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

IMPACT OF LAND ACQUISITION ON AGRICULTURAL PRODUCTION AND THE WHOLE ECONOMY.
Emmerson Zhou, Deputy Director, ZFU.

[page number of print ed.: 60]

IMPACT OF LAND ACQUISITION ON AGRICULTURAL PRODUCTION AND THE WHOLE ECONOMY.
Emmerson Zhou, Deputy Director, ZFU.

1. The land issue remains one of the major outstanding issues in post independence Zimbabwe. To date, after 18 years of independence, only about 3.3 million hectares have been distributed to the smallholder farming community. This by far falls short of the requirements of the thousands of communal farmers scratching a living in over crowded and arid lands. Resolution of this issue is now overdue and cannot continue to be postponed. It is in this regard that we welcome and fully support Government’s recent moves to identify for acquisition some 1 500 commercial farms for the resettlement programme.

2. The reaction to this bold and resolute step taken by Government has been mixed with a lot of voices both internally and externally calling for caution and emphasising the likely negative effect of this move on the economy in terms of loss in production and employment. The recent negative developments in the economy in terms of the crush in the Zimbabwe dollar, the poor performance of the capital markets etc. have been attributed to the manner in which the land question is being handled.

3. The speedy conclusion of the land reform exercise is necessary politically, economicallyand socially. It is important to fully understand that Government’s recent action is not coming out of over zealous leaders but comes out of correct interpretation on the part of the leadership of the growing discontent among our people over unfulfilled promises. We have in the past year witnessed problems that can arise out of postponing solutions to important social issues. The riots by farm workers (and resultant destruction), demonstrations by war veterans (and the resultant unplanned payouts) are cases in point. The patience of communal farmers is currently stretched to the limit due to continued delays to finding a lasting solution to this much talked about issue of the land. Decisive resolutions to this issue is necessary for the continued peace and stability which Zimbabwe had become renowned for.

   It is again important to realise that the programme is not a racial issue but is a programme aimed at availing economic opportunities to indigenous people who have been discriminated against by previous Governments. The objective of the programme is not to dispossess present land owners but to share the available land resource among Zimbabweans

4. The Zimbabwe Farmers Union is deeply concerned about the negative publicity that the programme has received locally and internationally. The publicity has been sprinkled with some misinformation and half truths about the intentions of Government including the objectives and manner of acquiring the land. We believe that more harm is being done to the economy in terms of loss of confidence not so much by the action of land acquisition per se but by the irresponsible comments passed locally and internationally by captains of industries and agriculture and economic commentators. It must be emphasised that the comments are not only coming from the white members of our community but also from many economically advantaged blacks.

   [page number of print ed.: 61]

5. In pushing for the land reform, the ZFU would like to see the achievement of the following objectives:-
   • Total eradication (not alleviation) of poverty among those to be settled.
   • An increase in agricultural production through full utilisation of land
   • Alleviation of population pressure in the communal lands

6. The Zimbabwe Farmers Union believes the land reform will have a positive impact on economy in terms of increased output and employment opportunities if it is implemented in a manner that addresses three key aspects:-
   • Selection and settling of competent well resourced farmers
   • Providing settled farmers with a secure tenure system
   • Providing settled farmers with reasonable cost financial windows

6.1 Selection and settling of competent farmers

The smallholder farming areas have a lot of farmers who have demonstrated the capacity to husband and produce at levels comparable to what is being achieved in the large scale farm sector. Available evidence indicate that the top 25% of communal areas farmers are achieving better performance in terms of input out ratios than an average commercial farmer.

Government has already accepted this principle of emphasising competency as a basis for settler selection. However, the reality on the ground has not changed much with the result that social and political considerations have tended to take precedence over economic considerations and the wrong type of settlers continue to find their way onto resettlement land. Settler selection for all schemes should be through an appropriately constituted panel headed by the Ministry of Lands and Agriculture and involving institutions that can contribute to this exercise.

6.2 A secure tenure system

Those to be settled need to be able to attract private sector resources for investment in a similar manner to those who are presently occupying the land. The collateral security base of the present commercial farm land must be maintained if the performance of the new settlers is to be compared with that of previous land owners. Maintaining the tenure system also opens up new opportunity for raising additional resources for the programme as suggested below. An extension of the communal pattern of settlements is not a viable option.

6.3 Providing a financing window for settlers

Present settlers have met tremendous difficulties in financing their farm operations largely due to an unfavourable financial climate in terms of interest rates as well as to lack of collateral security base. There is a need for a development financing window, similar to that which used to exist in the predecessor of AFC, to support farmers who are starting out. Whilst Government and the donor community could assist in this regard, an opportunity exist for resettlement beneficiaries to contribute to such an effort. The ZFU proposes the establishment of a resettlement fund for

[page number of print ed.: 62]

the purpose of supporting new settlers. Specifically, monies from this fund would be used for planning new schemes and as a revolving fund to support settlers.
Contribution into this fund would come from:-

1. an annual fee, pegged at reasonable levels to be paid by all settlers. Such a fee could be in the form of a lease fee that could be charged after changing the design of schemes into self contained units.
2. development levy which is currently being collected from employees
3. land tax on all commercial farm land

However, a key precondition for collection of the suggested settler fees is the planning of all schemes on the basis of self contained units and the strengthening of the tenure system with a view to awarding full titles to settlers.

7. WAY FORWARD

What is required now in order to advance this subject further include the following:-

1. A shared vision on the need and urgency of the land reform programme. This calls for continued positive dialogue on how to make the programme a success and not on advancing arguments on why the programme should not proceed.
   Such a shared vision should then be accompanied with efforts to positively sell the Zimbabwe’s land reform programme and other internal initiatives.

2. Collective action by commercial farmers to offer lands to Government in the desired areas. For such an offer to be taken seriously it must allow Government to meet its target of 5 million hectares within a reasonable period of time. Unfortunately the current proposal from the commercial farmers is seriously deficient in this regard. It must be understood that the process of compulsory acquisition of land by Government has been made necessary by the failure of commercial farmers to collectively offer land to Government in meaningful quantities in the right areas and at an acceptable rate.

CONCLUSION

Land acquisition per se will not have any negative impact on the country’s economy. In fact it presents new opportunities for intensification of land use, employment levels that exceed the present employment levels and also widens the income base and purchasing power among the rural people. Production and productivity will be maintained if the right people are given access to land and the present collateral security base in commercial farming land is maintained.