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Cablegate: Seed Shortage One More Threat to Maize Production

VZCZCXRO0878
PP RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #0821/01 2551613
ZNR UUUUU ZZH
P 111613Z SEP 08
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC PRIORITY 3422
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 2066
RUEHAR/AMEMBASSY ACCRA 2279
RUEHDS/AMEMBASSY ADDIS ABABA 2399
RUEHBY/AMEMBASSY CANBERRA 1676
RUEHDK/AMEMBASSY DAKAR 2032
RUEHKM/AMEMBASSY KAMPALA 2453
RUEHNR/AMEMBASSY NAIROBI 4885
RUEAIIA/CIA WASHDC
RUEHGV/USMISSION GENEVA 1548
RHEHAAA/NSC WASHDC
RHMFISS/JOINT STAFF WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEFDIA/DIA WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RUZEHAA/CDR USEUCOM INTEL VAIHINGEN GE

UNCLAS SECTION 01 OF 03 HARARE 000821

SENSITIVE
SIPDIS

AF/S FOR G. GARLAND
AF/EPS FOR ANN BREITER
NSC FOR SENIOR AFRICA DIRECTOR B. PITTMAN
STATE PASS TO USAID FOR L.DOBBINS AND E.LOKEN
TREASURY FOR J. RALYEA AND T.RAND
COMMERCE FOR BECKY ERKUL
ADDIS ABABA FOR USAU
ADDIS ABABA FOR ACSS
AFR/AA FOR KATE ALMQUIST AND FRANKLIN MOORE
AFR/SA FOR ELOKEN, JHARMON AND LDOBBINS
AFR/SD FOR DATWOOD AND HSUKIN
EGAT FOR DDODD, KBAUM, WCHANNELL, PSTEFFEN AND AMOUSHEY

E.O. 12958: N/A
TAGS: EAGR SOCI PGOV ZI
SUBJECT: SEED SHORTAGE ONE MORE THREAT TO MAIZE PRODUCTION
IN ZIMBABWE

-------
Summary
-------

1. (U) Zimbabwe is heading into the summer planting season
about one third short of needed seed maize. The past year's
seed maize crop was poor due to uneven rainfall and
inadequate supply of inputs. In addition, price controls have
deterred farmers from growing the crop and delivering it to
the formal market. The private sector expects the government
to fill the seed shortfall with market-priced imports that
will invariably arrive too late. Under these circumstances,
expert opinion suggests the 2008/09 commercial maize harvest
could be the smallest since independence. Plant breeding
expertise is nevertheless still strong and the backbone of
Zimbabwe's beleaguered seed industry. For their part, donors
plan to assist more than 270,000 households with agricultural
inputs this summer season. End Summary.

--------------------------------------------- --------
Shortfall in Seed Maize as Planting Season Approaches
--------------------------------------------- --------

2. (SBU) Zimbabwe has a shortfall of about 15,000 t of seed
maize out of the 40,000 t needed to grow enough maize to meet
domestic demand, according to Patrick Devenish, Group CEO of
Zimbabwe's dominant and publicly quoted seed maize producer
Seed Co Limited. In a meeting with econoff on September 8,
Devenish discounted figures provide by the GOZ at an August
28 meeting of the FAO-led Agricultural Coordination Working
Group. At that meeting, the GOZ had announced that it needed
50,000 t of seed maize and had 32,000 t available in imports,
local production and carryover stock. Stanley Kanembirira,
Finance Manager of U.S.-owned Pioneer Hi-Bred Zimbabwe blamed
the lower than expected yield of seed maize on very wet
conditions during the planting season followed by low
rainfall in February/March; incessant power cuts for the
irrigated crop; late or non-receipt of fertilizer and
chemicals; fuel shortages; non-availability of farm labor due
to low wages; and less than anticipated subsidized funding
from government.

3. (SBU) Devenish added that price controls on seed maize
were a major disincentive to growing the crop and to selling
it to the seed houses. Seed Co estimated that its contracted
growers had reaped 9,500 t of seed maize but would deliver
only 4,600-6,000 t to the company; they were selling the rest
from the farm gate or at local markets for human consumption.
Illustrative of the extreme price distortions caused by
ill-conceived price controls, maize today is selling by the
bucket at Harare's Mbare produce market for US$7.50-10 (60
buckets to the MT) or US$450-600/t, while the recently raised
controlled price of commercial maize is Z$4,500/MT (US$9 on
the parallel market today) and of seed maize Z$20,000/t
(roughly US$40).

--------------------------------------------- ----------------
Next Year's Maize Crop ) Possibly Smallest Since Independence
--------------------------------------------- ----------------

HARARE 00000821 002 OF 003

4. (SBU) Devenish predicted that next year's commercial maize
crop would be the smallest since independence, barring
perfect growing conditions. He expected the government to
awaken to the seed maize shortfall some time in November and
place last-minute orders from Zambia at market prices. The
seed would invariably arrive too late for optimal
early-December planting and high yield. Nor had the
government in the course of the year overcome any of the
non-weather related constraints of the 2007/08 growing season
noted by Kanembirira. In addition, Devenish noted that yield
also depended on who got the available seed--"master farmers"
or marginal-yielding growers. Without further comment he
said General Solomon Mujuru had asked him that day to see to
it that he got five tons of seed maize this year.

--------------------------------
Dim Medium Term Outlook, as Well
--------------------------------

5. (SBU) Devenish cautioned against dependence on seed maize
from Zambian growers, as they were shifting out of the crop
and into much more profitable back-to-back plantings of
winter wheat and summer soy. Also, he pointed out that,
contrary to common belief, seed maize was not generic and
could not be imported from just anywhere; it was bred for
specific conditions. Devenish called Seed Co's position in
Zimbabwe unsustainable. The local operation produced half of
the group's product by volume, but would contribute only
US$100,000 in profit against US$5 million from the group's
Zambian operation this year. The backbone of Seed Co
Zimbabwe was its world-renowned Rattray Arnold Research
Station outside Harare. If Seed Co began to lose the plant
breeding staff at that facility, Devenish said he could no
longer defend maintaining group headquarters in Zimbabwe. For
now, the company was fighting skills flight by providing
research staff frequent foreign-currency-paid training and
instruction opportunities throughout Africa.

-----------------------
Donors Commit to Inputs
-----------------------

6. (U) Although donors will not be able to overcome the
effect of perverse incentives, they will provide assistance
to a significant number of subsistence farmers. According to
the Food and Agriculture Organization, NGOs, through donor
funding, have put in place plans to assist more than 270,000
households (approximately 1.3 million people) in 41 districts
with agricultural inputs in the 2008/9 summer season.
207,000 households are targeted to receive seeds and/or
fertilizers, 50,000 households will receive training and
inputs for conservation agriculture, and 17,100 households
will be assisted through seed fairs and input voucher
programs.

-------
Comment
-------

HARARE 00000821 003 OF 003

7. (U) As the rainy season approaches, the country is
woefully unprepared for the 2008/09 growing season. Any
chance that Zimbabwe could generate a supply side response
this season to a rapidly implemented shift in agricultural
policy is slipping with every passing day of political
stalemate. End Comment.
MCGEE

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