THE EFFECTIVENESS OF AGRICULTURAL INPUT SCHEME TO COMMUNAL FARMERS IN ZIMBABWE BY OSWALD CHISHANGA (D.PHIL CAND- DEVELOPMENT STUDIES)

Key words: effectiveness, input scheme, communal farmers, agricultural inputs, Zimbabwe, free distribution, dependency syndrome, corruption, market

Definitions

Effectiveness- he degree to which objectives are achieved and the extent to which targeted problems are solved. Effectiveness is determined without reference to costs. It is doing the right thing

Communal Farming- are various types of agricultural production in which multiple farmers run their holdings as a joint enterprise. This type of collective is often an agricultural cooperative in which member-owners engage jointly in farming activities.

Mechanisation-is the process of changing from working largely or exclusively by hand or with animals to doing that work with machinery.

The Zimbabwean government has over the years strived to expand its agricultural production through agricultural mechanisation and the agricultural input scheme. The government has identified communal farmers as key towards reviving the agriculture sector which is on the road to recovery since the government embarked on the fast track land resettlement programme (FTLRP) in 2000. Therefore, through agriculture mechanisation and input schemes there has been acquisition of farming inputs and use of tractors by arable crop farmers in communal and resettlement state land delineated during the period following the launch of the FTLRP. The agricultural input scheme in particular has been seen by the government of Zimbabwe as the most effective way of empowering communal farmers over the years. The government has since independence put in implemented several input schemes namely the Winter Crop Input Scheme, Agriculture Sector Productivity Enhancement facility (ASPEF), the Crop and Livestock Credit Input scheme. These schemes there were put in place with a noble cause of empowering communal farmers and bridging the gap in agriculture production following the land redistribution programme in the year 2000. However the effectiveness of the input scheme has been over they have been marred by several setbacks that have hindered their full implementation. Some of these challenges include too much government control, corruption, lack of funding, politicisation, lack of skills among communal farmers, persistent droughts and floods and crop diseases among others. These have severely weakened the effectiveness of the agricultural input scheme to communal farmers in Zimbabwe.

Agricultural input schemes have been a common feature that have been used by the Zimbabwean government to assist communal farmers especially in the event of disasters and droughts. During these periods the government would distribute inputs like fertilisers and seeds for free or reduced costs to communal farmers.  In Zimbabwe, the Ministry of Agriculture is largely responsible for the administration of the Government Input Support Schemes since 2000 with its Economics and Marketing Department being responsible for the planning and procurement. The inputs are distributed through relevant parastatals such as the Grain Marketing Board (GMB), Tobacco Industry Marketing Board (TIMB), Agricultural and Rural Development Authority (ARDA), Pig Industry Board (PIB), District Development Fund (DDF), and National Oil Company of Zimbabwe (NOCZIM). Muchara (2009)

These institutions are also involved in the identification of beneficiaries and recovery of the loans. Initially the private sector used to distribute inputs to the farmers on behalf of the government (e.g. Reapers for groundnuts and COTTCO for cotton). The Ministry of Finance and the Reserve Bank of Zimbabwe provided funds for the procurement of the inputs. The private sector was encouraged to get involved in the provision of inputs to farmers through contract farming. Over the years the number of institutions involved in the government input schemes was reduced and companies from the private sector ceased to distribute inputs on behalf of the Government.  Muchara (2009)

The practice of input schemes dates back to the colonial era where colonial governments rendered agricultural resource support to farmers though  this was less of direct input support and more of input price subsidies, viable product prices and general institutional support to relevant private and public enterprises. Chatizwa (1997). Intensification of the agricultural input scheme intensified from the year 2000 after the implementation of the FTLRP. From this period Govere etal (2009) highlights that there has been a deliberate government effort to support farmers through direct provision of inputs, necessitated by the need to prop up the new farmers created by the FTLRP. The FTLRP created a massive vacuum in agriculture production following the forced eviction of commercial white farmers. The   programme thus resulted in massive land transfers from the large-scale commercial farmers to the smallholder farmers under Model A1 (small-scale resettlement) and Model A2 (medium to large-scale resettlement) schemes. Govere (2009).

In the immediate aftermath of the FTLRP the Zimbabwean government in its quest to boost agricultural production and restore it to the glory years introduced the Crop and Livestock Credit Input Scheme to assist the new farmers in meeting production levels sufficient to enhance national food security and food self-sufficiency. The input scheme was put in place with the key objective of assisting communal farmers to establish themselves and to recover from the devastating effects of unfavourable economic and natural Environments like droughts and floods. Mushunje (2005). However, the input scheme proved to be not successful as it lacked adequate funding and government support to see it through. The government was already operating on a budget deficit thus the coming in of the input scheme put so much strain on government coffers. As a result very few communal farmers managed to benefit from the input scheme and those who managed to benefit were so few that they had no impact to the overall agriculture production and development. The limited government resources also resulted in failure to meet input demand while the inherent leakages in the distribution system have fuelled the black market thus exacerbating the plight of the smallholder farmers. The delays in input provision affected the production levels of most farmers, even those who are well endowed, because of the apparently widespread dependency syndrome among farmers. GoZ (2006).

In addition, the 2005/2006 summer season saw the launch of Operation Food Security/Maguta/Inala input scheme programme. The programs objective was to ensure food security by mainly focusing on production of maize, wheat and small grains. The input scheme was not that effective since it streamlined the targeting of crops and it resulted in a narrower-range of crop inputs being distributed. Only a few communal farmers managed to benefit from the input scheme since gave top priority to those farmers that were close to water sources or had access to an irrigation scheme. During that year another input scheme known as the Agriculture Sector Productivity Enhancement facility (ASPEF) was introduced by the Reserve Bank of Zimbabwe (RBZ) following the announcement of the May 2005 Post- Elections and Drought Mitigating Monetary Policy Framework to provide capital finance for agriculture and related activities at concessionary rates. This was in recognition of the critical role played by agriculture in the Zimbabwean economy, with the sector then contributing about a fifth of the country’s Gross Domestic Product.

ASPEF aimed at establishing linkages between agriculture and other key sectors of the economy that are critical in enhancing economic growth and to enhance food security, boost foreign currency generation through exports and foreign currency savings through import substitution on food and related products (RBZ, 2006).however, this input scheme for the communal farmer was not effective as it mostly targeted A2 farmers who had been lefty behind in previous input scheme. However as compared to the previous input schemes this was better funded thus communal farmers missed out on a valuable input scheme. This same scenario resonated in the implementation of the The Winter Crops Inputs Loan Scheme which mainly encompassed wheat production, had limited scope targeting only those farmers with capacity to irrigate although the implementation modalities were the same with the summer programmes.

Moreover, as earlier highlighted agricultural input scheme in Zimbabwe is not only done by the government alone. NGO’s and private companies are actively involved in the input scheme system. Over the years development aid agencies have been playing a significant role in the provision of agricultural inputs and support services in Zimbabwe and other developing countries. On the NGO side the main aim of agricultural input scheme relief and recovery programmes is to ensure food security and self- sufficiency of vulnerable households and to strengthen their capacity to handle future disasters. According to Rohrbach et al. (2004), several reasons have been commonly cited to justify the need for embarking on agricultural input assistance in Zimbabwe. These reasons are key indicators of showing how effectiveness the agricultural input scheme has been to communal farmers in Zimbabwe. Some of these reasons include poor rainfall leading to widespread shortfalls in food production relative to household and community needs, Shortages of basic foodstuffs on the retail market, increasing the probability that farmers will consume some of their seed supplies, The sharp decline in economic growth, reducing remittance income and off-farm employment, Shortages and consequent high prices of agricultural inputs on the retail market, The high incidence of HIV/AIDS resulting in labour shortages, capital losses and a larger proportion of child headed households.

Against this background it can therefore be said that the agricultural input scheme in Zimbabwe has been effective in addressing short term goals. For example a number of donor agencies have assisted farmers to recover from seasons of natural disasters and many communal farmers have benefited from new technologies. However, generally the input scheme has created donor dependency whether it is conducted by the government or NGO’s. Donor dependency has created more problems as people have become over reliant on the government for support every farming season. The government itself has done little to capacitate or empower communal farmers to be self-sufficient. Resultantly the agricultural input scheme has not been effective since year in year out there is continuous repetition of the same thing without any progress. Therefore in light of this input distribution is gradually being replaced by more market-friendly relief distribution approaches such as input credit schemes, vouchers redeemable at rural retail shops or voucher-based seed fairs.

Furthermore, it can be said that the input scheme in Zimbabwe has not been effective for communal farmers because The implementation of the government input support programmes has been occurring in an environment characterized by declining macro-economic fundamentals and has thus faced many challenges. Some the challenges that have emanated include hyperinflation and shortages of foreign currency resulted in acute input shortages. For instance, the fertilizer industry operated at between 30 and 60% of capacity during most of 2006. These shortages of essential inputs like fertilizer, chemicals and fuel have impacted negatively on agricultural production during the post-2000 period, thus, slowing down the recovery of the agricultural sector. Rusike (2006)

In the same vein of argument in factoring the costs of production, input suppliers were compelled to use the overvalued official exchange rate for the determination of the input prices yet some of the foreign currency would have been obtained at parallel market rates. The controlled prices in an environment characterized by hyperinflation and foreign currency shortages resulted in severe input shortages which expectedly gave birth to a thriving parallel market for most of the agricultural inputs thus defeating the purpose of assisting the vulnerable new farmers who were sometimes crowded-out by powerful individuals who took advantage of the inherent loopholes in the distribution system. This happened in this way because the government input programme took advantage of the geographical spread of GMB depots to distribute inputs (Govere et al. 475) whose prices were pegged at the same price throughout the country. Consequently, this reduced the marketing margins that could have obtained by private firms had the traditional marketing systems been allowed to prevail.

The unavailability of heifers on the market and shortage of foreign currency to import breeding stock severely constrained the livestock component of the input programme. Furthermore, government price controls affected the supply of most of the critical agricultural inputs such as fertilizers, seeds and fuel. These controls reduced the profitability of private sector involvement in the supply of inputs especially at a time when they had to source most of their foreign currency requirements at parallel market rates. Inadequate fuel supplies hampered the distribution of inputs to farmers and there were major delays that seriously affected crop production input schemes was never planted due to the low levels of mechanization in the smallholder sector. For instance, the 2002/2003 season saw the sale of 45,000 tonnes of maize but some of it was not planted (Matondi and Munyuki-Hungwe, 2006).

The issue of lack of land tenure security has hampered the access of commercial loans by new communal farmers. The Ministry of Lands, Land Reform and Resettlement has started the process of issuing 99-year leases for the A2 farmers who were allocated land. However, there are still major concerns on whether the 99-year leases offer sufficient tenure security to be used as collateral against commercial loans. There were some dishonest farmers and non-farmers who exaggerated their financial requirements and successfully acquired government assistance but later diverted the money to other investments such as the money market (RBZ, 2006). Some non-deserving farmers with own resources also applied for inputs and funds, thus crowding-out other farmers who genuinely needed assistance.

In light of the central role that was played by the government in funding input supply, it should be noted that the combination of controlled input prices and credit funds availed at concessionary rates resulted in farmers enjoying an implicit subsidy at a huge cost to the economy, especially considering the macroeconomic destabilization effect of the budget deficit. Furthermore, some of the inputs were not used at all (Matondi and Munyuki-Hungwe, 2006) or unproductively used while some funds were diverted to non-agricultural uses (RBZ, 2006). Widespread evidence in the press over the years indicates massive leakages from the government input support programmes. Some of the inputs were disposed off on the parallel market where they fetched higher prices while other inputs were directed to non-agricultural activities, particularly fuel which would have been distributed to farmers at highly subsidized prices by NOCZIM thus severely compromising the effectiveness of the input scheme to communal farmers.

Moreover, the severely limited transport and administrative capacity of the GMB has resulted in serious delays in the distribution of inputs to farmers despite the existence of a wide network of GMB depots throughout the country. Most commercial transporters are reluctant to service remote rural areas because there are insufficient incentives to ply the off-tarred routes. The administration of the Government Input Scheme has been so capacity demanding that GMB has been stretched to the extent of diverting from its core business of crop marketing and relief food distribution. Some farmers have voiced their concerns about their perceived “dumping” of inputs by GMB, which is usually unaccompanied by important information such as the prices of the inputs and crop management instructions. (Matondi and Munyuki-Hungwe, 2006)

One of the major policy shortfalls of the Government Input Scheme has been the failure by the relevant government ministries to clearly distinguish between commercial agricultural input credit schemes and the free relief handouts. This has confounded the targeting of beneficiaries under each of the input schemes with some well-endowed farmers also receiving inputs under the free scheme. This poor targeting has created two major problems.  Firstly, most recipients under the government input schemes do not feel obliged to repay the input or cash loans. They assume that government support is always a benevolent act meant to bring its citizens out of poverty. This has worsened the burden on the fescues. Secondly, it has also created a deep-rooted dependency syndrome among Zimbabwean farmers. The concomitant problem is that when government distribution is late in the season, even the well-off farmers are also affected because they have become so used to receiving and not buying agricultural inputs.

In conclusion it can be said that the Government Input Support Programme was essentially a response to the needs of the new farmers under the FTLRP including the communal and old re-settlement farmers. While the objective of the programme has primarily focused on ensuring household food security, the 2006/2007 season has witnessed a renewed focus on building national strategic grain reserves. The government input support schemes have immensely benefited the smallholder farmers who would otherwise have languished in a vicious trap of low improved input utilization and poor agricultural productivity. These input programmes have ensured agricultural recovery of farmers operating under periods of harsh economic and natural environments. However, a number of things went wrong. The massive government involvement as an input price controller, purchaser of inputs and input distributor created a conflict of interests due to the direct competition with the private sector in the provision of inputs.

In addition, the government failed to separate the commercial agricultural input credit schemes from the agricultural free handout scheme which led to significant leakages at a huge cost to the economy. The private sector is also to blame for the failed input distribution policies during the FTLRP period. The private sector failed to respond adequately to the input demands of the new farmers, not only because of the unfavourable economic climate, government controls and the high costs and risks of serving the new smallholder farmers, but also due to lack of innovation to meet the new challenges. Finally, if the government has to supply agricultural inputs to farmers, the use of alternative input distribution approaches such as vouchers and seed fairs which involve the private sector, offers an opportunity to effectively and efficiently distribute inputs to farmers without necessarily undermining or disrupting private inputs markets

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