13 October 2013

Zimbabwe: 'Lack of Political Will Impedes Revival of Agriculture Industry'

POLITICAL will and creating an investor-friendly climate are imperative in restoring the country's agriculture industry and related service and manufacturing sectors, the Commercial Farmers Union (CFU) has said.

Since the 2000 land invasions, Zimbabwe has continued to face challenges in revamping its agricultural sector owing to lack of funding, power outages, inadequate skills among farmers and high water costs.

CFU agriculture recovery and compensation unit manager, Ben Gilpin said banks and investors need to be assured that those who borrow will be held accountable for their commitments.

"Certainly, there is dialogue and a shared understanding of the fundamental issues that will restore bankability to the land," said Gilpin. "The system has been broken and in the process new farmers are constrained by the lack of bankable instruments to finance their operations."

Gilpin said it was important that government recognises a need to facilitate a process of equitable access to land for farmers and thereafter allow the market to screen those best able to add value for the country's national good.

This, he said, would re-establish value and create diversification and the necessary value chains to drive holistic and sustained recovery.

However, land compensation remains contentious as government is of the firm opinion that it redressed a colonial land imbalances by implementing the land reform that destroyed the once vibrant agriculture sector.

The union proposed the use of the Velcon database, a system instigated by a joint initiative of farmers and valuation experts in order to create a credible verifiable resource to determine the quantum of compensation due to each farmer.

Said Gilpin, "Once a farm is classified within this basic category, individual farm data regarding specific areas of soil type, biological assets and infrastructural development are added, this information is verified by the use of Google earth satellite imagery which is able to distinguish historical development and new infrastructure constructed since the land was acquired."

The data base, he said, is able to generate valuations based on a number of specific criteria, be they depreciated replacement cost, market related valuations or other agreed criteria.

Gilpin said CFU hoped that the engagement of government and qualified independent valuators would assist in bringing about a resolution that is acceptable to both parties.

"We believe the data base and appropriate agreed and verifiable criteria are the basis for negotiation of both a composite value and also the simplest way to award compensation due in a transparent way," he said.

'NEW FARMERS' LAND IS COMMUNALLY OWNED'

Ben Gilpin said that in the past individual title deeds, while not the only factor considered in the banks' consideration of lending, provided core stability for their borrowings for on lending to farming.

Banks have continued to exercise restraint in funding the agriculture sector as new farmers' land is communally-owned and bears no security of tenure.

The union proposed that tradeable tenure instruments would have to be introduced and changes made to the regulatory environment creating an active land market as the basis.

"Clearly it is possible to create this within defined criteria that do not undermine the land and agrarian reform process," said Gilpin.

"While former commercial farmers have been largely removed from the field, the core enabling factors relating to their farming successes have not been extended to the new beneficiaries."

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