Comparing agricultural policies of ZANU PF and the MDC Alliance: A quick look at the manifestos

As Zimbabweans brace themselves for what has been seen as a historic and inter-generational election, it is important to reflect on the political content of the policy positions of the main contesting parties. In this piece, I do a quick review of 8 key thematic areas concerning agricultural policy and rural development which are described in the political manifestos of the MDC Alliance and ZANU PF, the two largest political formations in the country. While I had access to the MDC Alliance’s full 106 page manifesto, I unfortunately could only get ZANU PF’s 23 page summary of its own manifesto. By corroborating the summary points with its current policy initiatives, I made an attempt to provide a more rounded picture of the ZANU PF policy thrust on agriculture. Whether this approach provides an accurate description of ZANU PF’s policy stance on agriculture will be open to debate, but I believe it will provide us a good starting point to make a more complete comparative analysis. You can access the comparison here.

 

Can the costs of Zimbabwe’s failed “fast track” land reform programme be quantified?

There is a recent article that has quoted renowned and respected economists who have pointed out that Zimbabwe has lost a total of US$17 billion in potential earnings over the past 17 years, due to from a combination of factors directly linked to the fast track land reform programme. Agricultural production lost due to stalled farm operations, destruction and rampant theft of farm infrastructure (such as irrigation equipment), the disruption in agricultural exports – including the disruption of export-driven supply chains – all led to falling output revenue that could’ve maintained economic stability, created new jobs, and strengthened the sector’s contribution to overall growth.

But that value understates the true extent of the cost of the fast track land reform. Zimbabwe did not just lose out on earnings from timber, cotton, tobacco, wheat, fresh flowers and other commercially-produced crops. The cost also paid a heavy price through exceptionally high levels of agricultural imports, particularly on food that the county was traditionally a surplus producer of. Zimbabwe has become the largest importer of maize in the region, and currently produces levels of wheat output that the country used to produce in the early 1960s. The country has spent at least US$3 billion in grain imports since the fast track land reform started, which brings the costs from export revenue lost, and imports gained at US$20 billion. With former white commercial farmers claiming compensation in the region of US$9 billion, the direct cost of ‘fast-tracked” land reforms Zimbabwe nears US$30 billion.

This estimate, of course, excludes lost job opportunities both within the agricultural sector and through direct and indirect linkages in the manufacturing sector. Not to mention the broader effects of general food insecurity, stunted economic growth, falling average incomes, and the collapse of social and economic services – such costs are difficult to quantify, or in some cases, difficult to even attribute them to land reforms. What is clear, however, is that the costs are quite staggering, and these can lead to an inter-generational crisis that a country might not be able to resolve easily.

If you studied agriculture, you are less likely to become a dollar millionaire

There has been plenty of talk about young people finding agriculture unfashionable, and there seems to be a consensus position that something needs to be done to make agriculture more attractive. Prominent young agricultural economists such as Wandile Sihlobo and Thabi Nkosi have been at the forefront of shoring support for and promoting agriculture in South Africa as a career choice. This message, however, will be dampened by the fact that those that study agriculture are less likely to become US$ millionaires, compared to other professions.

A recent article by BusinessTech has brought evidence to re-inforce the general opprobrium of the sector’s “poor man’s” status. Agriculture is not among the top 7 most rewarding professions in South Africa – which explains why many youth would rather go for Law, Finance and Economics, Accounting, Computer Science, Medicine, Engineering, Actuarial Science. If you studied law, there is a 27% chance that you will be among the High Net Worth Individuals (HNWI) – i.e. individuals who have net assets of $1 million or more.

Table 1: What HNWIs have studied

Screen Shot 2018-04-08 at 4.10.57 PM

Source: BusinessTech (https://goo.gl/kJkzSK)

Table 2: What industries HNWIs are involved in

Screen Shot 2018-04-08 at 4.33.38 PM

Source: BusinessTech (https://goo.gl/kJkzSK)

Overall, only 8.3% of HNWI that are engaged in agriculture are dollar millionaires. This is far less than other prominent sectors such as Financial and Professional Services – which includes banks, law firms, accountants, fund managers and wealth managers – (26.8%); and Real Estate and Construction (19.7%). The one caveat to take into account is that agriculture is comingled with mining – meaning that the actual percentage for agriculture alone is much less than 8.3%. One can argue that this number can improve if agriculture is also considered within the context of the farm-to-fork perspective. So if off-farm opportunities are considered – which include other parts of the value chain, such as the Fast Moving Consumer Goods (FMCG) industry linked to  food processing, distribution and retail, then you can add 6.4% to bring the total percentage to double digit levels.

Why the World Bank’s “mistake” deserves an African response

Many pan-African observers and analysts have viewed euro-centric and developed-world metrics of measuring various aspects of social and economic life with a healthy dose of skepticism. For instance, the global food security index, the corruption perceptions index, the democracy index and the competitiveness index are examples of  widely accepted qualitative measurements of social and economic life that essentially reflect the levels of development of nation states around the world. Institutions that proffer these measures – such as the World Bank, Transparency International and the Economist Intelligence Unit – are well respected and deemed to be scientifically objective in their methods and approaches.

The indices outlined above are critical in that they serve as a guide to policy makers and investors in making important social and economic decisions. However, a section of analysts has questioned the objectivity of these indices, including the weights placed on specific measures that are used to derive them. As with any science, the debate leans towards measurement errors, a lack of data and the due diligence involved in ensuring that the index-generating processes can be repeated by others to arrive at the same conclusion. Beyond the differences in scientific views, there are the political schisms that often lead to sharp divisions in economic opinion. Some scientists argue that the indices generated by these reputable international institutions should not be readily accepted because they make for a patently distorted picture of the developing world. Others go as far as claiming the existence of deliberate bias against developing countries – a conspiracy theory which argues that institutions measuring indices of social and economic development are western agents which possess an imperialist agenda that is meant to paint a negative picture of Africa and the developing nations.

As far-fetched as that conspiracy sounds, it was proven true in an article by Josh Zumbrun and Ian Talley in the Wall Street Journal (WSJ). In a rare public admission, the chief economist of the World Bank, Paul Romer, reportedly admitted that the World Bank unfairly influenced its competitiveness index. The World Bank is alleged to have done this by constantly changing its methodology over several years in ways it now admits, were unfair and misleading particularly to developing countries. The changes in the methodology negatively impacted the standing of countries like Chile, whose ranking plummeted after changes were imputed into the index. There is now a call for the World Bank to rectify its mistakes in previous competitiveness rankings going back as far as 2014. This ought to happen not just for Chile alone, but for every other country that is part of the list of the competitiveness rankings.

In light of these revelations, the integrity of the World Bank has been brought into serious question. To the keen observers, this problem goes far beyond the corridors of the World Bank – it fulfills an age-long fear and suspicion that western-dominated and western-funded institutions are broadly tainted by political motivations biased against Africa and the developing world. In the aftermath of such revelations, the integrity of other like-institutions that publish any kind of quality-based index of social and economic interest should be subjected to intense scrutiny. Many analysts who criticized these indices will feel vindicated by Paul Romer’s disclosure of World Bank practices, and will further argue for the establishment of comparable pan-African institutions that can generate their own indices as a way of mitigating the risks of what has long been viewed as a systemic distortion of euro-centric measurements that are applied to Africa’s development.

What has happened here is not trivial. It will surely shake not only the foundations of the  World Bank, but the practice and approaches of institutions that for long, have existed without the need to respond to criticism. Should Africa begin its own effort of measuring its own competitiveness index, food security index, democracy index, and possibly, credit ratings? Or should the World Bank and other like-institutions undergo a catharsis in which they actively integrate many of the previous criticisms and concerns that would otherwise have been ignored in the past? Whatever happens, I am certain that countries like Chile who were adversely affected by the World Bank’s errors will be at the forefront of demanding change. Africa should seize this opportunity and demand more accountability and transparency, as well as the inclusion of specific metrics that can help to provide a balanced picture of the continent’s competitiveness, food security, and democracy.

Do maize imports during a bumper harvest make sense in Zimbabwe?

No sane analyst can trust anything that comes out of the Zimbabwean government when it comes to statistics. Over the past 20 years, the government of Zimbabwe has ensured that the flow of information is restricted and controlled, and data is sanitized before being published for public consumption.  The vagueness and opaqueness of the information systems has ensured that no one, except a select few, gets to really know the true statistics, which is why maize production figures for the 2016/17 season have been received with a grain of salt.

It is for this very reason that Zimbabwe’s bumper harvest is now under intense scrutiny. In the aftermath of what was touted as a hugely successful season, the government sanctioned “command agriculture” project was pitched as a key driver to the country’s projected output of 2.2 million tons. The last time Zimbabwe produced a maize crop of comparable size was 18 years ago, when the country produced 2.1 million tons in 1999. Since this government is known for its notoriety for propaganda, it was not long before people started questioning the reported maize bumper harvest, with reports suggesting that large stocks of maize imports are still coming into the country. There are also reports that maize imports into Zimbabwe were banned, but the extent to which this ban is being enforced remains to be seen. I will deal with this point later.

The key question I want to reflect on first concerns why Zimbabwe is importing maize in a bumper harvest. The rationale for maize imports appears to be counter-intuitive to many people, and in fact, re-enforces the trust deficit between the citizens and a government which already lacks credibility. So the question of whether the so called bumper harvest is real or imagined is only natural because the very programme which has been identified as a key driver of the alleged bumper harvest was also largely secretive. For instance, the process of selecting command agriculture beneficiaries as well as the funding that was appropriated to them was not made public to all.  If it wasn’t for the public spat between Professor Jonathan Moyo and Vice President Emmerson Munangagwa – which subsequently led to certain documents being made public –  then some of us would never have known some of the details around command agriculture. And so, if there is a lack of transparency on how the programme itself was implemented, how can we trust the information that is being reported about its impact?

Having said that, it is important to know that grain imports amid a bumper harvest is neither an anomaly nor entirely unheard of. Some of the largest maize producers in the region and indeed the world, import maize regardless of how much maize they produce. It is normal for markets to import maize while having a surplus. For instance, South Africa has produced more than its national requirement in 16 of the last 20 seasons, and in many of those seasons, South Africa continued to import maize anyway, regardless of how large the harvest is.

That is not to say that South Africa has never had a period in which the country did not import maize. In fact, South Africa had null imports in three of the last 20 seasons, but that was due to market dynamics that made business sense to procure maize locally, rather than importing. It was not due to some government ban, as is the case with Zimbabwe. Rather, market participants have enough economic freedom to source maize from wherever they want, and in a surplus season, traders are free to “bargain-hunt”.

The problem with the Zimbabwean situation is that the government has a knack for disrupting the market, such that it never matures to a point where production can be competitive, and trading is free from ad hoc distortions. It’s always some kind of useless (and in fact harmful) elite-driven programme that usually benefits a privileged few at the expense of the market. And so in this case, we have politicians that benefited from free inputs out of a command agriculture project, who are now implementing policies that force the market to buy their own maize. If that is not a whole load of rubbish, then nothing is.

So the essence of this discussion can be summarized in three key points:

  • Regardless of how anyone might feel about command agriculture, there is no reason for people to suggest that maize imports in a bumper season is abnormal.
  • Whether the impact of command agriculture was over-sold or not, the idea that if a country has a bumper harvest then no import maize should be allowed into that country is nonsensical.
  • However, that does not mean that the programme itself should not be criticized on the basis of its flaws. I still think that command agriculture is utter nonsense in as much as maize import bans are rubbish policies that only serve to extend resource pillage, rather than promote food security.

How will Africa resolve crop losses?

I was in Malawi for their National Agricultural Fair during the week of the 14th of August, and my conversations with private sector, research scientists and non-governmental organizations gave me a fuller appreciation of the typical challenges in Africa. The two biggest problems facing the African continent thus far have been the extraordinarily low yields and the exorbitant levels of post-harvest losses. Usually, these two issues are addressed as separate conversations. However, while that is conceptually acceptable, both issues ought to be discussed simultaneously in practice – at least from a policy perspective. The reason why it is important to make low yields and high pre- and post-harvest losses part of a single collective discussion is because addressing one and not the other will likely lead to an insignificant outcome. If farmers produce more but neither have the mechanism nor the infrastructure to store their crop, they will still lose their commodities and remain food insecure. So the continent has a twin-problem that will require, at the very least, a two-pronged solution. How bad is the situation in Africa?

From a yield perspective, sub-Saharan Africa is anchored at the bottom of the trend – with average maize yields that are as low as 0.5 tons/ha and as high as 2.8 tons/ha for the continent’s better performers. The average for sub-Saharan Africa is less than 1.9 tons/ha. South African maize yields are of course, an exception, averaging 4.2 tons/ha. However, in other progressive parts of the world, average maize yields are in double digit territory. The United States for instance, averages 10 tons/ha to 11tons/ha. What this means is that sub-Saharan Africa needs to quadruple its maize yields to be able to catch up with the rest of the world.

On the face of it, the statistics above speak to smallholder farmers’ lack of access to high-yielding maize varieties. Ironically, sub-Saharan Africa has been producing numerous higher-yielding maize seed varieties, so the problem of access has little to do with the availability of seed technology. Rather, it has more to do with the poorly developed maize seed supply chains, which often fail to ensure that such seed is made available at the right place and the right time to farmers. The inconsistency of supply means that smallholder farmers find their recycled maize seed to be a more reliable source of seed. How do we fix this? Dr Ed Mabaya has noted that the problem within the seed supply chain has a lot to do with marketing aspects of it. In many instance, smallholder farmers neither know these higher yielding varieties nor are they made aware of the seed’s potential to improve output. So addressing the logistics and marketing of seed can play a critical role in helping to quadruple maize yields.

From a pre- and post-harvest loss point of view, it is estimated that smallholder farmers lose anything between 15% and 30% of their grain production. This is due to a number of reasons which include poor timing of harvesting, inappropriate harvesting practices, adverse weather conditions after physiological maturity of the crop, the crop’s exposure to invasive pests and wild animals, and losses due to poor storage infrastructure.

However, stand-out factors are pest infestations and moisture induced rotting and aflotoxin accumulation – which have become the focus of attention with serious impacts of the False Army Worm (FAW) in the former and human health concerns in the latter.

If we take 15% as the benchmark for food losses, then overall, pre-harvest losses account for 6% out of the 15%, while storage accounts for 6% to 8%. The balance is due to losses during threshing, shelling, drying and transportation – all of which are inevitable in any given production system. The two biggest issues, from a pre- and post-harvest loss perspective, is therefore centered around the actual harvesting practices and storage. Previous estimates reveal that pre- and post-harvest losses in sub-Saharan Africa translate to US$4 billion per year. So how can this be averted? Two conflicting schools of thought argue that pre- and post-harvest aspects should not receive similar levels of attention due to differences in relative importance. Some argue that more attention should go toward addressing pre-harvest practices that lead to mycotoxin infestation because there is sufficient storage to handle existing output. Others argue that storage remains critical and should therefore continue to be expanded in addition to on-going efforts to pre-harvest issues. However, data already shows that pre- and post-harvest losses are almost evenly split in terms of their contribution to overall losses. Therefore, it is critical to address both at the same time. Moreover, there is no evidence so far to show that existing private and public storage is sufficient for the market size in the region.

To what extent will avian influenza affect South Africa’s poultry exports?

The recent past has seen a heightened prevalence of disease outbreaks in poultry – most notably, strains of Highly Pathogenic Avian Influenza (HPAI). Some 18 months ago, the United States had 233 outbreaks of HPAI, while over 2600 outbreaks were reported 8 months ago in several parts of Europe, including Austria, Croatia, Denmark, Germany, Hungary, Poland and Switzerland and Netherlands. Outside of Europe, India and Israel reported outbreaks late 2016, after South Korea, Taiwan and the Russian Federation had reported outbreaks earlier in 2016.

Africa had been relatively quiet in terms of HPAI prevalence, until Zimbabwe confirmed an outbreak early June 2017. In late June 2017, South Africa confirmed its own outbreak – the first time the country had HPAI in chickens, with previous outbreaks having only been restricted to ostrich.

Since countries reserve the right to implement trade measures that ensure human and animal health, HPAI outbreaks are customarily met with bans. And as expected, Zimbabwe and South Africa have implemented mutual bans, with Botswana, Namibia and Mozambique also following suit.

To what extent do HPAI-induced bans impact on trade? Import bans on South Africa’s poultry imports from the EU – combined with anti-dumping duties and safeguards – led to a drop in the country’s poultry imports from the EU by as much as a 70% month-on-month basis between December 2016 – January 2017. The drop was particularly severe because a substantial portion of South Africa’s poultry imports – over 75% of overall total volumes – come from Europe, more notably the Netherlands and Belgium, among others.

There are, however, various arrangements that have been made to allow trade to take place despite outbreaks of HPAI. For instance, the UK and the US have continued to export to South Africa on the basis of compartmentalization and regionalization programmes that allow for poultry imports to be facilitated in those regions that are certified as disease-free.

In the same vein, South Africa can still export its poultry on the same basis, if such arrangements can satisfy the requirements of its foreign markets. So the impacts of the local HPAI outbreaks on South Africa’s poultry exports might not be as bad as potentially envisaged.

With one percent of local production reportedly affected by HPAI, effective disease control measures which prevent the spread of the disease can ensure that local production will not be adversely affected. Since most of South Africa’s poultry imports are already high, the supply side will not undergo a structural change significant enough to cause substantial movements in the local consumer price

Meanwhile, the structure of South Africa’s imports over the past six months seems to have shifted to a new equilibrium, with a readjustment that has seen some degree of substitution between competing suppliers of the country’s imports. The US seems to have replaced some of South Africa’s poultry imports from Argentina, Brazil and other HPAI-affected key supplier markets in the EU.

With this evolving structure in South Africa’s poultry imports, the flow of imports will expectedly remain stable, without any drastic shifts in import volumes – assuming that safeguards extended beyond their six-month lifespan, which was supposed to have lapsed early July 2017.

The bans that have been effected on South Africa by other regional markets will not affect the country’s poultry imports, not least because imports from African markets are virtually null. Therefore, bans from countries like Zimbabwe, Botswana and Mozambique will have no bearing over South Africa’s import volumes. With a dose of optimism, one can safely assume that South Africa’s poultry production and imports will remain relatively stable – assuming no further shocks happen in the immediate to medium term.

But the story is somewhat different when it comes to poultry exports. South Africa exports an average of around 70,000 tons of poultry per annum, 98% of which go to the very African markets that have implemented bans. In essence, the African market is worth one billion Rand per annum to the poultry sector.

Just how much of this revenue the industry will lose out will largely depend on the willingness of export markets to accept regionalization arrangements, the capacity of which South Africa is able to implement effectively. The emerging concern, in the immediate term, is how further HPAI outbreaks can be contained to prevent further spread to disease-free areas – a situation that will have a direct implication on production and export revenues.

*A version of this article was published in the Farmer’s Weekly Edition of 4 August