/03 crop output may further endanger the food security situation in 2003/04. In late February, the Famine Early Warning System (FEWS NET) projected a production of about 800,000 tons of cereal for the current crop season, which would imply an unfilled cereal gap of close to 1 million tons.19 However, a more recent report is projecting a production of over 1.5 million tons of maize and wheat, an amount that would reduce the gap to under 300,000 tons.20 According to this report, which has generated confusion and has been met with skepticism, the unexpected heavier-than-normal rainfall in March 2003 has caused cereal production estimates for the season to be revised significantly upwards (Table II.6). The World Food Program and the UN Food and Agriculture Organization are assessing the food supply, the size of domestic harvest, and the availability of seed and fertilizer vis-à-vis human consumption requirements. Also, the government’s official crop forecasts have not yet been completed.

Table II.6.

Agricultural Production Forecast, 2002/03

(In thousands of tons)

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Sources: Zimbabwean authorities; and the Famine Early Warning System.
9

Prepared by Gustavo Bagattini and Jay Surti.

10

Manufacturing accounts for about 20 percent of total output. The agricultural sector is linked to about 60 percent of manufacturing production through, for example, the food processing, milling, beverage, and textile industries.

11

From 1995–99, agricultural exports averaged US$834 million and represented 38 percent of total exports.

12

Many communal farms partly rely on income from family members working elsewhere.

13

The April-May 2003 harvest thus reflects agricultural production in the 2002/03 crop year.

14

Zimbabwe traditionally accounted for 20 percent of total world exports of flue-cured Virginia tobacco. Its main competitors are Brazil (about 29 percent of world exports) and the United States.

15

Auctions may last into September and October in years of high tobacco production.

16

A further discussion of this can be found under Economic Impact of HIV/AIDS in Zimbabwe.

17

Export licenses were held by individual farmers, not by their estates.

18

This was related to the movement of cattle owing to resettlement. There are indications of a need to vaccinate increased number of cattle in sensitive areas; this would require some US$15–20 million in foreign exchange over the next two years.

19

FEWS NET, Zimbabwe Monthly Report (February 27, 2003), published March 26, 2003.

20

FEWS NET, Zimbabwe Monthly Report (March 31, 2003), published April 9, 2003.

Zimbabwe: Selected Issues and Statistical Appendix
Author: International Monetary Fund