Beef value chains in A2 resettled farms in Zimbabwe: A review

P Nkomboni and S Beekman¹

Matopos Research Institute, P Bag K5137, Bulawayo, Zimbabwe
pnkomboni@gmail.com
¹ Van Hall Larenstein University of Applied Sciences, P. O. Box 411, 6700AK, Wageningen the Netherlands

Abstract

The livestock sector in Zimbabwe has changed with the redistributive land reform programme. Land was distributed under two establishment models the A1 and the A2. Whilst A1 farmers are under common grazing and operate same as smallholder farmers, A2 resettled farmers were and are supposed to carry out and revive the commercial farming activities. Land redistribution was done with the objective of giving land to the landless; however, questions arise as to how this programme affected or influenced the beef value chains. The distribution of the fast track land reform programme shaped and restructured beef value chains in such a way that there was an entrance and egression of different chain actors.

This review evaluates beef value chains in the A2 farms with reference to former commercial farms, how their entrance has changed market trend, chain actors, chain supporters and all the other stakeholders involved in the beef value chains.

Key words: land reform, resettled farmers, value chain analysis

Introduction

The livestock sector in Zimbabwe has undergone major changes since the turn of the 21st century and has been restructured with the process of the Fast Track Land reform Programme (FTLRP). This programme was implemented between 2000 and 2002 and was termed ‘an agrarian revolution’ (Moyo 2011). The FTLRP established two models of resettlement: the Model A1, in which each household was allocated arable land, with shared grazing. This model meant to decongest communal areas and focused on village arrangements (Moyo 2011). Model A2 schemes were based on small, medium and large-scale commercial farms with 99-year leases (Moyo 2011).The A2 farming model focused on commercial production at a slightly larger scale than the A1 farms (Sibanda et al 2014). In principle, model A2 targeted at any Zimbabwean citizen who could prove that they had farming experience and/or resource available. It was based on the concept of full cost recovery from the beneficiary (FAO 2005).

The key issue for distribution of land was giving land to the black landless Zimbabwean people. Research has been done on the effects of FTLRP on the agricultural production and fate of previous farm worker and farm owners. However, questions remain on its success:

1. Does land redistribution answer the issues of the growing integration of the global economy and modern markets which are complex, highly dynamic and respond quickly to price changes, consumer demands and technological opportunities?

2. What is the productivity of the new resettled farms?

3. Did it contribute any change to the beef sector in terms of productivity and players involved?

4. Has the land redistribution programme allowed for value addition or value destruction?

5. Do the current legal structure pertaining to land tenure support commercial agriculture?

This paper therefore seeks to evaluate issues underlying these questions and provide a framework for linking land redistribution with value chain analysis (VCA). A VCA can be used as a potential analytical tool to show effects of the FTLRP in the beef production sector. Value chains (VC) are important in enabling the understanding of competitiveness of producers, mapping flow of inputs, goods and services and who plays an important role in the success of that value chain. This paper provides a background of land redistribution, its effects on beef and beef products production and how the VC context can be a potential analysis of the effects of land redistribution on beef production in the commercial sector.

Land reform in Zimbabwe

Land reform in this study and context is according to Bernstein (2002) the statutory division of agricultural land and its re-allocation to the landless people of Zimbabwe. Land reform consists of measures aimed at a more equitable and fair distribution of agricultural land for sustainable use. It is also defined by Mushunje (2005), as the redistribution of land, regardless of what is produced on that land to the landless and farmers, irrespective of tenure arrangement to improve the economic status of the beneficiaries. In essence it alters the roles of various agrarian classes and is said to improve the developmental capabilities of farmers and the developmental capacity of a nation as a whole. Land ownership lies at the heart of the economic performance of Zimbabwe. Since 1998, the land issue has become the most important factor in the agricultural performance of Zimbabwe (Mushunje 2005). Land redistribution was triggered by the need to readdress the unequal distribution of land resulting from the pre 1980 colonialism era and to enhance the production potential of communal farmers. According to Thomas (2010), the purpose of the most recent land redistribution programme (FTLRP)) in Zimbabwe was to maximise agricultural production of under-utilised barren commercial farm land to fulfil its productive potential. The Zimbabwean land reform involved restructuring of access to land, and an overall transformation of the existing farming system, institutions and structures (GoZ 2014). The process involved enabling access to markets, credit, training and access to social, developmental and economic amenities and sought to enhance agricultural productivity, leading to industrial and economic empowerment and macro-economic growth (GoZ 2014). The design of this agrarian reform strategy was bimodal where two main models (A1 and A2) have been at the center of the land redistribution process.

Resettlement models that affected beef production systems

The GoZ employed several criteria in selecting beneficiaries for post-independence resettlement. Even though the method of land redistribution, acquisition and beneficiary selection and resettlement were changed to command driven in the FTLRP, resettlement took place after an applicant had successfully completed the steps required to determine eligibility. The beneficiaries of the FTLRP were settled using two distribution models, namely the A1 and A2 models (Sibanda et al 2014).

A1 Farming model

The A1 model was an accelerated but structured intensive resettlement programme where land was divided for communal arable and grazing. This model meant to decongest communal areas. It focused on smallholder production where village arrangements or small, self-contained farms averaging 3-7ha for cultivation with shared grazing depending on region were allocated to farmers. The A1 model promoted small–scale family farms and farms in this type of land redistribution model make up for 70% of the total transferred land (Chiremba and Masters 2003).

A2 Farming model

The second model focused on commercial production at a larger scale and were termed A2 model. The A2 model was a normal intensive resettlement characterised by individualised ownership with land holdings ranging from 100 to 1500ha depending on region (Sibanda et al 2014). Model A2 farms were categorised into small, medium, large scale commercial settlement schemes that included some peri -urban areas. The land was subdivided to suit various agro-ecological zones covering different farming systems, plantations, conservancy and agricultural land under crop and livestock (Moyo 2011). Land redistribution under this model required the applicants show evidence of access to enough capital and considerable agricultural knowledge to develop the farms into viable enterprises (Chiremba and Masters 2003). Having demonstrated the ability to repay the cost of the farm, successful applicants were provided with leases with the option to purchase. The main purpose of these much larger A2 farms was to replicate the large-scale commercial farms of the past, (Moyo 2011), and the larger grazing areas allowed more cattle to be kept per unit area. New resettlement areas thus provide a new opportunity to revive the beef production enterprise in Zimbabwe.

Effects of land redistribution on beef value chains

In Zimbabwe beef cattle farming constitutes a significant proportion of agricultural activities and contributes to the sustenance of the rural populations. Before the fast track land reform period Zimbabwe had been operating under a dualistic production system which comprised of large scale commercial farmers and the smallholder sub-sector. It divided Zimbabwe’s beef farming into a large-scale (LS) sector owned mostly farmers of European origin and a small-scale (SS) sector controlled by indigenous people (Mushunje 2005). The two sub-sectors employed different systems of production with different breeds, stocking rates, range management approaches and uses for cattle (Moyo 2005). In the commercial sector cattle were grazed on fenced grazing land where range conservation and herd improvement measures were taken. A higher technical efficiency was and is obtained in this type of farming system (Chiremba and Masters 2005). A2 resettled farmers observe this type of management as each farm has privatised grazing and management is solely under the farm owner. Former state support in terms of loans and subsidies on agricultural inputs was focused on the commercial beef sector.

The restructured agrarian conditions in Zimbabwe created by the post-2000 land reform have resulted in the country undergoing major changes of the beef industry and the livestock sector in general. It is casually assumed that Zimbabwe’s agriculture was destroyed, and the cause of the collapse was the fast track land reform. All of Zimbabwe’s economic and farming woes are ascribed to the displacement of former large scale commercial farmers (Moyo 2011). The transformation has been in terms of producer base, livestock ownership, numbers and marketing structure (Mavedzenge et al 2008). This has resulted in significant shifts in ownership, use and management of livestock, with concomitant effects on animal disease management, marketing and production. Empirical data shows that there has been a marked decline in commercial beef and dairy cattle production when compared to the pre-2000 period (Scoones et al 2011). Beef value chains are linked to and influenced by market systems, political systems, natural environment, farming systems, infrastructural systems, legal and regulatory, financial, global trade and social systems (FAO 2014). Changes in ownership, cattle numbers, production and marketing structures brought about by the land reform programme therefore has influenced, changed and or affected the beef value chains as it changes the type of actors involved in these chains. Different linkages have been formed between different actors and stakeholders (Mevedzenge et al 2008). The most common argument against land redistribution was that the new owners of land will not improve the land and are incapable of running their own farms and neither are they able to conserve their land (Mushunje 2005). Some debate on effects of land redistribution by some sociologists and economic analysts have led people to believe that the some of the resettled farmers take farming as a hobby and do not take it seriously as a commercial business (Moyo and Nyoni 2012). Sentimental value is attached to land instead of the commercial value it deserves. Sadly, this fall has led some people to suggest that black Zimbabweans are generally incapable of farming (Moyo and Nyoni 2012). These perceptions have a bearing on how the value chain function as a process as every actor and all activities in a chain are interlinked. The perceptions of sociologists and agricultural economists are based on the arguments that the black indigenous farmers are characterized by the cattle complex, store of value paradigm, precautionary motive argument and the market structure conduct and performance prototype (Mushunje 2005). The cattle complex context in this study is explained by Herskovits (1926) where he defined it as a system in which cattle represent social status as well as wealth. This proposes that cattle are held as a store of value and are only sold to meet cash needs. The precautionary motive dictates that herds must be large in order to overcome uncertainties and natural disasters. The market structure, conduct and performance states that the high cattle numbers and low off-take rates are caused by market imperfections and infrastructural constraints (Mushunje 2005). Beef cattle farming is seen as an activity aimed at meeting various household and other needs rather than a commercial activity aimed at maximizing income and profit (Mushunje 2005). These concerns, habits of the resettled farmers and preferences determine and impact on the nature of the resultant beef value chains. The cultural belief lowers technical efficiency in beef cattle production, influences marketing decisions and subsequently off-take rates. Decisions on off-take are determined by a diversity of factors namely the availability of marketable surplus, land rights, access to factor markets and alternative sources of income (Mushunje 2005). Beef cattle production is however, affected by natural and socio-economic factors though at varying degrees in different sectors of production (Mashoko et al 2007).These factors allow for a measure in performance of value chains as well as an understanding of how the chains function.

Factors affecting beef production

Natural and production factors

These include topography, land area, climate soil and vegetation, diseases and pests, type of cattle and their ability to adapt to prevailing conditions and availability of water during droughts that influence carrying capacity of the grazing land (Mushunje 2005). Commercial farming has a high technical efficiency and recognizes range management and herd improvement technologies where stocking rates are adapted to the carrying capacity of the land and steps are taken to preserve the carrying capacity. Herd improvement activities like selection are practised to improve the herd potential (Mushunje et al 2003). Farmers in the commercial sector had clear and organized farming policies where animals were either finished in feedlots for the market or finished off veld.Much has also been written about the effect of the unpredictable weather conditions. In particular, recurrent droughts have been noted and are the causal for the poor state of agriculture. While the effects of drought cannot be dismissed, it is noted that commercial farmers had ways to deal with the drought such as building sufficient water reservoirs, developing crop varieties that are suitable for the conditions, planting pastures and conserving forages for the drought and dry seasons (newzimbabwe.com 2009). These and other mechanisms have been put to use in the history of commercial agriculture in Zimbabwe. The poor weather conditions are not new to Zimbabwe and while commercial agriculture has suffered during the bitter droughts such as in the early 80s and early 90s (newzimbabwe.com 2009), farmers generally managed to cope during other low rainfall seasons because of preparations made for such eventualities. The weather patterns are likely to remain unpredictable and the question is how does the FTLRP allow for the resettled farmers to learn how commercial agriculture devised ways of mitigating the effects of drought.

Economic factors

These entail the market organisations, transport facilities and distance to markets, slaughter and export facilities, markets and economically viable herd sizes (Mushunje et al 2003). Economic factors have a direct influence on beef cattle production as it affects efficiency and competitiveness.The enormous changes in Zimbabwe’s production and marketing environment necessitate paradigm shifts in management, inputs and marketing (Moyo and Nyoni 2013).

Questions arise as to how the FTLRP considers and appreciates the factors that made commercial farming successful before and how it affects the functionality of beef value chains. These questions require that it is asked what research was done to understand why and how commercial farming was viable and how commercial farmers functioned and participated in the beef value chains to better understand the current beef value chains, actors and supporters involved.

Sociological factors

These include the land rights, distribution of population, anthropological factors and extension services. The large-scale farming sector was complex and highly developed, with some of the best infrastructure and capabilities for farming being on a comparative basis with most of Africa (Mushunje et al 2003). The large commercial farmers of Zimbabwe were highly experienced with some of them having been 3rd or 4th generations of staying and working the land. Their skills in agriculture across the different enterprises (crop specialists, livestock breeders and producers and horticulture specialists) provided Zimbabwe with one of the most educated people in Africa (Mushunje et al 2003). Rukuni (1994) regarded this human resource as being key in the agricultural revolution before independence, despite a very difficult operational environment during the liberation struggle. This type of beef commercial farmer may or may not exist in the A2 farmers. The legal and financial framework before land redistribution was designed in such a way as to support agriculture from a business perspective. The legal structure enabled commercial farmers to pursue farming as a proper business as they had property rights. Proper title to land builds farmers personal responsibility for that property (newzimbabwe.com 2009).

Research and development has always been a major supporter of the beef value chain especially for big commercial farmers. The research stations around the country have done well in research and development to serve agriculture over the years (Practical Action n.d)

As with any industry it was realised that there is need to continually innovate and develop new ways in agriculture. The commercial farmers even had an important part to play in research and development as they would fund some activities which would culminate in the support given to them as farmers. The scale of farming has changed with the FTLRP as farmers now have smaller pieces of land (up to 1500ha as compared to the thousands of hectares old commercial farmers used to own) (Moyo 2011), smaller heads of cattle and are not funding any research activities in the country. It would however be reasonable to understand how research and development is supporting the resettled farmers through a value chain analysis. The extension model used does not add value to the farmers as the farmers expect free extension services and therefore, end up receiving poor quality service. Also the research scientists and experts in related industries have been driven away by the economic difficulties (Nyanga et al 2013) which even though were not brought about by the FTLRP alone have impacted greatly on expertise available to help the new upcoming resettled farmers (newzimbabwe.com 2009)

Livestock trends in Zimbabwe

The last authentic livestock census was done before the year 2000 with the Ministry of Agriculture, Mechanisation and Irrigation Development (MAMID) carrying out yearly crop and livestock assessment (ZIMVAC 2013). The economic situation of the country is a major constraint to proper livestock census. However, the beef cattle numbers have been constant at ± 5million animals for the past 10 years (table 1).

Beef marketing and trade

Trade liberalisation and domestic policies in Zimbabwe have had a large impact on the beef industry. These functions vary by commodity but in essence, it can be said that marketing is the “ complex pattern of institutions and physical facilities which relate to human beings and things in the transfer of goods and services” which means it has to consider the product, price, people and place (Scoones et al 2010). In marketing livestock products, various inherent difficulties are considered: perishability scattered supply, individual variability, multiplicity of uses, varied investment requirements and seasonality in trade (USAID, 2006). Various factors have affected the performance of agricultural exports and beef sector in particular. First, there was an outbreak of foot-and-mouth disease during 2001/2002 seasons. Second, the volatile political environment significantly affected export market to the EU (FAO 2003). Before the year 2000 and the FTLRP era, an annual average of US$43 million had been generated from fresh beef and beef by-products (Scoones et al 2010). There was a sharp decline of 93% between 2001 and 2002 due to outbreak of foot and mouth disease and also the alleged disruptive FTLRP. The beef industry in Zimbabwe has evolved through a highly subsidized state supported set of intervention. This has occurred across the beef value chain with subsidies ranging from production costs to markets. Market support focused on the state run Cold Storage Commission (now Cold Storage Company). Trade was then liberalized, and government support reduced (Scoones et al 2010). Market liberalization reforms led to a tremendous increase in agricultural production costs particularly for stock feeds, fertilizer, transport costs and agricultural equipment compared with prices of agricultural produce which in greater principle alters the chain functions and actors involved. Interest rates swelled and now constitute one of the largest components of production costs for commercial farmers (FAO 2003). Liberalization has also seen the emergent of small, private abattoirs and market outlets in the beef industry. Cold Storage commission which used to control trade in the livestock industry is now defunct (Scoones et al 2010). The hoped for diversification resulting from market reforms has not happened because of limiting appropriate technology options in the various farming regions, lack of access to capital, lack of markets, and limited farmer advisory services and the disruptive nature of land invasions (FAO 2003).

Concept of Value Chains

The livestock value chain (VC) describes the full range of activities which are required to bring a livestock product or service from conception, through the different phases of production (involving a combination of physical transformation and the input of various producer services), the delivery to final consumers, and final disposal after use. Focus is on market focused collaboration among different stakeholders who produce and market value added products (ILO 2009).

Value Chain Analysis (VCA)

Value chain analysis is a conceptual framework for mapping and categorizing economic processes. It helps to understand how and where enterprises are positioned in the economic processes. VCA enabled the identification of new business opportunities and possible leverage points for increasing competitiveness of enterprises, occupying new positions in a global VC or delivering to new markets and buyers. A VCA is done to characterize how chain activities are performed and to understand how value is created and shared among those who participate in a VC (FIAS 2007). It is defined by Kaplinsky and Morris (2001), as a method for accounting and presenting the value that is created in a product or service as it is changed from raw inputs to final product consumed by the end user. This type of analysis was developed by Porter in the mid-1980s as cited in (Vermuelen et al 2008) as an instrument for identifying the value of each step in the production. Porter argued that the sources cannot be detected by analysing a firm as a whole entity but rather should be disaggregated into series of activities (Vermuelen et al 2008). The activities were identified to be either primary activities that directly contribute to value addition or support activities that have an indirect effect on the final value of the product (FIAS 2007). Various dimensions are analysed in the value chain (Figure 1) in order to understand the markets, their relationships, the participation of different actors and the critical constraints that limit the growth of livestock production and consequently the competitiveness of farmers (ILO 2009). VCA involves the identification and mapping of relationships of four types of features namely:

• Activities performed during each stage of processing
• The value of inputs, processing time, outputs and value added.

· the spatial relationships such as distance and logistics of the activities

· the structure of economic agents such as input suppliers, producers, processors, wholesalers and retailers.

Figure 1. A general value chain; Source: ILO 2008.

VCs exhibit a variety of characteristics and impact in a variety of ways depending on how those value chains are governed. The concept is used to refer to the inter-firm relationships and institutional mechanisms through which non-market coordination of activities in the chain takes place (Humphrey and Schmitz 2001). A chain without governance is described as a string of market relations. Governance can be exercised in different ways, and different parts of the same chain can be governed in different ways (Humphrey and Schmitz 2001). Understanding the governance of the A2 resettled farmer beef value chains will help to understand the distribution of gains and profits along the chain. Governance, ensure arrangements that make possible the non-market coordination of activities.

Why value chain analysis is important for A2 resettled farmers?

The land reform programme of 2000 resulted in the egression of commercial beef cattle farmers and the entrance of new A2 resettled farmers. The A2 resettled farmers were expected to maintain and revive the commercial beef farming sector in Zimbabwe. However, there has been no significant improvement in the commercial beef farming sector. The old commercial farmers were known to participate in value chains and strived to provide products and services that were more valuable to customers. They were focused on competitive business arrangements and were able to deliver value to customers. The market is expanding from domestic markets to global markets where customer demands are increased in terms of quality and food safety. LSC farms were highly mechanized with resources being concentrated on their best and most conveniently located land. Also the LSC sector as a whole was more diversified than the current resettled farmers, including wildlife ranching as well as horticulture and many niche products, but individual LSC farmers tended to be more specialized. LSC farms were much more market-oriented, contributing 80% of all commercial beef sales and virtually all milk deliveries to the Dairy Marketing Board; supplying about a third of the raw materials to local manufacturing; and, contributing about 50% of all agro-export earnings.

It would be imperative to analyse the current value chain of A2 beef cattle famers to better understand how the FTLRP is operationally relevant to the circumstances of the new farmers and everyone else involved or affected by the beef cattle value chain. Value chain analysis can allow for an insight into factors influencing performance of the A2 resettled beef cattle farmers. An understanding of the beef value chain would allow for insights into efficiency of production which is a necessary condition for successful entry into modern markets or markets in general which are concerned about quality and safety standards. Entry into markets requires an understanding of the dynamic factors in the whole value chain.

Conclusion

• A2 resettled farmers are operating as communal farmers in terms of considering cattle as a store of wealth and cattle complexities.

• Land redistribution did not clearly answer the issues of the growing integration of the global economy and modern markets which are complex, highly dynamic and respond quickly to price changes, consumer demands and technological opportunities. Nevertheless, it enabled the entry of new and various chain players into the beef value chain.

• Livestock production after the land redistribution programme is low as compared to the pre-FTLRP era. However the national cattle herd size has been constant at approximately 5 million animals for the past 10 years.

• A2 famers have not been supported in terms of financial services as compared with former commercial farmers. The resettled A2 farmers do participate in beef value chains and their participation chain is at production level.

Acknowledgements

I would like to acknowledge the input of Van Hall Larenstein University of Applied Sciences on this paper. I also appreciate the invaluable support provided by Matopos Research Institute staff.

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Received 23 March 2015; Accepted 1 May 2015; Published 2 July 2015

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