US embassy cable - 02HARARE2561

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, Land Reform, Agriculture 
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