Sunday, November 21, 2010

Zimbabwe News Update: British Think-Tank Says Land Reform a Success

British think-tank: Zim land reform a success.

Sunday Mail Reporter

A BRITISH think-tank says Zimbabwe’s land reform exercise has been a remarkable success, contrary to images of destruction and chaos that have been churned out by Western media in the past 10 years.

A detailed research by the Institute of Development Studies at the University of Sussex in the United Kingdom led by acclaimed agricultural ecologist Professor Ian Scoones, says newly resettled farmers have done “reasonably well” following the correction of the colonial imbalances.

The 10-year study, which was carried out from 16 sites in Masvingo, demystifies the land reform programme which has been viewed in some Western circles as an abject failure and cause of food shortages.

“Since 2000 the old dualistic agricultural economy, the inheritance of
the colonial era, has gone for good and a new agrarian structure is fast emerging.

“This creates challenges and opportunities, winners and losers but cannot be characterised as abject failure,” said Prof Scoones.

Prof Scoones said the land reform was not a total failure signified by notable developments where new commercial farmers defied odds given the challenges presented by hyperinflation and lack of credit lines.

He said the overall pattern of land distribution revealed that the exercise was not largely to the benefit of political cronies.

“While no one denies the operations of political patronage in the allocation of land since 2000, particularly in high value farms, the overall pattern is not simply one of elite capture.

“Across the 16 sites, 60 percent of new settlers were classified as ordinary farmers. These are the people who had joined the land reform from nearby farms and had been allocated farms by District Land Committees under the programme.

“This was not a rich politically-connected elite but poor rural people in need of land and keen to finally gain the fruits of independence,” said Prof Scoones.

He said there was evidence of investment done on new resettlements.

“While there certainly has been substantial damage done to the basic infrastructure of commercial agriculture operations in some parts of the country — perpetrated by both new land occupiers and former owners — there has also been significant new investment; almost all of it private and individual efforts.

“Settlers have also built new homes, 41 percent made from bricks, many with tin or asbestos roofing. A key investment has been cattle, with herds building up fast.

“Sixty percent have cattle on the resettlements, with an average herd size of five.

“They have also acquired equipment: 75 percent of households own ploughs, 40 percent own bicycles, 39 percent own ox-drawn carts and 15 percent own private cars.

“This level of asset ownership is higher than comparable samples in the neighbouring communal areas,” he said. He contended that the agriculture sector in the country had been through difficult times adding that radical restructuring was inevitably painful especially when combined with economic hardship and recurrent droughts.

“In the relatively wet seasons of 2005 to 2006, around 75 percent of households in the northerly Gutu and Masvingo districts produced more than one tonne of maize, sufficient for household provision, some sales and storage.

“This demonstrates the potential of small-scale agriculture on the new resettlements, one among a number of sources of livelihood which includes a diversified portfolio of off-farm activities, trade and remittance income.”

Prof Scoones said the rural economy had also adapted to the new phenomenon, signified by a huge range of sources of beef suppliers and new players involved.

“The beef value chain is a good example. In the past there was a reliance on a few suppliers from large-scale ranchers, going through a few abattoirs of the Cold Storage Company. Today huge range of sources supply meat and many new players are involved.

“The collapse of the export market due to foot-and-mouth outbreaks has led to a focus on local sales and market connections,” said Prof Scoones.

He said evidence of substantial investment in new businesses in and around the resettlements, included shops, bottle stores, butcheries and transport operations.

“Such investment has generated a variety of new economic linkages, creating some much-needed rural employment.

However, the research noted that there was need to widen support towards the agriculture sector for the economy to realise growth.

“Future strategies must work to enhance economic stability — boosting local production and spending power. With the right support wider economic growth can be realised.

“What will be essential is to ensure that such support does not undermine the entrepreneurialism that has emerged in recent years,” he said.

Prof Scoones said the stabilisation of the economy and provision of credit lines to the farmers would help boost the sector.

Prof Scoones is an agricultural ecologist by training. His PhD thesis was entitled “Livestock Populations and Household Economy: A Case Study from Southern Zimbabwe (University of London, 1990).”

He is the author of numerous articles, chapters and reports on rural Zimbabwe, including the 1996 book “Hazards and Opportunities: Farming Livelihoods in Dryland Zimbabwe” (Zed Press).


Go for diamond empowerment

By Garikai Chengu
Zmbabwe Herald

AS Zimbabwe prepares to be the largest diamond producer in the world, the State must not only play an active role in ensuring that the majority of indigenous Zimbabweans are empowered by diamond production, but they are also supposed to protect the interests of the average Zimbabwean against entrenched foreign capital interests and corporate greed and corruption.

This can be done in four ways. Firstly, the State must draft legislation aimed at using indigenous diamond beneficiation as a means of empowering the average Zimbabwean, with particular focus on women, youths, war veterans and the disabled.

Secondly, the State must form a State Diamond Trading Company (SDTC), whose primary objective should be to buy rough diamonds from miners to sell to local cutters and polishers, in order to boost the downstream sector. This would create jobs, add value to diamonds and boost revenues for Government coffers when they are exported at higher prices.

Thirdly, prior to the State having a hand in empowering the majority through trading and beneficiation, the State must have a hand in helping indigenous small-scale miners operate in Chiadzwa through access to claims, equipment, finance and technical expertise.

Finally, for Zimbabweans to fully benefit from the mining, beneficiation and trading of their gems, they must know the value, extent and location of their stones. This can be ensured by the formation of the recently proposed State Diamond Exploration Company.

The global value chain of the diamond industry includes exploration, mining, sorting, polishing, dealing, jewellery manufacturing, and ultimately retail. Zimbabwe is able to conduct the first three stages but must focus on mastering the other four. In a nutshell, this mastery is beneficiation.

This mastery is crucial because the mark-up value of diamonds increases exponentially as they pass through the links of the global value chain. In fact, cutting and polishing adds around 50 percent to the value of rough stones as well as much needed employment creation.

The world market for rough diamonds is currently valued at US$19 billion annually, while the retail diamond jewellery industry is estimated to be US$90 billion.

Zimbabwe is set to become the largest producer of diamonds in the world by 2013. The nation is expected to produce 40 million carats per year and earn annual revenues of approximately US$2 billion. The importance of focusing on beneficiation lies in the fact that if Zimbabwe was to cut, polish and retail the gems internally, this figure would quadruple.

As it stands, the Government is struggling to deliver services and pay civil servants wages commensurate to their contribution, on a meagre budget of US$100 million per month. Set alongside this, revenues from Chiadzwa have the potential to transform the nation’s fortunes.

Crucial to the rapid growth and success of a beneficiation industry is the formation of a State Diamond Trading Company. The State diamond trader’s mandate should be to purchase a percentage of all rough diamonds mined in the country and resell them to local cutters and polishers. The SDTC is to operate on a cost-recovery basis, passing profit margins on to its clients. Local firms and craftspeople are then to purchase, cut and polish the rough stones, and then sell them on at market prices. The SDTC must also provide funding to assist with start-up capital for these indigenous small-scale beneficiators.

In fact, according to the Zuma administration, in the two years that the South African State Diamond Trader has been in operation, it has been a boon for the local downstream diamond sector. It has reportedly created thousands of jobs, added millions of dollars to the value of diamonds thereby boosted Government revenues.

Admittedly, there is not as yet a sufficiently large number of people with the requisite skills in Zimbabwe to realise such beneficiation plans.

Therefore, the SDTC should provide for an indigenous diamond beneficiation fund designed to provide young Zimbabweans with access to intensive training in diamond polishing and cutting abroad. Given the current lack of local cutting schools and traditions, this initiative would bring service and design knowledge back to Zimbabwe, so that the quality of cut diamonds is up to the industry’s standards.

Locally, however, for beneficiation to truly empower the majority, thousands of skilled Zimbabweans will be needed to process the gems. Therefore, Government must make a firm commitment to creating local schools and institutions to provide the workforce with the necessary skills.

Ideally, the vast majority of diamonds bought, cut and sold by indigenous beneficiators will indeed have been mined, sorted and sold by indigenous miners. There is no group more likely to be indigenous, and therefore likely to retain the revenues within the country, than small-scale miners.

However, thus far, only a paltry 5 000 hectares of the approximately 66 000 hectares that are potentially diamond rich have been allocated, all to large corporations, most of which are foreign owned and whose primary aim is to satisfy their shareholders not the local community.

It is imperative that Government accelerates the provision of diamond claims to small-scale miners as well as provide them with equipment, finance and technical expertise. Preference should be given to women, youths, war veterans, orphans and disabled groups.

This will not only empower the local population, but also provide a broad-based catalyst for economic growth.

Also, the ratio of societal value in large-scale mining is much lower than in small-scale mining. Small-scale mines employ more people rather than being mechanised, and the ability of small-scale mines to generate employment, income, and entrepreneurial skills in the rural areas can also act as a restraint on rural-urban migration.

For Zimbabweans to fully benefit from the mining, trading and beneficiation of their gems, they must know the value, nature, extent and location of diamonds across the country. Accordingly, the recently mulled Zimbabwe Exploration Corporation Bill must be enacted. The Zimbabwe Exploration Corporation’s mandate would be to undertake exploration work on all mineral deposits. The company is expected to provide detailed reports on the types of mineral and quantum of each mineral found in Zimbabwe.

Encouragingly, Government intends to achieve 40 percent exploration of Zimbabwe’s minerals next year in order to establish the location and size of deposits by the end of 2011. Such extensive mineral exploration would provide the State with sound information to attract and incentivise both local and foreign investors. Primarily, because the State would have details on the mineral type, geological nature, quantum and lifespan of discovered mineral ore bodies.

This comprehensive information is of utmost importance because, as Mines Ministry Permanent Secretary Mr Thankful Musukutwa said, Zimbabwe could use its resources to secure offshore credit lines or sell outright to investors.

By playing an active role in the exploration, mining, trading and beneficiation of diamonds, the State can ensure that the country’s most important natural resource empowers its human resources.

The author is a researcher at Harvard University’s Faculty of Arts and Sciences. He can be contacted at chengu@fas.harvard.edu. The views expressed herein are solely those of Garikai Chengu.

1 comment:

Robin Coleman said...

For the benefit of your readers, here's the original news story from the Institute of Development Studies. The website includes an audio and video interview on the BBC.