Posted on 08/29/2002 4:29:54 PM PDT by Clive
ZIMBABWEAN industries providing inputs to the agriculture sector could be prejudiced of more than $100 billion in revenue in the coming farming season because of the government's land reforms, a development that could have far-reaching consequences for the country's already troubled economy.
Analysts this week said demand for farm inputs in a normal season amount to $150 billion, most of it coming from the large-scale commercial farming sector.
They said demand would fall significantly in the 2002-2003 agricultural season, which begins in November, because of the eviction of white commercial farmers by the government to resettle its black supporters.
More than 90 percent of Zimbabwe's 4,500 commercial farmers are expected to have left their farms by the start of the rainy season in November.
"It's difficult to say exactly how much demand for inputs will fall by when this whole thing is over," a commercial bank economist said.
"But if normal demand is around $150 billion and only 10 percent of large-scale farmers are still farming, demand could fall to only $15 billion.
"These are only estimates, but it would mean that around $135 billion in revenue that would have been earned by these input suppliers would be lost. I would say definitely that at least $100 billion will be lost by those companies that provide inputs, equipment and things like that."
The prejudice would affect companies which provide inputs such as seeds, fertilisers and chemicals used to control pests and crop diseases.
Also prejudiced would be equipment suppliers as well as those firms that might have been paid to service and maintain farm equipment.
Service providers that might have been hired to build barns, dams and install and maintain irrigation equipment might also be affected by the decline in large-scale commercial farming activity.
Economic consultant John Robertson told the Financial Gazette: "The seed, fertiliser and chemicals would make up quite a bit of that $150 billion. But it might also have gone towards the maintenance of tractors and putting in and running irrigation equipment.
"I think that the government has the fanciful belief that in the end, small-scale growers will become customers of similar importance to these suppliers, but that won't happen because most of them will be growing for subsistence."
The analysts said most beneficiaries of the government's resettlement programme would not have the money to spend on inputs on the same scale as large commercial farmers.
The government says it has set aside about $8.5 billion to finance the work of the resettled farmers.
But opposition Movement for Democratic Change shadow minister for agriculture Renson Gasela estimates that it will cost at least $70 billion for the new farmers to grow just one hectare each for subsistence.
"Where are the farmers going to get the money to plant just one hectare of food for themselves?" he said.
The analysts said the drop in demand would be the last straw for most input suppliers, many of which are already experiencing declining sales because of the instability in the agricultural sector, the backbone of Zimbabwe's economy.
They said a further fall in the purchase of inputs was also likely to result in a decline in output across the agricultural sector.
In the tobacco sector for instance, a fall in seed sales has already caused the industry to revise downwards next year's potential crop.
NMB Bank said in its latest market commentary: "Seed sales by 9 August were reported to be down 27 percent at 222.8 kilogrammes when compared to 304.3 kgs during the same period in 2001.
"According to the ZTA (Zimbabwe Tobacco Association), this would translate to potential hectarage of 44,563 hectares against 58,855 hectares the previous season.
"Small-scale farmers account for 53.1 kgs to date compared to 43.0kgs in total in 2001. The reduction in area planted would result in significant declines in tobacco, which is a major foreign currency earner for the country. The country is already facing severe foreign currency shortages and while these shortages will not be solved by tobacco exports alone, every effort should be made to avoid further reductions in exports."
The resettlement scheme is expected to have adverse implications for manufacturers directly dependent on agricultural output as well as other industries, which would be indirectly affected by a decline in agricultural output and exports.
According to statistics from the agricultural pressure group Justice for Agriculture, the sector contributes US$765 million or 38 percent of Zimbabwe's total exports.
If 90 percent of commercial farmers stop farming, the country will lose US$689 million.
Robertson said: "Manufacturers will lose their customers and the raw materials coming from agriculture. Then there is a set of industries that are not related to agriculture but will also be affected.
"The textile industry for instance is closely linked to the clothing industry and once you lose the cotton that clothing depends on, you put in danger the industries that depend on this.
"We are generating a mess of inconsiderable proportions that reaches into so many different areas. The whole thing is so wrong and we are only beginning to see the fringes of the difficulties that are still to come."
The winter crop was either not planted or the farmers are being prevented from tending such of it that is in the ground, let alone harvest it.
The fertilizer and seed for the coming summer crop is not going to bepurchased, let alone planted.
All the published forcasts of food shortages are based on tiding southern Africa over until the next summer harvest next March and April.
There isn't going to be one.
ZIMBABWEAN industries providing inputs to the agriculture sector could be prejudiced of more than $100 billion in revenue in the coming farming season because of the government's land reforms, a development that could have far-reaching consequences for the country's already troubled economy.
"Land reforms"? That first sentence tells you all you need to know about where this article is coming from. It doesn't take a genius to figure out that siezing the land from productive farmers and forbidding them to grow crops will "prejudice" the entire economy. But they refuse to call a spade a spade. Idiots.
Mugabe's a genius. He's figured out how to keep any other tribe from taking over Zimbabwe.All that he has to do is run his empire into the ground, cleanse it ethnicly, and starve everyone.
Then England has to come in and re-colonize Zimbabwe after old man Mugabe dies, followed by English money to rebuild all that was destroyed.
< /SARCASM >
The fool won't be able to feed his troops.
a.cricket
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.