Industry hurt by land reform

The impact of Zimbabwe's controversial fast-track land reform programme has rippled through the economy, but it has been the country's once robust agro-industries that have been the hardest hit. The take-over and breaking up of most of the vast commercial farms to benefit landless and impoverished Zimbabweans has fragmented the market base of industries servicing the previously highly profitable estates. "Most of these companies have either downsized or ceased operations because there was no longer a sustainable demand base ... Most of the new settlers are small-scale and communal farmers who do not use much equipment or inputs. Large-scale farming requires extensive equipment and inputs and this is what the new farmers cannot afford," economist John Robertson told IRIN. "There was no policy foresight on the part of the present government. No planning was done because [the ruling] ZANU-PF was concerned mostly with how to survive the challenge of MDC [opposition Movement for Democratic Change]. The result of that tendency is what we see today - ruins of industry," said Tapiwa Mashakada, an economist and MDC legislator. Even farmers who have been settled on intact commercial farms, the so-called A2 scheme, have run into difficulties in financing the purchase of necessary equipment in the short to medium term. Recently, there was an outcry when some of the desperately needed winter wheat crop was left to rot in the fields when the first rains fell because new farmers could not afford to hire combine harvesters. Commercial farmers were traditionally an important market for engineering firms, who supplied tractors, combine harvesters and irrigation equipment. According to the latest Confederation of Zimbabwe Industries (CZI) report, local markets are shrinking due to the collapsing agriculture sector. As a result, 450 engineering companies have gone on short working hours and are hiring contract workers rather than permanent staff. About 12 small to medium firms folded between 2000 and 2001. Companies whose businesses depend on raw materials from the farming sector have also been hard hit. They include millers, bakeries, leather dealers, timber manufacturers and clothing and textile concerns. The CZI report said large-scale millers had retrenched more than 50 percent of their staff and had closed some of their branches. It cited a lack of inputs - mostly maize, wheat, and cotton seed - as one of the major constraints faced by the industry. The national maize demand is about two million mt per annum, but current production has been estimated at 500,000 mt. The country has only managed to produce 200,000 mt of wheat, against the domestic requirement of 400,000 mt. "Most small bakeries are still very marginal and company closures are taking place. In the event that wheat supplies do dry up, many fresh liquidations can be expected," the CZI report said. The leather industry, the CZI report pointed out, has been affected by the lack of raw hide. White commercial farmers whose land was occupied had complained that some new settlers had killed their cattle for food. According to media reports, the affected farmers also slaughtered their herds when it became clear the government was bent on evicting them. More details on the economic crisis