US embassy cable - 03HARARE2183

UNCLAS HARARE 002183 
 
SIPDIS 
 
STATE FOR AF/EX 
NSC FOR SENIOR AFRICA DIRECTOR JFRAZER 
USDOC FOR 2037 DIEMOND 
TREASURY FOR OREN WYCHE-SHAW 
PASS USTR FLORIZELLE LISER 
STATE PASS USAID FOR MARJORIE COPSON 
 
E.O. 12958: N/A 
TAGS: ECON, EFIN, AMGT, ZI 
SUBJECT: BREAD NOW BEYOND REACH FOR MANY 
 
 
1. Summary:  Bakeries have increased the price of bread from 
Z$1,750 (US 26 cents) to Z$2,500 (US 37 cents), well beyond 
the reach of most ordinary Zimbabweans who earn less than a 
dollar a day.  Bread has become increasingly important here 
since most families use it as a substitute for the local 
maize-meal staple, "sadza."  End summary. 
 
 2. Most winter wheat growers are now illegally 
circumventing the Grain Marketing Board (GMB) -- the sole 
organization entrusted by GOZ to buy grain -- and 
contracting with private millers.  The GMB is offering just 
Z$350,000  (US$52.63) per ton for wheat, well below 
production cost.  Because many farmers in question are 
beneficiaries of fast track land reform's A2 scheme and 
connected to the GOZ through military or civilian 
affiliation, the GOZ is unable to act against them.  These 
new farmers are selling their wheat at Z$2 million (US$ 
300.75) per ton to bakeries, which are passing on the cost 
to consumers.  Private importers such as Bakers Inn now pay 
the same price for flour.  New farmers are gradually coming 
to appreciate the cost of growing crops such as wheat.  They 
are increasingly willing to defy or ignore the GMB. 
 
3. Comment:  The GOZ now faces the dilemma of satisfying its 
new farmers while subsidizing the purchases of an already- 
restless population reeling from 456 percent inflation.  The 
authorities cannot move against these well-connected and 
powerful new farmers just starting to come to grips with the 
fundamentals of commercial farming: cost-recovery through 
profit-making. 
 
Sullivan