VZCZCXRO2390
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #0120/01 0431203
ZNR UUUUU ZZH
R 121202Z FEB 10
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 0053
INFO SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE

UNCLAS SECTION 01 OF 02 HARARE 000120 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EAGR ZI
SUBJECT: Zimbabwe Expects Another Poor Harvest 
 
¶1.  SUMMARY:  Zimbabwe probably will not see an increase in maize 
production this year, mainly due to poor weather and small-scale 
farmers' lack of financing for seed and fertilizer.  There was 
reportedly a sufficient amount of seed in the country, but the sole 
fertilizer producer could not keep pace with demand.  Many farmers 
register frustration with the Government of Zimbabwe's (GOZ's) 
failure to follow through on promises to subsidize inputs and make 
credit accessible.  Amid the disappointing outlook for this year, 
only tobacco farmers have reason to be optimistic.  Outgrower 
schemes promise to put more cash in their pockets.  END SUMMARY. 
 
 
 
Planting Less, Planting Late 
 
 
 
¶2.  Zimbabwe faces another disappointing harvest this year. 
Production of maize, Zimbabwe's main food crop, is unlikely to 
exceed 500,000 metric tons.  This is the consensus view of farm 
organizations and independent experts.  At the low-end, the 
Commercial Farmers' Union (CFU), which represents the few remaining 
white commercial farmers, projects maize output of around 400,000 
metric tons.  The head of the Zimbabwe Commercial Farmers' Union 
(ZCFU), which represents about 15,000 small-scale farmers (many of 
them on land seized from CFU members), expects a harvest of about 
500,000 metric tons.  In 2009 Zimbabwe produced 534,250 tons of 
maize, less than a third of the estimated national requirement.  In 
2000, the last harvest before the GOZ began seizing commercial 
farms in its "fast-track land reform," Zimbabwe produced over two 
million metric tons of maize. 
 
 
 
¶3.  Many of Zimbabwe's farmers delayed their planting for the 
current cropping season, and some reduced the area planted.  In 
addition to a lack of rain in some areas, a commonly cited reason 
is lack of financing.  This problem is most pronounced for 
small-scale farmers, who in recent years have received seed and 
fertilizer on credit from the GOZ's Grain Marketing Board (GMB). 
But dollarization of the economy in 2009 put an end to the GMB's 
buy-high-sell-low business model, and private suppliers have been 
slow to fill the gap in remote rural areas.  A survey of some rural 
districts in Masvingo, Matabeleland South, and Midlands Provinces 
in December showed little preparation had been done prior to the 
onset of the rainy season at year's end. 
 
 
 
¶4.  According to the Zimbabwe Farmers' Union (ZFU), which looks 
after the interests of small-scale farmers on communal lands, the 
amount of land put under maize in 2009 (1.2 million hectares) was 
just over half the area of the previous year (2.1 million 
hectares).  Small-scale farmers on communal lands normally supply 
most of Zimbabwe's maize harvest.  The ZFU says small-scale tobacco 
cultivation will hold steady at 40,000 hectares.  ZFU projects 
planting of cotton and soybeans to be unchanged at 200,000 hectares 
and 50,000 hectares, respectively.  According to most small-scale 
farmers econ specialist interviewed in December, the severe cutback 
in GOZ-subsidized supplies of seeds, fertilizer, and fuel was the 
main reason for reduced planting of maize. 
 
 
 
Expensive Seed, Too Little Fertilizer 
 
 
 
¶5.  In its January brief on food security, the Ministry of 
Agriculture reported that by the first week of January, between 50 
and 75 percent of the normal amount of planting had been done. 
Conventional farming wisdom in Zimbabwe holds that seeds should be 
in the ground before the rains commence, which happens by late 
December in nearly all parts of the country.  The Ministry's report 
also indicates that availability of seed improved in 2009: of 158 
sites the Ministry surveyed in January, 66 had maize seed, more 
than five times as many as a year earlier.  This report is 
consistent with a 2009 USAID-funded study that showed seed was 
widely available, if not necessarily affordable. 
 
 
 
¶6.  While availability of seed has improved, many farmers say they 
cannot afford to buy as much as they used to.  Seed companies told 
econ specialist that supplies were sufficient this year.  But 
small-scale farmers in Masvingo and Midlands Provinces reported 
that high prices kept them from buying enough seed.  Some farmers 
reported that a 10-kilogram bag of maize seed sold for US$28 while 
the GMB advertised a subsidized price of US$9.  But the GMB could 
 
HARARE 00000120  002 OF 002 
 
 
not muster financing to provide large amounts of seed at that 
price. 
 
 
 
¶7.  Both the CFU and ZFU report that there is a shortage of 
ammonium nitrate fertilizer due to problems bedeviling Sable 
Chemicals, the only domestic producer.  According to the company's 
management, Sable cannot afford to pay for the electricity it needs 
to sustain production of ammonia through electrolysis.  Sable is 
Zimbabwe's single largest consumer of electricity. The company 
recently negotiated reduced rates with the state-owned power 
monopoly.  Sable planned to supplement its output with imported 
finished products.  The firm requires financing for 
re-capitalization, but this is unlikely to materialize in the 
foreseeable future. 
 
 
 
¶8.  The farmers' unions also report that fertilizer prices have 
fallen by 50 percent from last year's levels, in line with the 
regional trend. Despite this, small-scale farmers in Masvingo and 
Midlands Provinces told econ specialist that they could not afford 
to buy fertilizer at the prevailing price of US$33 per 50-kilogram 
bag.  Small-scale farmers generally were unable to find fertilizer 
at the GMB's subsidized price of US$6 per bag.  Their frustration 
was magnified by GOZ officials who claimed that banks would extend 
credit against collateral in the form of livestock or the so-called 
"offer letters" that re-allocate land seized from commercial 
farmers.  But no banks would in fact do so. 
 
 
 
Comment 
 
 
 
¶9.   Zimbabwe's maize harvest should be about the same as last 
year, but conditions are different.  The weather has been less 
favorable, and the GOZ has not been able to provide the customary 
subsidies.  And so far, the private sector has been slow to pick up 
the slack where GOZ-financed services have ceased.  The exception 
is tobacco.  With most of the large-scale producers having been put 
out of business by farm invasions, the tobacco buyers are 
increasingly looking to small-scale producers, whom they support by 
advancing seed and fertilizer and providing extension services. 
Such outgrower schemes have already transformed Zimbabwe's tobacco 
economy, and they may be the future for other crops as well. 
Productivity is markedly lower than it was for the commercial 
farmers, but outgrower schemes arguably distribute cash incomes to 
a much wider range of rural households.  Whatever the future of 
agriculture in Zimbabwe, it will be different from the past. 
RAY