Bad credit adds to Zim’s food insecurity

via Bad credit adds to Zim’s food insecurity – NewsDay December 31, 2013

THE drying-up of credit lines to the Zimbabwean government, apparent donor fatigue and a determined stand against genetically modified foods are pushing  up the price of the staple grain, maize, by nearly a third in some drought-hit areas compared to a year ago, according to humanitarian organisations and economists.

The September 2013 Vulnerability Assessment Committee (VAC) estimated that 2,2 million people would require food assistance before the March 2014 harvest. Zimbabwe food shortages are attributed to several factors by the United States-based Famine Early Warning System (FEWSNET), including the late arrival of the rains, flooding, poor rainfall distribution and an army worm infestation.

“Communities, particularly rural ones, are facing a twin evil: food is scarce, and that tends to push prices up. The government has no money to import enough grain so that people can buy it at subsidised levels. The hungry are therefore forced to buy from private sellers, who charge high prices,” Innocent Makwiramiti, an economist and former chief executive officer of the Zimbabwe National Chamber of Commerce, said.

FEWSNET said in its Zimbabwe food security outlook covering October 2013 to March 2014 that “prices for both maize meal and maize grain have been increasing”, with higher costs in monitored areas ranging between seven and 30%, caused by “increased demand by many households as cereal stocks from own production finished earlier than in normal years”.

“National average maize grain and meal are approximately 20% higher than last year (2012), and 30% higher than the four-year average. Prices are ranging from 10 to 20% above the national average in deficit areas,” the report said.

Economist Eric Bloch said: “Prices could have been higher were the humanitarian community not helping with food hand-outs, but who does not know that they are also affected by donor fatigue and their contributions are thus limited? The private sector sells at exorbitant prices.”

According to the United Nations World Food Programme (WFP) market monitor for October 2013, there is increasing demand for food due to shortages, as only 11% of rural households are able to meet their own food requirements.

“As a matter of fact, most markets in the maize production areas have reached abnormally high price levels during the quarter July-September, with prices high in areas that had poor yields,” the WFP monitor noted.

The situation is described by the VAC as the worst food insecurity since 2009. In the past, the government has been able to buffer against food inflation by importing grain from Zambia on credit. In 2002/03, more than seven million people were in need of food aid, while in the first quarter of 2009 seven million required food assistance.

However, in October 2013 the agriculture minister, Joseph Made, told Parliament the Zambian government had reversed its decision and wanted cash up front for the 150 000 tonnes of maize it had previously committed on credit. Made said Zimbabwe had up to then managed to secure only 14 000 tonnes, which it had distributed to the state-run Grain Marketing Board (GMB) depots throughout the country.

Low yields over the years have been blamed on drought and the subsequent vulnerability of widespread rain fed farming practices, as well as poor access to agricultural inputs.

“The removal of the maize credit facility by Zambia puts Zimbabwe in a quandary, because it means that the government will not be able to feed the nation and food distribution will entirely be the preserve of the private sector,” Bloch said.

“It cannot enter into a major agreement with South Africa, for instance, because that country is producing GMO (genetically modified organism) maize that Zimbabwe does not want. Also, because the government has a poor credit rating internationally, it would be difficult for it to convince other nations such as Tanzania, Kenya and Uganda to lend it maize and other forms of food.”

He said the current political crisis in neighbouring Mozambique since the Renamo Movement pulled out of the government and returned to the bush, threatening to reignite the civil war that ended in 1992, could only minimally affect grain imports by the private sector, which are transported from the port city of Beira.

“I don’t think there are significant imports of maize by private players coming through Mozambique, but if the civil unrest in that country escalates, that would disturb the flow of oil through the Feruka pipeline. Reduced supplies of the commodity here (in Zimbabwe) are likely to push prices of many things, maize included, up because they need to be transported using fuel,” said Bloch.
The WFP said it had budgeted $86 million to procure food for the lean season between January and March 2014, but it was facing donor shortfalls.

“Despite generous contributions from USA, UK, Japan, Australia, CERF (the UN Central Emergency Response Fund) and the European Union, WFP is facing significant funding constraints and will not be able to scale up assistance without additional funds,” said Victoria Cavanagh of WFP, who added that the agency was “working closely with the government and donors to mobilise more resources”.

WFP is targeting 72 000 metric tonnes of food for distribution to 41 of the worst affected districts in Matabeleland South and North, Midlands and Manicaland provinces, working together with various institutions that include Plan International, CARE, World Vision, Lutheran Development Services, Christian Care and Africare.
Because of the government’s inability to pay for maize imports and a poor response from farmers, the GMB’s strategic reserves have dwindled to less than 20 000 metric tonnes.

GMB’s communications manager, Muriel Zemura, said Zimbabwe was only sourcing maize from Zambia and had received none from South Africa, but was optimistic maize imports from Zambia would improve stocks.
“The imports from Zambia will sustain the country, although we believe that there are some farmers locally who have the maize that we require but are holding on to it because of the time taken to pay them once they deliver to us. We need to incentivize such farmers by paying promptly and, this way, deliveries to us will improve,” she said.

Charles Taffs, the Commercial Farmers’ Union president, said Zimbabwe’s reliance on other countries for imports would be compromised by shortages in neighbouring countries.

“We are facing a serious crisis because there is a regional deficit even in Zambia itself. South Africa is facing a critical rain water shortage, and all these countries will first consider domestic needs before looking at us. And the fact that we are broke does not make our case better,” Taffs said.

“The blame lies with the government. We have more than
4 000 dams that we should have used to harvest rainwater for irrigation, but nothing of that sort has happened,” he said.