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Cablegate: Land Reform Decimates Cattle Industries

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

UNCLAS SECTION 01 OF 03 HARARE 002701

SIPDIS

NSC FOR SENIOR AFRICA DIRECTOR JFRAZER
LONDON FOR CGURNEY
NAIROBI FOR PFLAUMER
PARIS FOR NEARY

E.O. 12958: N/A
TAGS: EAGR ECON PHUM PGOV ZI
SUBJECT: LAND REFORM DECIMATES CATTLE INDUSTRIES

1. Summary. In addition to crop farmers, cattle farmers
have also succumbed to the pressures of the land reform
program. Currently, commercial dairy farmers represent half
of the remaining commercial farmers, while most commercial
farmers continue to raise some beef cattle in addition to
their primary operations. Although the number of dairy
operators has not decreased as dramatically as the numbers in
other farming sectors, the commercial dairy herd as well as
the large-scale commercial beef herd have seen drastically
reduced numbers due to widespread de-stocking in the past few
years. The impact of such reductions on Zimbabwe's food
situation have already begun to be felt, in the form of
shortages and sharp price increases, and will only worsen
with time. There are new indications that the GOZ may soon
target dairy farms, which until now have been spared the
wholesale ravages of President Mugabe's fast-track land
reform. End summary.

Dairy
-----

2. Both the number of commercial dairy farmers and the
number of productive dairy cattle have diminished in the past
few years. The National Association of Dairy Farmers (NADF)
states that of 437 commercial dairy farmers active in 1995,
only around 310 commercial dairy farmers remain in operation.
The commercial dairy herd, which stood at 96,000 animals in
1997, now numbers approximately 50,000 animals.
Traditionally, over 97% of the country's milk has been
produced by commercial farmers. Now, production from the
remaining dairy herd has dropped to the point that Zimbabwe
is only producing two-thirds of its daily consumption needs,
with widespread shortages of price-controlled milk and price
increases in non-controlled commodities such as butter,
cheese, and other dairy products.

3. Much of the physical reduction has seen non-productive
cattle -- calfs, dry cows, heifers in calf, which are
considered "followers" to a producing dairy herd -- being
de-stocked, or sent for slaughter. Lack of animal feed and
grazing land have also diminished production. Dairy cattle
are generally given maize silage as stockfeed in order to
maximize the production of milk. In a country facing such
acute shortages of maize as Zimbabwe, stockfeed is given
little priority, and milk production has suffered.
Commercial farmers -- even dairy farmers -- are denied the
right to graze cattle or even to grow stockfeed maize by
militant settlers who are claiming specific fields in the
name of the Third Chimurenga (revolution).

4. Dairy operations are also threatened by the continued
spread of Foot & Mouth Disease (FMD). Due to a lack of
forex, the GOZ -- which is the only entity entitled to import
FMD vaccine -- has been unable to purchase vaccine against
the disease, which can decimate dairy production in affected
herds. FMD outbreaks have been reported in Matabeleland,
Masvingo, and Manicaland, all of which border on some of the
prime dairy areas. While cattle can recover from FMD, milk
production in dairy cattle is destroyed if they contract the
disease. The NADF reports that Botswana, which has refused
to extend further credit to the GOZ for the purchase of
vaccine due to its multi-million dollar vaccine debt, is
considering giving the vaccine to the GOZ simply to protect
its own valuable herds from the threat of contagion.

Milk Processors Also Feel the Strain
------------------------------------

5. Dairibord, the primary purchaser and processor of raw
milk products, concurs with NADF's views. Processors are
currently working against a pricing conundrum which explains,
in part, the sharp rise in non-milk dairy products: while
the costs of purchasing raw milk have increased from Zim $35
to Zim $90 per liter in the past year, the controlled price
at which they can sell a liter of pasteurized milk is Zim $78
per liter. In a sense, the other products -- butter, cheese
and yoghurt -- are subsidizing the controlled cost of
pasteurized milk. Availability of raw milk has also had an
impact on non-controlled prices. Dairibord estimates that
against national demand of 13 million liters per month,
Zimbabwe's dairy farmers are only producing 9 million liters
per month. All stakeholders agree that the primary pressure
is coming from a tangent -- there is less pressure from
direct threat of takeover than from reduced productivity
based on land use issues and reduced availability of
high-quality stockfeed. Milk processors such as Dairibord
and Nestle' are attempting to implement mitigation measures
to help protect production against such threats. For
instance, Dairibord and Nestle' are both involved in a loan
scheme which helps subsidize the importation of stockfeed for
dairy operators.

Will the GOZ Seize White-Owned Dairy Farms?
-------------------------------------------

6. Commercial dairy farms have so far occupied a unique
situation vis-a-vis the land resettlement program. President
Mugabe has reportedly stated that dairy farms are of
strategic importance, although nobody has been able to
corroborate where or when such a statement was made.
However, pursuant to this unconfirmed policy, dairy
operations have been largely untouched by the GOZ's attempts
to dispossess all white commercial farmers. At this point,
of the remaining 310 dairy farmers, as many as 187 are
operating under Section 8 final acquisition notices, although
the GOZ has not pursued the mass dispossession apparent in
other sectors. Still, due to the lack of centralized control
over the resettlement process, some individual farmers have
been targeted by both renegade war vet groups and
high-profile GOZ supporters, some of whom attempt to seize
the entire asset -- dairy operations, dairy herd, equipment,
and all. In one case, a farmer without a Section 8 notice
was told by war vets on November 13 that he had 48 hours to
vacate his dairy operation. The farmer desperately scrambled
to sell his productive dairy herd to other dairy farmers,
knowing that generations of breeding would be lost if the
cattle were simply sent to slaughter. The farmer eventually
learned that the farm was being claimed by Godfrey
Chidyausiku, the GOZ-appointed Chief Justice of the Supreme
Court. In another high-profile case, at least two dairy
operators in the Mazowe area -- approximately one hour
outside of Harare -- report that Grace Mugabe, the
President's wife, has made two or three visits to each of
their farms. Their impression is that Mrs. Mugabe is
"shopping" for a farm which she will then claim. The NADF is
not sure if these cases imply an apparent weakening of the
view of dairy farms as "strategic" assets, or whether they
simply represent opportunistic responses on the part of
acquisitive individuals with enough power to enforce their
demands.

Commercial Beef
---------------
7. Beef cattle operations have also been decimated by the
current resettlement program. There is less ability to
quantify the reduction in beef cattle farmers because many
farmers who produced other commodities would traditionally
produce beef cattle as well. Subsequently, there is no
discrete number which represents the number of beef cattle
farmers. However, recent calculations suggest that the
commercial breeding and beef herd has drastically decreased
-- from 1.3 million in December 2001 to less than 250,000
currently -- during the past year. Many of these cattle have
been sent to slaughter in an attempt by farmers to salvage
some value when they were evicted from their land. Others
have been abandoned and targeted by rustlers who have shipped
the cattle to Mozambique, where an active forex-base market
in stolen cattle is reportedly thriving. Of course such
actions, which completely bypass any attempt at veterinary
control, increase the potential spread of FMD. Some of the
cattle have simply been absorbed into the communal herd,
which changes the availability of the animals to the
consumption market.

Comment
-------

8. While both commercial and indigenous farmers raise
cattle, there is a radical difference in the value of such
cattle to their owners. Communal farmers tend to view their
cattle as more of an asset than a commodity, and value them
for draught power, sources of fertilizer, and symbols of
wealth. They are more likely to send an animal to slaughter
to cover a specific debt or to host a specific event.
According to one economist, commercial farmers traditionally
sent approximately 20% of their stock annually to
slaughter-houses, while indigenous farmers slaughtered only
2% of their stock annually. In recent years, even when
cattle farmers managed to retain some of their land, they
were still constricted by competing land use claims by
settlers, and a much higher percentage of cattle was
de-stocked. Currently, when a commercial farmer is evicted,
he faces two choices: whether to sell / abandon his cattle,
which are then absorbed into the communal or small-scale
herds, or whether to send his cattle to slaughter. Although
the communal herd is inevitably increasing due to the current
displacement, this will not necessarily increase food
security. While there has been a glut of beef on the local
market recently (most likely the result of desperate choices
by commercial farmers), the inevitable winding down of
commercial farmers' affairs has already had an impact on the
availability of beef. Recently, despite GOZ mandated price
controls, the price of beef went up by 100%, and slaughter
houses continue to complain that they can't buy enough cattle
to keep up with demand.

9. The continued efforts by the GOZ to serve Section 8
notices, as well as its apparent complicity in seizures of
farms by high-level ZANU-PF officials, belies official claims
that the land resettlement program is complete. Seizure of
the remaining commercial dairy farms could strike a lethal
blow to the already strained dairy industry.
SULLIVAN

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