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Some comments and reflections on the World Bank land study Terms of Reference

by Sam Moyo, Ian Scoones and Ben Cousins

April 2009

As researchers engaged in this area, we were surprised and disappointed by the way the ToR for this important work was presented. In our view it missed some important factors, and failed to grasp the fundamental implications of the post-2000 change in the agriculture sector. As a result the ToR misses an important opportunity to address some of the key challenges at this critical juncture.


In particular, we believe that it is mistaken to:

  • Frame the current problem as one of ‘revitalising’ a pre-2000 agricultural system (and its infrastructure, holding sizes etc.)
  • Emphasise farm ‘viability’ in standard economic terms without addressing wider livelihood contexts
  • Argue that the current food security crisis is due to land reform, and could be reversed by reinstating large-scale commercial production
  • Repeat the now long-disputed relationship about tenure and investment
  • Focus on compensation issues as part of this effort

 

The ToR in addition failed to take into account some of the very particular challenges in the land and agriculture sector facing Zimbabwe today. If any strategy is to succeed, these need to be addressed head on. These include:

  • The importance of the small-scale sector (and A1 and communal farms in particular) for both agricultural production (especially of staples and cotton) and for economic multiplier effects
  • The increasing blurring of boundaries between farm size categories and the potentials for greater local level (territorial) integration in agrarian development
  • The need to link agricultural support – and the collapse of effective input supply and extension services – to land reform questions, in a wider reflection on agrarian development for the future

 

The distortions and disincentives provided by the current economic situation, and how this has led to speculation, limited credit facilities and low or inappropriate investment

Overall, the ToR seems to imply a return to a golden age, when large-scale commercial production was providing plentiful foreign exchange and the nation’s food granaries were always full. This age of course never existed. The large-scale commercial sector was in receipt of substantial direct and indirect subsidies for many years. This of course did create significant commercial success – in tobacco, sugar and tea, for example – but at a substantial historic cost. Not all commercial agriculture was so successful, however. The beef industry, for example, always ran at a loss. And of course some of the great commercial agriculture success stories of the recent past were not reliant on the large-scale sector at all – the dramatic growth of cotton, for instance, was almost exclusively due to small-scale sector successes. Similarly, the statement that Zimbabwe was always (or largely) food secure and did not require food imports in the past is simply inaccurate. Through the 1990s, food was imported in all years (mostly wheat) and in some years in substantial quantities as the domestic maize crop failed, peaking in 1992.

The changes of the past 9 years have seen the end of the extreme dualism of Zimbabwe’s agricultural sector. A more strategic discussion of the options for a diverse and economically vibrant rural sector is required, looking to the future rather than the past. This will require inter alia:

  • A fundamental rethink of rural financial services, and the way credit in particular is offered, moving beyond the requirement for freehold title as collateral to new forms of credit guarantee supported by the state
  • Consideration of a range of land tenure options for securing land rights and encouraging investment, including permits, leases and other mechanisms
  • A redesign of infrastructural and technological support, again moving beyond the assumption that certain types of scale-specific infrastructural investments (in irrigation facilities, production/processing equipment, tobacco barns etc.) are appropriate to the present context
  • A rethink of market systems and supply chains, looking to different markets - not necessarily high-value, but high risk European/North American export
  • Support for the dynamic entrepreneurialism of new farmers – particularly in the A1 farms – and avoiding undermining this with inappropriate or heavy-handed stabilisation measures
  • Active intervention by the state – not in the distorting practices of ‘command agriculture’ or price fixing – but through coordinating, facilitating and providing focused subsidies and start-up finance to get agriculture moving

In sum, the land redistribution that has occurred now needs to be linked to a broader strategy for rural development and agrarian reform. This requires linking the proposed land and agriculture ToRs in more imaginative and forward-looking ways.

While the issue of compensation is clearly critical, and remains a political stumbling block that will need to be addressed, this requires a separate assessment, drawing on regional and international experiences. Issues to be addressed would have to include: land valuation methodologies in Zimbabwe and elsewhere; land market/price histories and practices in Zimbabwe (aborted since 1998) and elsewhere (distorted by financial sector de-regulation and fraudulent practices for years); land acquisition/compensation experiences in Zimbabwe and internationally; and donor resource mobilisation for land acquisition/compensation. The most critical challenge will be collecting representative and honest data samples of the movable and immovable assets lost or being claimed for.


In terms of the process for this and other studies, we are concerned that:

  • The proposed studies have too short a time frame
  • Too many issues are bundled into a single study
  • This initiative overlaps with others commissioned by other groups (e.g. UNDP)
  • A lack of coordination exists across studies and policy discussions
  • There is little attempt to draw on existing and on-going research efforts in this area
  • The real issues of data availability/quality are not addressed
  • Links with the new government appear to be poor
  • An external, donor-led and expert-based approach is advocated
  • No opportunities for wider stakeholder (including between government and donors, but also critically with civil society groups and farmers’ organisations) are proposed

For all these reasons we urge the multi-donor task force to take a more strategic and longer-term approach in supporting research-based policy development with the new government. There is a real danger that in this crucial area of land and agricultural policy a series of limited and overlapping (perhaps contradictory) proposals and plans will emerge. This surely is the moment to avoid the repeats of past failures in this area.

Appendix 1: Commentary on the land ToR

Below are some specific comments on the ToR which substantiate and justify the comments above. Each section refers to a different section, and starts with an italicised extract from the ToR.

Commercial agriculture

The agriculture sector has historically been the largest formal employer and contributed significantly to foreign currency earnings of the country from cash crops such as tobacco, coffee, horticulture, cotton and livestock products. These products, apart from cotton, were produced largely by the commercial agriculture sector.

While this is true, no one has ever done a full economic evaluation of commercial agriculture accounting for the full historic subsidy and the opportunity costs of its operation. Certainly assessment of land underutilisation in the late 1990s demonstrated a substantial level of land use inefficiency in the context of high demand. While some areas of commercial agriculture thrived with high commodity prices and trade support policies (through the ACP agreement, for example), these conditions have been substantially threatened in recent years. Recalling the apparent successes of the 1990s and extrapolating to the present is inappropriate.

Perhaps the key lesson to draw from the last few decades is from the cotton story. Here a combination of measured liberalisation and sustained support managed to sustain a high value and competitive cotton industry, largely based on smallholder production. This has persisted through the disruptions of the recent years.

The importance of formal employment in commercial agriculture is undoubted, and the consequences of land reform for farm workers’ livelihoods in some areas have been dire. But this must be put in context. First, the informal employment generated by smallholder agriculture – as in the communal areas or resettlement areas – amounts to many more jobs, even if part-time contributions to overall livelihoods. Second, the conditions of employment and wage levels of farm workers were often appalling, something that has been well documented by labour unions, NGOs and rights groups in the past.

Food self-sufficiency

Until 2000 Zimbabwe had largely been food self sufficient…. Following the fast track land reform the country, due to the disruption in the farming sector and adverse weather conditions, has not been able to meet its food requirements, and has remained reliant on humanitarian and commercial food imports to meet the national food deficit.

This section gives a false impression that all was well before fast-track land reform. This is patently not the case. While not denying the extreme food insecurity of the last few years, it is simply not the case that Zimbabwe was ‘largely’ (tellingly the earlier version of the ToR had this as ‘always’) self-sufficient before 2000. Although food aid/relief patterns are distorted by electoral cycles throughout the 1990s, there were significant imports of food (beyond the usual pattern of wheat imports annually) in most years. During the 1992 drought this amounted to more than the food import requirements of recent years.

Tenure and investment

The acquired land was under freehold with the attendant title deeds, which have not been ceded to the government. This has resulted in uncertainty to both the former commercial farmers and the newly resettled farmers. The study will therefore: Assess the tenure security of the new farmers so as to ensure that they can meaningfully invest in the land and infrastructure, and access credit for both recurrent and capital expenditures; assess the instruments (lease, permit, offer letters etc) for entitlement by the beneficiaries of the FTLRP and determine whether they provide sufficiently incentives to the new farmers to invest on the land.

Ensuring secure access to land is clearly a vital aspect of post-land reform policy. But the assumption that the freehold model is the only route has been extensively challenged, both in Zimbabwe and beyond. There are many other routes to ensuring secure tenure arrangements, including permits, leases and other mechanisms. How these are exchanged and enforced are critical issues, but this requires a broader understanding of rural tenure beyond the simple legal-administrative instruments. Tenure security in a particular place emerges through wider social, institutional and political processes, based on the nature of local authority and the relationship between local land users and the state (or other sources of authority). In the recent Zimbabwean context this has been highly uncertain in some areas, with some major consequences for production and livelihoods. Yet in other areas – with the same legal-administrative basis for tenure, involving perhaps only permits to occupy – land users have felt highly secure, engaging in substantial private investment in new lands. Any study needs to appreciate the social basis for tenure security and focus on the institutional issues (including legal-administrative instruments, but not exclusively so).

The link between tenure security and investment is of course much discussed and highly disputed. Again, a case study based investigation may be illuminating. But investment in the new farms has been constrained in the last 9 years by other factors, going way beyond tenure issues. In particular the economic conditions – and particularly the failure of financial and credit institutions – has been the key factor. In most cases this has far exceeded any concerns new farmers have about tenure issues.

However, this is not universally the case, and any study should look at these examples. For instance, a number of new resettlement areas have not been granted permits to occupy and their status remains uncertain. Equally, in areas where new settlers have established farms there have been attempts at land consolidation by politically powerful actors which have undermined a sense of security, and resulted in a number of evictions. A focused study on these issues would be an important part of the overall picture, but cannot be collapsed into a generic look at tenure and investment.

Boundaries and demarcation

Most acquired large farms have been parcelled out into small units and redistributed to beneficiaries, but without appropriate boundaries being surveyed and marked. Boundary disputes among the beneficiaries have arisen in many instances as a result of this. Therefore: Assess the state of the land administration and registration institutions and make recommendations for improvements; recommend options that can be employed to speed up the surveying and registering the allocated plots so as to minimise conflicts over boundaries among newly resettled farmers.

Research in the new resettlements suggests that – particularly for A1 farms – this diagnosis may not be correct, and that the proposed solution may make matters worse. While there are disputes over boundaries, these are not going to be solved by surveying and registering. Some of the most acute boundary disputes are between A1 and A2 areas, where the boundaries are well known. These disputes will only be resolved when a more integrated development effort takes place, which seeks to integrate farm and wider economic activity on a territorial basis across A1 and A2 units in a particular area. A cadastral survey approach will not help. Such an approach will be particularly disruptive within A1 areas, whether villagised or self-contained. Again boundaries and plot allocations are well known within these new communities, but the institutional mechanisms for addressing land management and allocation questions are still evolving. Again, rather than a register and survey approach, support for village-level institutional development will be required, along the lines first discussed in the 1994 Land Tenure Commission.

Holding size

In the land redistribution these land holdings have been fragmented such that the economies of scale for viability have been compromised. Therefore: Assess the requirements for the rehabilitation of the agriculture production and processing infrastructure; assess the capacity of the new farmers to provide sufficient throughput for viability utilising the agriculture production and processing infrastructure; recommend the modalities through which the new farmers can fully utilise the existing infrastructure for agriculture production and processing.

The opening statement of this section can be highly disputed. The assumption here is that the large scale units of the past were viable due to economies of scale. The notion of viability is widely used, but very poorly understood in this context. We must ask: viability of what, and for whom? With a new agrarian landscape, with new beneficiaries of rural production, new structures of production will become more relevant. Viability will thus have to be redefined in relation to new users, new needs and new production systems. As much evidence shows, small-scale farm systems can be highly efficient – and viable – given the right conditions. The challenge now is to produce these conditions, and not engage in a convoluted and circular argument that, since certain infrastructures (for production, processing etc.) existed historically, then viability must be reconstructed around these.

Shared infrastructure

Determine how best the infrastructure can be shared among the new farmers and make recommendations on how to ensure that shared infrastructure is accessed by farmers that need to so as ensure optimum throughput and maintenance of same;

This section offers a similar perspective, based on the highly problematic notion that existing infrastructure should underpin new production systems in the post land reform era. While there are clearly transition questions, a longer-term strategy which sees a reconfiguring of infrastructure needs and investments is required. Of course only certain (large-scale) operations can make use of, for example, centre-pivot irrigation or large tobacco barns or large-throughput export-focused abbatoirs, but the question arises: are these appropriate for the future? The future should not be defined by the past, but a strategic view about what makes sense in a new agrarian setting should be developed, without embedding assumptions about what is (or was) best for the past.

Land uptake

Land uptake by A2 farmers category has been particularly low, as well as that there are cases of multiple farm ownership, leading to low production on the farms. Therefore: Assess the level of production among the new farmers and identify the main causes for the low production among the majority in this group; advise on measures that will encourage either surrender of excess land or requirements to fully utilise the land productively, such as land tax.

This is unquestionably an important issue, and needs to be dealt with in a thorough and transparent land audit as proposed by the new government. A consultancy of this sort of course cannot do a land audit, but it could usefully suggest key issues for such an audit once it is launched. Low production in the A2 sector is of course due to a variety of factors which must be unpacked systematically. These are highly variable, and different across farms and regions. Establishing a functioning commercial farm enterprise in the last 9 years has been a virtually impossible task, given the collapse of the economy, the lack of credit and hyperinflation. Those who have managed to do anything have done so under major challenges. Looking at success stories may be a useful way into this question, as well as looking at the challenges faced. Here a sampling that encompasses larger A1 self-contained farms might be fruitful, as the blurring between A2 and A1 in many areas has been significant.

It is important to recognise that the new agrarian structure is not quite as the Fast Track programme planned. Indeed the variation in holding size is large, and not neatly segregated into farm models, as the plans and much policy discussion suggest. The ToR falls into this trap, limiting the opportunity to have a wider discussion about the implications of the new agrarian structure (varied by region) for broader development trajectories. Key questions include: what are the interactions between farms of different sizes within an area? What policy instruments can facilitate land expansion or disposal; what informal rental/market mechanisms are in place already? How can a more flexible system of land owning (beyond fixed models, and accepting the de facto reality) be encouraged that allows successful farmers to expand, while others to move out of farming? How might this work at the same time as protecting land assets as insurance and sources of social protection?

Compensation

Assess modalities that can be put in place to ensure that the former commercial farmers are adequately compensated for the land that has been acquired by the government for redistribution; recommend the way forward on compensation for improvements on the acquired farms and compensation for the acquired land;

As discussed above, this is a highly complex issue which is ill-served by bundling it with the wider questions of land reform and post-settlement support. With the lack of basic data on prices (of land or other assets), setting appropriate compensation levels will be a major challenge. With the recent period of hyperinflation, the fraudulent practices evident in the financial sector and much dispute about the value of farm production and farm assets, there will be no easy resolution to this issue. Other claims for compensation for personal disruption or emotional disturbance, while potentially legitimate, open up a wider set of questions of what aspects might be legitimately open to compensation claims. A look at regional and international experience would be an important first step in establishing some options and alternatives.

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