News Column

New Permits Offer Few Gains for Resettled Farmers

July 26, 2014

Newly introduced land permits for resettled smallholder farmers will bring little gain to the thousands of beneficiaries who are struggling to get loans from banks to finance their operations, say farmers' organizations and analysts.

President Robert Mugabe launched the new "A1" land permit at the beginning of July at a ceremony in rural Mashonaland East Province where he described the document as a reason for Zimbabwe to "celebrate the emancipation and empowerment of our people". So far only 2,000 out of more than 200,000 resettled farmers have received the new document.

The permit will replace the offer letters that the farmers received following the fast-track land redistribution programme that started in 2000, eventually forcing more than 4,500 white commercial farmers off their plots to make way for landless blacks.

The offer letters gave the resettled farmers 99-year leases, but banks refused to accept them as collateral when approached for loans to buy farming inputs, grow livestock numbers, diversify crops and pay labourers.

According to the Lands Ministry, the new permits can be used as title deeds and will be issued to "indigenous"- meaning black according to the indigenization law - Zimbabweans settled on a "properly planned and verified farm".

The permits can be inherited by family members and spouses while divorced spouses can still retain landholding rights. The old offer letters did not specify whether the resettled farms could be inherited, although surviving spouses and children often continued to live on and work the land, sometimes leading to ownership disputes.

However, even under the new permits, ultimate ownership of the land continues to rest with the state which can repossess farms not being fully utilized. Current permit-holders are expected to build decent homesteads on their plots, avoid sub-letting their properties and ensure that there are clean and safe water sources. According to the Lands Ministry, farmers whose land is repossessed by the government will be able to claim compensation for any improvements made while they occupied it.

The Lands Ministry initially said the new document would not only give farmers greater security of tenure but could be used to borrow money from banks, encouraging investment into farms. However, farmers and economists have pointed out that banks will not accept the new permits as security due to the lack of guarantees that they would be able to recover their money.

"The land remains state land and government has the final say on the farms. This makes banks powerless in the event that a farmer defaults as they don't have authority to seize the property or auction it to recover their money," said Wonder Chabikwa, president of the Zimbabwe Commercial Farmers Union (ZCFU).

Resettled smallholders need financial assistance

Eric Bloch, an independent economist, said financial assistance was "very critical" for the resettled smallholder farmers.

"Most of the farmers are from low-income households so, in order to grow their farming business, they need to borrow. The money is essential for inputs, to pay farm labourers and ensure there is adequate water for irrigation by sinking boreholes or wells.

"Besides decongesting the land, one of the main purposes of resettling the people was to ensure that they boosted agricultural production. The farmers have to go beyond subsistence but must be enabled to farm at a commercial level," Bloch told IRIN.

Zimbabwe has faced chronic weather-related food shortages in the past decade with a significant proportion of the country's rural population needing food assistance from the UN World Food Programe and other aid agencies in recent years.

Bloch said while some farmers had been enjoying good yields since resettlement, the majority were under-utilizing their land because of poor access to finance, while Zimbabwe's poorly performing economy had also taken a toll.

After making some fragile gains under the previous coalition government made up of President Robert Mugabe's ZANU-PF party and the opposition Movement for Democratic Change (MDC), the economy has been in crisis over the past year since Mugabe and ZANU-PF won general elections in July 2013. Company closures and downsizings have been on the increase, pushing up already high levels of unemployment and hitting household incomes.

Farmers who relied on remittances from their children or relatives working in the towns and cities have seen those remittances dwindle, while a widespread shortage of inputs on the local market was pushing prices up and reducing the farmers' capacity to buy enough fertilizer and seed, said Bloch.

Sinodia Makwara, 51, received an eight acre plot in Mazowe, some 60km northwest of Harare in Mashonaland Central Province 10 years ago, but told IRIN she had not been able to fully utilize all of her land due to a lack of capital.

"I need money to sink a well in order to irrigate my vegetables and other crops when the rains are poor and there is no water in the river. I also need to buy more cattle to increase my draught power and to pay those that provide tractors for tillage," she said.

With a US$5,000 loan, Makwara, a widower who lives with her three children and five grandchildren, believes she could buy more inputs, hire more labourers, increase her acreage and turn her farm into a profit-making business.

Grain Marketing Board failed to pay farmers

Vince Musewe, an independent economist, said failure over the years by the government controlled Grain Marketing Board (GMB) to pay the resettled farmers for their grain had increased the need for them to access loans.

"GMB has prejudiced farmers because of delayed payments for delivered grain or a complete failure to pay. As a result, the farmers have been struggling to mobilize inputs come the next farming season. They also need money for chemicals when crop or livestock diseases break out," he told IRIN.

Over the years, the government and NGOs have provided free inputs to smallholder farmers, but they were not sufficient, according to Musewe, and government recently announced that starting this year it would no longer be providing any free farming inputs.

An ongoing research study by Ian Scoones, at the Institute of Development Studies at the University of Sussex in the UK, looking at the impacts of Zimbabwe's land reform programme in Masvingo Province found that resettled farmers have tended to produce more than those farming communal land.

Musewe said this was mainly because the land they were cultivating was generally larger and more fertile. He added, however, that both groups of farmers needed financing to boost production.

No guaranteed access to bank loans

Land and Rural Resettlement Minister Douglas Mombeshora recently admitted to the government-controlled Sunday Mail newspaper that the permits would not in fact guarantee access to bank loans but insisted they would give beneficiaries greater security of tenure.

Chabikwa of the Zimbabwe Commercial Farmers Union agreed that the new permits would increase farmers' security by giving them permanent rights to the land allocated to them. Previously, resettled farmers have sometimes been arbitrarily evicted to make way for other more politically powerful individuals. As a result, the farmers were reluctant to make permanent improvements to their plots. Now, "they can go ahead and build permanent structures knowing that they will not be removed at will," said Chabikwa.

However, Musewe said improvements made to the farms would not have much value. "It will be difficult for banks to use structures such as houses and other immovable properties acquired by the resettled farmers as collateral. Banks are afraid that the properties might fail to attract buyers since they are based in rural areas."

He added, however, that resettled farmers would still lack security of tenure. "Government, or some individuals, can still evict the farmers on flimsy grounds if they feel that occupants of land are politically incorrect. They can use flimsy excuses like lack of productivity to victimize their enemies," he said.

Chabikwa said his organization was considering other ways of providing security for loans, among them developing cattle banks and insurance certificates based on farmers' possessions.

A local financial institution, Steward Bank, has already introduced cattle banking, whereby farmers can use their livestock as collateral when they need loans and gain interest on the cattle. Borrowing farmers can get back their cattle, which are cared for and kept by the bank at designated places, after two years or choose to leave them there for longer.

[ This report does not necessarily reflect the views of the United Nations. ]


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Source: AllAfrica


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