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ZNR UUUUU ZZH (CCY MISSING SENSITIVE CAPTION AD9F890F MSI5189 544)
P 071642Z MAR 06
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC PRIORITY 9705
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
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RUEHBS/USEU BRUSSELS
RUEHGV/USMISSION GENEVA 0550
RHEHNSC/NSC WASHDC
RUCNDT/USMISSION USUN NEW YORK 1348
RUEKJCS/JOINT STAFF WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEKDIA/DIA WASHDC//DHO-7//
RUCPDOC/DEPT OF COMMERCE WASHDC
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK//DOOC/ECMO/CC/DAO/DOB/DOI//
RUEPGBA/CDR USEUCOM INTEL VAIHINGEN GE//ECJ23-CH/ECJ5M//

UNCLAS HARARE 000281 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
AF/S FOR B. NEULING 
NSC FOR SENIOR AFRICA DIRECTOR C. COURVILLE 
STATE PASS TO USAID FOR M. COPSON AND E.LOKEN 
TREASURY FOR J. RALYEA AND B. CUSHMAN 
COMMERCE FOR BECKY ERKUL 
C O R R E C T E D  C O P Y (MISSING SENSITIVE CAPTION) 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PGOV ASEC ZI
SUBJECT: AGRICULTURE EXPERTS PRESENT SOBERING VIEW OF THE 
SECTOR 
 
 
------- 
Summary 
------- 
 
¶1. (SBU) At an agriculture sector roundtable on February 24, 
local experts provided a sobering overview of the sector to 
visiting USDA crop analyst Dr. Curt Reynolds.  Reynolds said 
that he expected an increase in maize production over 2005. 
A Commercial Farmers, Union representative declined to 
forecast production, but said despite ideal rainfall the 
harvest would still be relatively modest given late planting, 
the lack of fertilizer, and sharp reduction in the area under 
production.  A representative of the fertilizer industry told 
Reynolds that a lack of forex was primarily to blame for the 
on-going fertilizer shortages.  A representative of the 
cotton sector said production would be up this year but would 
still fall far short of government estimates.  End Summary. 
 
--------------------------------------------- 
Good Rains But Delayed Inputs, Less Planting 
--------------------------------------------- 
 
¶2. (SBU) Reynolds said that based on the amount of land under 
cultivation and the good rainfall this year he was predicting 
an improved maize harvest over 2005.  Dr. Carl Levy, plant 
pathologist at the Commercial Farmers, Union (CFU) agreed 
with Reynolds that rainfall had been &near ideal8 over most 
of Zimbabwe since November.  However, he noted that there had 
been delays in accessing inputs and securing finance and as a 
result planting had been late.  In addition, there was an 
ongoing scarcity of fertilizer and a sharp decline in the 
area planted in soybeans and maize.  Levy said that the CFU 
did not have adequate access to accurate information to 
project crop yields and while an improvement was likely over 
2005,s extremely poor harvest, he did not expect a 
&bumper8 crop. 
 
¶3. (SBU) Levy attributed the dramatic reduction in the area 
under soybean production to a lack of know-how by new 
farmers.  He pointed out that soybeans were not a traditional 
Zimbabwean crop.  Soybeans had very different growing and 
handling needs than traditional dry beans.  In the past, 95 
percent of production had come from commercial farmers.  Levy 
said the area under commercial maize planting was also down 
30 percent from the previous season.  Compounding the 
problem, farmers were retaining hybrid maize seed, the 
second-generation yield of which was even lower than that of 
open-pollinated seed. 
 
--------------------------------------------- ----- 
Fertilizer ) Forex Shortages and Controlled Prices 
--------------------------------------------- ----- 
 
¶4. (SBU) Dr. Richard Dafana, Managing Director of Zimbabwe 
Fertilizer Company (ZFC), called foreign exchange shortages 
and non-commercial pricing his industry,s biggest 
challenges.  Delays in obtaining foreign exchange had 
prevented the timely and adequate production and distribution 
of fertilizer.  He cited potash for phosphate production as 
an example.  The industry should have imported it in June or 
July 2005, but delays in obtaining forex had pushed out the 
delivery date to November/December - too late for phosphate 
production and distribution to the tobacco and early maize 
crops. (N.B.: The tobacco industry is predicting a fall in 
production from close to 80 million kg in 2005 to 50-55 
million kg this year, the smallest crop since independence.) 
 
¶5. (SBU) Dafana said the recently announced nationalization 
of the fertilizer industry was unlikely to go forward.  He 
countered any suggestion that changing ownership or control 
would solve the industry,s problems, reiterating the 
forex-intensive nature of the business.  (N.B.: Since the 
roundtable, the GOZ announced that it had scrapped the plan 
to buy out the three main privately held fertilizer 
companies, including ZFC.) 
 
¶6. (SBU) Looking toward the impending winter grain growing 
season, Dafana said the scarcity of fertilizer supplies would 
severely hamper winter wheat and barley production.  He also 
noted that while chemicals were also in short supply, they 
were nevertheless priced right and were not traded on a 
secondary market.  Chemical shortages were thus not as 
critical as the shortfall in fertilizer.  Dafana noted that 
the sugar estates with access to forex were acquiring 
fertilizer by paying above the controlled prices. 
 
--------------------------------------------- ----- 
Cotton ) Better, But No Commercial-Farm Production 
--------------------------------------------- ----- 
 
¶7. (SBU) John Battershell, Managing Director of U.S.-owned 
Cargill Cotton, reported good seed distribution in 2005 at 
close to 7,500 tons.  He predicted that the crop could come 
in at 300,000 tons, an improvement over the 198,000 tons 
harvested in 2005.  However, the cotton crop would still not 
come close to the government,s estimate of 750,000 tons.  He 
pointed out that cotton, a communally grown arid crop, 
&didn,t like wet feet,8 and weed growth had been a 
particular problem in this wet growing season. 
 
¶8. (SBU) Battershell estimated that if large-scale &A28 
farms grew cotton, and if GMO seed were allowed in the 
country, yield could jump from the present average of 800 
kg/ha to 5 tons/ha, or higher.  In that regard, he claimed to 
have noted some shift in the GOZ,s view on GMOs, with 
prospects for GM cotton &furthest along8.  (N.B. The 
subject of GMOs received heightened press attention recently 
surrounding the visit of U.S. academic Tom de Gregori, who 
held discussions with the Biosafety Board of Zimbabwe on the 
implementation of biotechnology for enhancing agricultural 
output.  While the GOZ has been traditionally anti-GMO, press 
treatment of the visit suggested some softening of the 
position.)  Moreover, as upwards of 35 percent of South 
Africa's maize is now GMO and South Africa does not segregate 
GMO from non-GMO, Zimbabwe is already importing substantial 
quantities of GMO corn for human consumption. 
 
------- 
Comment 
------- 
 
¶9. (SBU) Ideal rainfall appears likely to result in improved 
agricultural output.  Reynolds predicted that the maize 
harvest would be between 900,000 and 1 million metric tons 
(MT) as compared to 2005,s harvest of 600,000 MTs.  However, 
this figure is still well below the country,s need and is a 
far cry from pre fast-track land reform production levels. 
Government policies, specifically insecure property rights, 
unaddressed structural failures in the input and output 
markets, and the failure to get qualified farmers onto the 
productive land and support them adequately, will deny 
Zimbabwe what could have been a bumper 2006 harvest. 
DELL