Private funding has improved Zimbabwe wheat productivity

THE 2020 winter production was entirely funded by private players and the improvement in both gross output and productivity (yield per hectare) has been very significant.  

Government  set an average target of 5.2 tonnes per hectare (ha) for the 2020 winter wheat production, a 30% increase from an average of 4 tonnes per ha.

Contract growers funded by commercial banks were expected to increase productivity to 5 tonnes per ha while private sector-funded growers were expected to ramp up productivity to 6 tonnes per ha. 

As at the beginning of December, 190 000 tonnes had been delivered to the Grain Marketing Board (GMB).

The Agriculture ministry projects that 200 000 to 220 000 tonnes of wheat will be delivered. This output exceeds the post-land reform programme’s highest ever delivery of 164 000 tonnes, an improvement of 15.8%.

The 2019-2020 season produced a measly 90 000 tonnes. The 190 000 tonnes delivered to the GMB by 30 November represents a 111% increase. 

The amount of land under wheat this year increased by 83.5% from 24 186 ha to 44 399 ha. 

When the winter wheat programme was launched in April, the national target was set at 416 000 tonnes.

The projected wheat delivery of 200 000 to 220 000 tonnes is 108% below the set target of 416 000 tonnes. In terms of hectarage, 80 000 ha were set as the target.

The 44 399 ha achieved is 80% below the target. In terms of projected productivity, 4.5 to 4.95 tonnes per ha is expected, which is 5% to 15.5% below the 5.2 tonnes per ha target. 

The policy to have wheat farming being privately funded was the right move.

Although the government still has provided guarantees for the loans farmers got from commercial farmers who were formerly under the Command Agriculture scheme, the move seems to have attracted better farmers as the average yields have improved by between12.5% and 23.7%.  

It is still short of the differentiated productivity targets of 6 tonnes per ha set for the contract farming growers.

What is worrying is the 80% shortfall on the total hectarage target.

More work needs to be done to incentivise farmers to increase the land under winter wheat–this entails assistance with developing and upgrading irrigation infrastructure.

If secure land tenure were to be given, more farmers with an agri-business perspective would be more willing to take the risks associated with winter wheat production.

Increased wheat production will generate some import savings. At US$198 per tonne on the world market, the 200 000 to 220 000 tonnes projected wheat deliveries to the GMB, import savings of between US$22 million to US$26 million will be gained over last year’s figures.

Granted, the type of wheat we produce here in Zimbabwe is not suitable for certain confectionery needs, the savings that will result by way of improved wheat output through import substitution is significant. 
We can learn from the world’s most productive wheat producers.

The world’s most productive wheat-producing nations have a mixture of freehold and leasehold land tenure.

These two types of tenure engender security of investment, not because of the type , but as a result of trust in the policy framework that has a track record of years of consistency.

Trust restoration is critical in further boosting and sustaining private sector-anchored funding for production–it will attract more skilled producers who will have enough confidence to invest long-term. 

Zambia produces 6 tonnes per ha over 24 000 ha, making Zambia, jointly with seven other countries/national groups (Namibia, Saudi Arabia, Switzerland, Chile, China, EU-27 and Egypt), the world’s second most  productive wheat-growing nation. Zimbabwe’s wheat-growing ambition is to catapult itself to this illustrious league.

The most productive wheat-growing nation is New Zealand, at 9 tonnes per ha. There are nuances to be noted. 

The top yields per ha for maize as per the current global production records happen over a lower hectarage.

New Zealand achieves its 9 tonnes per ha over 45 000 ha. Zambia produces its 6 tonnes per ha over 24 000 tonnes.

This is largely due to the skill and knowledge Zambia gained from former Zimbabwean farmers.
Namibia produces its 6 tonnes per ha on 1 000 ha.

Saudi Arabia produces its 6 tonnes per ha over  120 000 ha; this is due to its high-tech methods enabled by petro-dollars.

Switzerland achieves its 6 tonnes per ha over 90 000 ha; this is as a result of a combination of high-tech and a relatively small area.

Chile produces its 6 tonnes per ha over 230 000 ha; this is due to the natural grasslands, accumulated knowledge and modern technology. 

China produces its 6 tonnes per ha from 23 730 000 ha; this is testament to its traditional expertise in grasses, combined with high tech and research.

The EU-27 achieves its 6 tonnes per ha over 26 065 000 ha, the result of high tech, research, advanced methods and good funding.

A competitive investment environment supported by a highly trusted property rights regime will attract the right brains and technology. 

Egypt achieves its 6 tonnes per ha over 1 370 000 ha; this is a result of abundant irrigation, accumulated knowledge and research.

Security of investment underwritten by a renewed bond of trust will attract long-term funders to undertake critical infrastructural development such as irrigation.

It is one thing to invest in irrigation infrastructure and another one to maintain the infrastructure.

Private risk takers have the incentive to maintain irrigation infrastructure to keep their agricultural assets in top condition.

The greater role of the private sector in the broader agricultural funding matrix is critical. 

Zambia can particularly be a good benchmark. Zambia has a leasehold system of land tenure – it is accepted as a basis for lending.

We need to learn from the Zambians what makes their leasehold system work. From New Zealand we can learn how they manage to produce 9 tonnes per ha with almost the same hectarage we used for wheat in 2020. 

With the right policies that underwrite security of investment, the wheat production sector in Zimbabwe has the potential to improve both in terms of total output and productivity.

The shift to private funding for the 2020 wheat production has shown how allowing the private sector take the lead in supporting agribusiness can raise both output and productivity.

Brett is a management consultant and a classic grounded theory researcher who has published research in an academic peer reviewed international journal. He can be contacted through email: [email protected]