Parastatals… graveyards of good intent?

Source: Parastatals… graveyards of good intent? | The Financial Gazette May 18, 2017

THE perennial problem of poor agricultural production will not be solved by the creation of new parastatals, but having in place sound policies that promote investment in the sensitive sector, economic analysts pointed out this week.

Last week, Agriculture, Mechanisation and Irrigation Development Minister, Joseph Made, announced the formation of two parastatals to drive the revival of irrigation systems and horticultural production at strategic farms countywide.

He revealed that the Agriculture, Mechanisation and Irrigation Development Authority would focus on irrigation development, while the National Horticulture Authority will spearhead the revival of the once vibrant horticulture sector.

Economist, John Robertson, said it would take more than just the creation of new parastatals for the agricultural sector to turn the corner.
“Government is supposed to be getting rid of parastatals, not starting new ones,” Robertson told the Financial Gazette.

“To revive agriculture, government has to do one thing only: Put land back into the market to restore ownership rights for the farmers and confer collateral value on the land. The parastatals are needed only to make up for the fact that the banks cannot lend to farmers who have no collateral. New parastatals will be far less effective than competent farmers who can do everything they need to do with financial support from the banks and the banks can do all that is necessary if they have marketable securities — title deeds — as collateral,” said Robertson.

In the case of the Agriculture, Mechanisation and Irrigation Development Authority, analysts wondered what new things it would do that government could not do under Made’s Ministry and through the Agricultural and Rural Development Authority (ARDA) which seems to be having serious challenges in upholding its mandate.

Formed under the Agricultural and Rural Development Authority, ARDA’s core mandate is: To plan, coordinate, implement, promote and assist agricultural development in Zimbabwe; to implement schemes for the betterment of agriculture in any part of Zimbabwe; and to plan, promote, co-ordinate and carry out schemes for the development, exploitation, utilisation, settlement or disposition of State land.
ARDA, which claims that its mandate is to serve as a buffer between Zimbabwean citizens and hunger, was formed through the merger of three pre-independence era organisations namely: Sabi Limpopo Authority (SLA), Tribal Trust Land Development Corporation (TILCOR) and the Agricultural Development Authority (ADA), but the authority is not different from the nearly 100 decrepit State-owned firms that have been more of liabilities than assets.

An agricultural expert, Peter Gambara told the Financial Gazette that while on paper the new parastatals would do what is expected of them, on the ground, they would only serve to add to the existing behemoths that only serve to provide employment for friends and relatives and nothing more.
“The idea of setting up these two parastatals is good on paper, but I doubt (that) they will have the desired effects. Firstly, they will not be adequately funded as usual and ARDA is a good example of a parastatal that was once very vibrant, but was run down to the point of being broke.

“Secondly, as is usually the case, the minister will appoint his home boys (vana Samanyika), to the boards and top management and, therefore, not the best people would run them. The end result is obvious. Those entrusted to run these parastatals also lack practical experience. For example, the mechanisation officers from this ministry, who are likely to be absorbed into one of these parastatals, went around promising farmers contracted on the Command Agriculture scheme that they would repair non-functional driers on the farms and make arrangements for combining the current maize crop, but up to now nothing has materialised. The irrigation officers from the same ministry also promised to provide extra laterals to farmers who either lost some to thieves or needed them to increase their areas, but again nothing has materialised. This tends to show lack of practical experience on the part of these officers or lack of funding from Treasury,” said Gambara.

He said the other problem was that parastatals, like those announced by Made, tend to concentrate their efforts on the big chefs, not professional farmers.
“For example, the RBZ (Reserve Bank of Zimbabwe) mechanisation scheme gave a lot of tractors and (other) equipment to a few big chefs. There are even cases of ssome senior government officials who got every piece of equipment and tractor model that was available and still have not touched some of that equipment up to this date,” Gambara added.

Another economist, Eddie Cross, said horticulture, being a long-term investment, can only grow if investors have security of tenure, something that the vagaries of Zimbabwe’s politics has failed to provide for close to two decades now.

“In my view, the new parastatals will not achieve anything substantive — perhaps to revive the Horticultural Promotion Council to work on the issues restraining progress. Horticulture will grow if investors have security of tenure — not otherwise. ARDA is a prime example — a complete failure which has now handed over their estates to private players to run. All they offer these investors, many of whom are white Zimbabweans, is protection from the State,” Cross noted.

Gambara pointed out that government’s lack of planning was evident in the on-going effort to re-enact the winter wheat version of the Command Agriculture, which is already in serious trouble.
“It’s only two weeks before the winter wheat planting period closes and yet a lot of issues (that impact negatively on wheat planting) are still not resolved. Therefore, rebranding these departments and start calling them parastatals will not change anything.

“It’s a way for the chefs to find ways of enriching themselves outside the public glare. I am not convinced that they will bring any meaningful change to the existing landscape,” said Gambara.
Since embarking on its controversial land reforms in 2000, which saw nearly 4 000 white commercial farmers being dispossessed of the land, agricultural production has plummeted in virtually all sectors and the country has been struggling to rebuild it.

Lack of sound economic policies has been compounded by severe lack of farming skills among the bulk of the beneficiaries of the land reform programme.

This has not been made better by a culture of freebies among most farmers, both communal and commercial, who expect government to provide them with everything, a weakness that is worsened by the culture of not repaying loans.

Most of the infrastructure that government is trying to rebuild was vandalised and looted during many years of chaos during the agrarian reforms.