Cablegate: Zimbabwe's Resettled Farms: Can They Work?

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 HARARE 002561

SIPDIS

STATE FOR AF/S
STATE PASS FOR USAID
NSC FOR SENIOR AFRICA DIRECTOR JFRAZER
USDOC FOR 2037 DIEMOND
PASS USTR ROSA WHITAKER
TREASURY FOR ED BARBER AND CWILKENSON
USAID FOR MARJORIE COPSON

E.O. 12958: N/A
TAGS: ECON EAGR EFIN ETRD ZI
SUBJECT: Zimbabwe's Resettled Farms: Can They Work?

1. Summary: President Mugabe's fast track land reform ranks
among the most emotionally-charged and polemical policies in
Zimbabwe's 22-year history. Given the small number of new
farmers who have taken control of plots, the undermining of
due process, the politicized and untransparent manner of
reallocation, the resulting food crisis and losses in
productivity, employment and export earnings, it is
difficult to view the program as anything but a short-term
failure. It is unclear, but doubtful, if the longer-term
outlook will be better. End Summary.

Problems on the Farms
--------------------------
2. The Mugabe government argues that the country could not
escape some transitional discomfort as it passed farmland
from white to black ownership. It has already declared land
reform a success based on the number of farms allocated to
black Zimbabweans, figures we will review septel. The
government is also quick to point out that Zimbabwe already
has a working model for communal farming that yields, in a
rainy year, more than half the country's corn production.
After having spoken with several agricultural experts and
visiting some new communal farms, we nonetheless see nothing
but problems in the near-term:

- Loss of Tobacco Revenue. Because it is a capital-
intensive, sophisticated crop, few new farmers occupying
former commercial tobacco farms will continue to grow this
cash crop. This is a tragic loss for a country that became
the world's top tobacco exporter in the late-1990s.
Production will have dropped next year from 232 to as low as
70 million kg since 2000, according to the Zimbabwe Tobacco
Association. Tobacco was the private sector's largest
employer, and Zimbabwe's largest foreign exchange earner.
At the same time, tobacco took up only 3 percent of the
country's arable land, using sandy areas not ideally-suited
for corn, so the trade-off in land gain for new farms is
modest. Raising corn in these sandy areas will also require
extra fertilizer, a heavy burden on new farmers. (All of
the calcium and one-third of the ammonium nitrate used in
fertilizer is not produced domestically and quite expensive
at present.)

- Destruction and Ecological Damage. Former commercial
farms now resemble a war-zone. "War Veterans" and others
who took over the farms burnt crops, killed livestock,
poached or snared wildlife, felled trees (including the
common mopane that require two centuries to mature in
Zimbabwe's arid conditions) and destroyed high-tech farm
equipment. This is devastation that, in the best of
circumstances, will take decades to overcome.

- Low Interest or Skills of New Farmers. In a typical
former commercial farm, based on our observation, only 15-25
percent of assigned plots are actually occupied. Some new
farmers, often urbanites, have already given up trying to
raise crops, while others are simply unwilling to take up
residence there. On smaller A1 or even larger A2 farms, it
is rare to see even four rows of crop. The GoZ has not
enforced deadlines for new A2 farmers to take residence on
redistributed land.

- Displaced Workers. At the same time, hundreds of
thousands of farm workers are now unemployed. (They were
almost never offered new farms.) To varying degrees,
commercial farms had provided workers with adequate food and
housing (often with electricity and plumbing). Commercial
tobacco farms alone may have housed 2-3 percent of the
country's population. Many were born on the commercial
farms and will be unable to find new jobs, an enormous and
lasting economic burden.

- Lack of Creditworthiness of New Farmers. Most new farmers
are unable to borrow enough to finance production. This
seems to apply as much to larger A2 as to smaller A1 farms.
The GoZ has not given title to the new farmers, depriving
them of their most important collateral.

- Absence of Farming Inputs. Without collateral, new
farmers are unable to acquire the necessary inputs for
farming. Given fertilizer's imported components and the
Zimdollars' rapid devaluation, the cost of fertilizer has
increased 7-fold in a year. Seed supply is also low due to
the disruption of seed-producing commercial farms. As a
result, new farmers are dependent on the GoZ for input
assistance. In the Nov 14 budget presentation, the GoZ
proposed an additional Z$ 15 billion (US$ 9 million) to
assist new farmers, but it is difficult to imagine how this
small amount of money will make much of a difference.

Comment
-----------
3. In economic terms, fast-track land reform has been a
disaster for almost all concerned. Commercial farm workers
are destined for chronic unemployment. Zimbabwean consumers
must now pay higher prices than ever for staples such as
corn, whose production dropped from 2.15 million tons in
1999/2000 to 500,000 tons in 2001/02, drought admittedly
playing some part in the precipitous decline. White
commercial farmers became among the most productive
agrarians in the world; in a matter of months, they have
lost nearly everything. New settlers seem unable to raise
enough food for even their own consumption and generally
live in crude shacks with no amenities. Only a smaller
group of settlers, often political, police or civil service
higher-ups, have done well, acquiring larger plots or well-
appointed former family farmhouses.

4. Will the new farms ever become productive? If the GoZ
grants new farmers titles to their properties, allows farms
to freely change hands, eventually falling to "new farmers"
willing to actually farm, we could envision these
enterprises one day reaching subsistence levels with modest
surplus for domestic sale. For one who places the greatest
stock in indigenous ownership, this may qualify land reform
as a success. However, more profitable crops and economies
of scale -- the keys to export earnings -- will only return
if the GoZ adopts another framework for land reform that can
provide the foundation for a functioning formal economy.

Sullivan

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