SESSION TWO: ECONOMIC AND SOCIAL IMPLICATIONS OF LAND DESIGNATION

An economic analysis of the impact of land acquisition on agricultural production and the whole economy

THE LAND REFORM ISSUE: SOCIAL AND ECONOMIC CHALLENGES
Dr J. L Grant - CFU

THE LAND REFORM ISSUE: SOCIAL AND ECONOMIC CHALLENGES
Dr J. L Grant - CFU

[page number of print ed.: 51]

Distinguished Guests, Ladies and Gentlemen, let me first state that land reform is a very necessary aspect of development in Zimbabwe. This has long been accepted by the CFU.

However, we believe most strongly that reform must encompass more than a simple transfer of freehold titled land to state land for resettlement purposes. Continuation of this process will lead to degradation of the land resources in this country and rather than alleviate poverty, for which the program is designed, it will condemn settlers to a life of permanent poverty with little prospects for the future. It will also result in rapid degradation of relatively undegraded land and accelerate the process of desertification. This program is simply not sustainable. Land reform must therefore address all aspects of resource use in Zimbabwe. This includes:

1. The facility to sub-divide (consolidate when necessary) farm land.
2. The question of security of tenure in resettled areas as well as the aspect of training, the development of the necessary infrastructure, the extension for successful production
3. Most importantly, the problems of land use systems in the communal areas as well as
   the issue of security of tenure, as recommended by the Land Tenure Commission Report of 1994.

We believe that the lack of security of tenure is the single most important factor in inhibiting development in the communal areas.

The current holdings of land by various sectors is given in Table 1 and large scale commercial production over the last 5 years in Table 2 and Figure 1 while the value, in nominal and real terms, of production in this sector is given in Figure 2.

The contribution of the large scale commercial sector to GDP and the economy in general, cannot be over emphasized. This sector accounts for about 80% of marketed agricultural production, about 90% of exported agricultural production and employs about 320 000 workers. Because of the linkages, both upstream and downstream, any issues that affect commercial production have a ripple effect throughout the economy.

One of the most important effects of the gazetting, on 28/11/97 of 1 472 properties identified as suitable for acquisition by Government for the resettlement process, has been the destruction of any confidence within the industry. This has put all development projects on hold and had a serious impact on agricultural suppliers who would normally expect to be doing good trade at this time. We believe that the damage has gone further in reducing investor confidence in our country as a whole and in weakening the value of the Zimbabwe dollar.

Figure 3 gives an estimate of the reduction in production of strategic crops within the large scale commercial sector and Figure 4 illustrates the effect on exports of agricultural products.

These estimates are based on the fact that some 700 of these properties were identified for commercial resettlement and therefore no reduction in production is given, while productivity of the remaining sectors is estimated from official figures of production levels from resettled areas. It is accepted that the productivity of the small scale sector, given the correct

[page number of print ed.: 52]

environment, can be very high and we are not suggesting that small scale farmers are any less efficient or productive than large scale farmers but, under current resettlement models, we believe the estimates are accurate.

THE WAY FORWARD

We believe that the availability of land is not the issue and that the current round of gazetting of identified properties was largely for political purposes. We are aware that millions of hectares have been offered to Government on the right of first refusal, under the Land Acquisition Act of 1992, which have not been taken up, largely because of lack of resources to do so. We are aware that Government currently holds somewhere between 300 000 and 400 000 hectares of former commercial farm land which is currently either leased to weekend farmers or, in some cases, leased back to the farm owners, but has not been resettled. We are also confident that we can identify some 1.5 million hectares of further land for Government to acquire for the resettlement process without issuing compulsory notices of acquisition, which would require confirmation in the Administrative Court.

We have offered a program to Government based on these criteriae in which we are prepared to get involved in identifying the land; with the sourcing of the resources externally to acquire land; with the implementation of the resettlement programs and to become involved with the training, extension and marketing of farmers and their products from these areas. We believe that such a process should be handled through a Rural Land Board of competent people on which we are prepared to serve and that all resettlement currently undertaken should be revisited to bring it into the fully productive capacity, of which it is capable. We also believe that any newly resettled areas should be re-assessed on a regular basis to ensure maximum utilization of the resources.

If Government accepts these proposals, we expect to be able to go forward to various donors with Government and recommend that such a program can successfully address the land issue in Zimbabwe and one that we are prepared to support fully. This will result in a return of confidence to the industry, a resurgence of development, particularly of water storage and irrigation, it will raise the morale of Zimbabwe’s farmers, secure food and export commodity production and will raise investor confidence in the country as a whole. This should successfully arrest the economic downturn currently being expressed and once more bring the economy back on track.

[page number of print ed.: 53]

[FIGURE:] Estimated value of large scale agricultural production

[page number of print ed.: 54 = empty page]

[page number of print ed.: 55]

[FIGURE:] Estimated value of large scale agricultural production 1997

[page number of print ed.: 56 = empty page]

[page number of print ed.: 57]

ESTIMATED TOTAL PRODUCTION
LARGE SCALE COMMERCIAL SECTOR
(Tonnes 000's)

Notes:
Poultry figures only include table eggs and slaughtered birds.
It excludes all day old chick sales.
Dairy milk litres converted to kilograms by a factor of 1.03
Beef numbers converted to cdm by a factor of 210 kilograms per live animal.

[page number of print ed.: 58]

ESTIMATED VALUE OF TOTAL ZIMBABWE
AGRICULTURAL PRODUCTION

(Z$ Million)

[page number of print ed.: 59]

ESTIMATED VALUE OF TOTAL PRODUCTION
LARGE SCALE COMMERCIAL SECTOR
(Z$ Million)