Why the Land Compensation Fund cannot be funded by rent

The bankrupt Zimbabwean government is under mounting pressure to compensate dispossessed white commercial farmers. Since it needs to gain access to international funding and loans, the government announced in March this year that it was establishing a “Land Compensation Fund”.

Source: Why the Land Compensation Fund cannot be funded by rent – The Zimbabwean 30.08.2016

The purpose of the fund, Mugabe government claims, is to “provide resources for the payment of compensation to former farm owners whose farms were acquired by the State under the Land Reform Programme, and to enhance productivity on allocated land.”

According to Finance Minister Patrick Chinamasa, the plan involves collecting an annual rent from the 300,000 families that government claims have been resettled on seized land.  The rental fee will be based on the size of the occupied farm or plot.

What this means in reality is that by starting the process of raising funds to compensate the title deed owners, the government will be able to claim that it now owns the farms it took – often brutally and even at gunpoint – from the commercial farmers.

A further function of the plan will be the funding of various Ministry of Lands activities – potentially an enormous money gobbler and open to yet more corruption.  These activities will include carrying out farm inspections (more massive vehicle expenditure) and undertaking valuations, as well as various other administrative and operational costs.

The third, and more bizarre function of the fund, is to “enhance productivity” on the farms by giving money back to the very same people who are expected to contribute to the fund.  The government has at last admitted that there is minimal productivity on most of the farms.  However, payment of rent and levies to the fund will potentially be cancelled by the allocation of financial assistance to the new farmers for enhanced productivity.

Given that agricultural output is a fraction of what it was prior to the unleashing of the farm invasions in 2000, new farmers face the perennial problem of not even able to buy seed or meet their water and electricity bills.  Consequently, they have warned government that they cannot contribute funds to compensate the former commercial farmers.

There is speculation that the government also intends to use money from the Land Compensation Fund for its US$500 million “command agriculture” scheme, announced in July.  Government has yet to explain how the command agriculture project will be funded.

Although most white commercial farmers have been forced off the land, there are a few low profile white farmers who are managing to continue farming by renting land from the people who have taken it over.  Such ventures, however, are fraught with problems.

For example, a court case is underway involving the Governor of Mashonaland Central province who has been extorting tens of thousands of dollars from the few white farmers in his province to allow them to continue farming.  This has been happening for years and the farmers are extremely vulnerable, as is anyone who pays “protection money” to a mafia.  Extortion is always prevalent in lawless states.

Only in Zimbabwe could a thief – in this case the government – rent out the land it has stolen to the very people it has stolen the property from, and then gather rent from them!

It is like the story of the mafia thief who stole a car, ran it into the ground and then rented that same car to its real owner to use as a taxi, while saying: “You must support our mafia system, or else we will take the car away from you again – with the repairs you have made and its full tank of fuel.”

Such a scenario leads only to broken cars.  And broken cars generate less and less money in the taxi rank as they become more and more dilapidated.

In the same way in Zimbabwe, farms get taken, they get stripped and ruined, and then those who have asset-stripped the properties are required to generate money to pay into a fund while receiving back money in order to “enhance productivity.”

But there’s also a catch!  At any time, as happens regularly to people who fall foul of ZANU PF – or people who have a bigger “chef” wanting the farm or plot of land they occupy, the Permanent Secretary can cancel the “offer letter” or the lease, and the beneficiary has to then leave the property.

Sadly, the former commercial farms are now in a shocking state of disrepair.  The dams have not been maintained, many of the pipelines have been dug up, the transformers have been stolen, houses and barns have been taken down and their roofs, doors, window frames and bricks have been sold off.  Fence lines have vanished, fires have raged unchecked through the land and thorn trees have grown up in the once productive fields.

Many older generation white commercial farmers who were excellent, dedicated farmers are now unable to even put bread on the table for themselves.  Such men are living on whatever help they can get from family and friends.  If these dedicated and competent farmers were still out there, they would be growing thousands of tons of produce each year.  Today their farms – their life’s work – are derelict wrecks, their workers are unemployed, their skills are being wasted and there is no one they are able to pass on those skills to.  It is shameful that they are struggling to survive and that the country is reliant on international food aid – as it has been since 2001.

This year a third of the population of Zimbabwe – 4 million people – need Western food aid.  How can these very same hungry people, who have failed so abysmally on the farms and cannot feed themselves, be expected to pay money to government for a compensation fund?  Everyone knows that it simply will not happen!  The compensation fund will cost more to administer – with its ubiquitous new cars and suited “jobs for the boys” officials than the few dollars that will be collected.

When we were still out there on the land, I remember the Rural Councils from the commercial farming areas amalgamating with the District Councils from the communal areas in the 1990s.  The Rural Councils used to have a tax collection rate from the commercial farmers of well over 90 percent.  This money funded schools, clinics, roads and other services.  Every week the mobile clinic used to come around to each farm and assist people who were sick.  It hasn’t run for a single week for a couple of decades now.

In the communal areas, I remember the tax collection rate in the ‘90s was a paltry 6 percent.  Why? Because the communal areas did not have title deeds to develop the land and generate the money.  As a result the roads, clinics and other infrastructure had to be run with money from the next door commercial farming areas which had title deeds.

Nowadays, with the land on the adjoining commercial farms having been nationalised by the government, the former commercial farm workers, who used to contribute to feeding the region, are themselves hungry and desperate.

The beneficiaries on the nationalised farms have about as much chance of paying any meaningful money into a compensation fund as a diminutive Shetland pony has of winning the annual Grand National hunt horse race at Aintree in England.

Just as a Shetland pony will never be able to jump the 30 large, spruce-topped fences because it doesn’t have the legs for it, so peasant farming without title to the land will never feed the nation.   Title deeds are the “legs” the horse needs for clearing the jumps, and it must also have a skilled rider.

The “winning horse” in agriculture is the farm with title deeds.  The solution for Zimbabwe is simple:

1. Title deeds must be allocated for all agricultural land.
2. Government needs to recognise the title deed owners of the commercial farms and restore the ownership to them.  They must then be given the option of returning to their farms or selling them at a market-related value based on their condition prior to the takeovers.
3. Government needs to reinstate the title deeds for farms that were bought by government in the 1980s and 1990s– most of which are no longer productive – and make the farms available on the open market for individuals to buy.
4. Government needs to provide title deeds for the communal areas so that individual communal people can use the land for collateral and invest in it without the threat of its being withdrawn should they fail to support the ruling party.

The reality, however, is that the ZANU PF government does not want to empower its citizens by enabling them to own their own farms.  ZANU PF’s strategy since independence has been to control the rural people, who constitute around 70 percent of the vote, by keeping them disempowered and forced through fear to vote for the party.

So long as this is the case, the farms will remain unproductive, the title deed owners of those farms will remain uncompensated, the people will remain hungry and the bankrupt economy will continue to lurch from crisis to crisis.

Ben Freeth is the executive director of the Mike Campbell Foundation and the spokesperson for SADC Tribunal Rights Watch.