Why is Zimbabwe importing grain despite billions spent on the CAP?

By Farai Shawn Matiashe
Posted on Wednesday, 8 June 2022 13:18

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A farmer Boniface Mutize inspects his maize crop during an interview with Reuters at his farm in Domboshava, a village in the province of Mashonaland East outside Harare, Zimbabwe, March 21,2022. REUTERS/Philimon Bulawayo

In late May, Zimbabwe, which was once the breadbasket of Africa, announced it will import 400,000 metric tonnes (MT) of maize worth $100m from the neighbouring Zambia and Malawi amid grain shortages due to poor harvests and hoarding by farmers who are demanding to be paid in US dollars - this despite President Mnangagwa's Command Agriculture Programme. When did the basket go empty?

The imported maize is scheduled to be delivered by 30 June, according to the Grain Millers Association of Zimbabwe (GMAZ), a voluntary business organisation that represents the interests of local, large, medium and small scale grain millers in Zimbabwe.

Under then long-time ruler President Robert Mugabe, the government introduced the Command Agriculture Programme (CAP) in the 2016/2017 agricultural season, a scheme aimed at empowering local producers of cereal crops, particularly maize, so as to achieve national food security.

Emmerson Mnangagwa, who was Vice President at the time, was heavily involved in the CAP, an ideal plan for many, considering that during the previous agricultural season, Zimbabwe had experienced a food shortage, which forced the government to bring in about $200m in food imports.

Additionally, banks were reluctant to offer loans to farmers who did not have title deeds, but with CAP, the government provided loans and inputs to farmers who would reimburse the funds after harvesting and marketing their produce.

Zimbabwe’s unending food crisis

After investing billions of dollars in the CAP scheme, the country is still facing food shortages.

Zimbabwe has been facing a myriad of problems, including food insecurity, since taking over back its land from white farmers in 2001 during The Land Reform Programme (LRP).

Some white farmers who were chased away from Zimbabwe relocated to Zambia and South Africa where the country gets most of its food.

More than 5.2 million Zimbabweans, a third of the population, faced hunger between January and March 2022, when the harvest season began, according to the World Food Programme.

The Grain Marketing Board (GMB), Zimbabwe’s leading grain trade and marketing company has so far this year received about 5,000MT instead of the 30,000MT it had been projected to be harvested.

The GMB is paying local farmers in US dollars for 30% of the maize delivered and the other 70% in Zimbabwean dollars. This has forced some farmers to keep their stock and sell elsewhere as they are demanding to be paid in foreign currency.

The government has even deployed the military to confiscate grain from farmers.

Grain products, such as mealie-meal, are starting to disappear on shelves of some retail outlets while those that have them on display are charging exorbitant prices.

Even though this year, there were erratic rains in some parts of the country, analysts attribute the grain shortages to corruption, looting and poor financing of the CAP.

The funding model had weaknesses, for example non-repayment of loans by farmers, absence of a tracking database or system, massive looting by politicians and connected individuals…

John Bhasera, a permanent secretary in the ministry of lands, says people should not panic as the country is food secure on account of 1.8m MT of grain production this year, plus 500 000 MT reserves currently sitting in grain reserves.

“The Zimbabwean government is not importing any maize, we are amassing enough for our Strategic Grain Reserves (SGR) from the current harvest, plus carryover of 500 000 MT from last season,” he tells The Africa Report.

“We only opened borders for private millers who would like to import maize for their own industrial use. Remember the private millers are now compelled to produce at least 40% of their requirements locally, so those who failed to support local production will have to use their own free funds to import,” he says.

The Southern African nation requires 2.2m tonnes of maize annually with 1.8 million for human consumption, while the remaining tonnes are for stock feeds.

Victor Bhoroma, an economic analyst, says the government had good intentions when it introduced the CAP, but corruption and looting derailed the scheme.

“In terms of improving yield, [the] Command Agriculture Programme did help to marginally improve the yield from a low of 512,000MT in 2016 to 2,156,000MT in 2017 and  1,712,000MT in 2018,” he says. “However, the funding model had weaknesses, for example non-repayment of loans by farmers, absence of a tracking database or system, massive looting by politicians and connected individuals, an increase in deficit financing and growth in domestic debt.”

Bhoroma says production subsidies in agriculture or social safety nets for poor households are not entirely bad, but it is just that Zimbabwe’s programmes only have political objectives to win the electorate instead of sustainably improving crop yields and reducing poverty.

According to Paul Zakariya, an executive director at Zimbabwe Farmers Union, the food shortage is due to climate change.

“By comparison, the past two seasons are completely different from each other. In the 2020/21 season, we had adequate rainfall, which was evenly distributed and many areas produced excellent crops. The country managed to stock up its Strategic Grain Reserves. The 2021/22 season was the complete opposite of the previous season. Rainfall was very erratic and not well distributed. Most farming areas were affected and the yields did not come as anticipated,” he says.

Vince Musewe, a Harare based economist, says the money invested into agriculture versus the returns indicate a major problem.

“This points to bad productivity leakages through corruption and inefficient allocation and use of resources. The weather does play its part, but that is not the main reason for the lack of productivity in the sector. It appears this extortion is badly managed and never really meets targeted outputs,” he tells The Africa Report.

How CAP became a looting scheme for cartels

Tenders to spearhead the programme were given to individuals and corporates who were connected to some top government officials.

Mnangagwa’s business ally, Kudakwashe Tagwirei, bankrolled and supplied farming equipment, such as tractors, tractor-drawn ploughs, discs, mouldboard ploughs, leveller blades and reversible ploughs. This was done through his commodities and energy company Sakunda Holdings from 2016 to 2019.

The military was also heavily involved in the CAP as they organised the procurement of inputs and supervised their distribution to farmers.

“Inputs were initially provided by way of loans to the farmers with their debts being guaranteed by the State. However, there was a high default rate on the loans – 85% – so the State, as guarantor of the loans, has had to bear most of the cost of the programme,” says an economic paper by Veritas, a civic society that provides information on the work of the Parliament the laws and makes public domain information widely available.

According to the auditor-general, Mildred Chiri, the CAP was funded outside the national budget to amounts worth $3bn between 2015 and 2018.

A statement on public debt tabled in Parliament by Finance Minister Mthuli Ncube shows that Zimbabwe’s sovereign debt has been growing at an alarming rate and, as of September 2021, stood at $13,7bn.

According to Veritas, a significant portion of the debt was accumulated after 2015 when the government embarked on its CAP.

In the agricultural season 2020/2021, the government also spent millions of dollars to finance Pfumvudza, a conservation farming scheme targeting smallholder farmers who do not have mechanical equipment.

That same season, the government contracted a local bank, CBZ Holdings, which is owned by Tagwirei, to run the CAP.

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