Joint ventures offer a reprieve for Zim producers

Women in Binga, western Zimbabwe, carry finger millet.

Estimated reading time: 8 minutes

The Virginia East Block Farm in fertile Mazowe, 40km north of Harare, which has been unproductive for almost 20 years, has turned over a new leaf.

Young farmers find their footing in Zimbabwean agriculture

In 2000, the Zimbabwean government acquired the 90ha property from its white owner, divided it and allocated small portions to 35 black producers. Lacking resources and skills, the new landowners struggled to farm. Meanwhile, they accumulated a US$96 000 (approximately R1,4 million) electricity bill, which saw the national power company sue them. Fortunately, neighbouring farmer William Doro, who runs a highly productive farming operation, paid off their debt.

Finance minister Mthuli Ncube (centre) listens to an official from Tian Ze Tobacco (left). Tian Ze has joint ventures with various local farmers.

Still, the land remained unproductive to the extent that the government considered repossessing it. To save the farm, the struggling farmers approached Doro with a proposal for a joint venture. He agreed and they entered into a five-year agreement late in 2020.

A new chapter for the farm

This agreement marked the beginning of a new chapter for the property and its owners. William invested approximately US$500 000 (R7,5 million) in the construction of suitable farm buildings, as well as the purchase of water pumps, tractors, and a 60ha-capacity centre pivot. By January this year, the partnership had seen the farm under maize, sugar beans and soya beans.

According to William, the producers had no capacity to work the land to its potential. “We have fertile soil and plenty of water here, but they were only cultivating small portions of maize and vegetables for household consumption. Other portions were used for communal grazing. Now, the farm is up and running. Producers are now earning an income, since they collectively receive 30% of the net income we realise under the partnership,” he says.

He further explains that the government has noted their progress, which is why the minister of lands, agriculture, water, climate and rural resettlement, Anxious Masuka, intervened recently when other producers sought to repudiate the joint venture. Furthermore, Seed Co, the country’s largest seed company, with a presence in 15 African countries including South Africa, Nigeria, Zambia and Kenya, also recognised the progress made so far, and subsequently held a Seed Co field day at the farm last year.

Even if the contract is not renewed, said William, the physical infrastructure he helped build and the machinery acquired will remain on the property. He added that this will enable the producers to continue working.

Producers can now seek joint ventures

According to official figures, there were 800 joint ventures on 67 000ha across the country by June 2021. The Land Commission Act, 2017 (Act 12 of 2017) permits joint ventures in Zimbabwe, but parties kept them secret as the authorities did not want to publicly endorse them, fearing that critics could use these ventures to argue that the country’s land redistribution programme has failed.

However, Masuka announced earlier this year that unproductive landowners were now free to seek partners to help improve national agricultural production and productivity. His ministry has gone a step further by creating a database of producers in need of assistance. Moreover, no joint venture can be executed without the minister’s approval.

He warned that abandoned, derelict and underused farms are liable for repossession and redistribution to candidates on the waiting list, which was estimated at 250 000 individuals in August 2021.

“Holders of such land must consider joint ventures to quickly bring the land under production,” said Masuka.

“Section 18 of the Act buttressed this position by asserting that no occupier of state land shall permit occupation on a sharecropping basis by another person, unless a formal agreement has been entered into between the owner and the occupier, with that agreement having been approved by the minister.”

Notable successful joint ventures

In the Insiza district of the Matabeleland South province, five locals were allocated the 800ha Atherstone Farm. However, similar to Virginia East Block, it remained idle until the South African company, CapeZim, stepped onto the scene. Between September 2020 and May 2021, the company invested R25 million into growing lucerne, commercial maize and horticultural crops under irrigation.

According to Mkhunjulelwa Ndlovu, acting provincial agronomist in Matabeleland South, another notable joint venture in the region is the Valley Communal Irrigation Scheme. Zimbabwean company Gredcorp invested US$1,5 million (R22,5 million) in growing pecan trees, and approximately 19 800 trees had been planted by November 2021.

“CapeZim and its partners want to serve the dairy industry by growing and providing silage lucerne,” said Ndlovu. “They are also growing maize, but instead of selling it as grain, they are setting up a milling plant at West Nicholson. At Valley, the partners want to export nuts to China. These are good investments because producers there had failed [in the past].”

Clear contractual arrangements pave the way

In February 2020, Ian Scoone, British researcher of Zimbabwean agriculture, wrote on his blog that joint ventures and subletting encourage investment, foster skills, increase mechanisation and release finance for improved productivity.

Scoone, a professor of development studies and author of three books on Zimbabwe’s agrarian reform since 2000, said joint ventures between new landowners, external investors and former white large-scale commercial producers had been ongoing, “but frequently very much under-the-radar”, since former president Robert Mugabe was firmly against the idea.

“In our study areas in Mvurwi,” Scoones writes, “we have been following a number of arrangements, including six involving Chinese investments and several involving local investors. Chinese investors usually come through the Chinese tobacco contracting company, Tian Ze, which operates widely in the area, or they have made deals with banks that have taken control of properties due to non-payment of loans.

“They have clear contractual arrangements, usually over 20 years or more, for full management of the farm, including taking over all property, the workforce and so on. An entirely new operation is established, often with significant new investment in irrigation (centre pivots), mechanisation (tractors etc.) and processing facilities (rocket barns).”

Scoones notes, however, that the joint ventures can only become more successful if government refrains from interfering in the agreements.

The Zimbabwe Commercial Producers’ Union is optimistic that joint ventures can unleash the potential of land that has been unproductive since 2000. “They have been a game changer for those who entered into the agreements with a clear focus,” said Shadreck Makombe, president of the union.

Anrew Gasura, a cotton farmer in Gokwe.

“Some producers have no financial resources, machinery and even markets, so they tended to be desperate and signed agreements that have short-changed them. The bad agreements were also a result of the fact that the discussions were held secretly, as former president Mugabe was set against them.

“Out there and isolated from everyone, some producers were duped. However, for those who negotiated well, the investors have brought inputs, skills, machinery and markets. Now that the government has openly supported joint ventures and insists it must approve all external investment, I foresee more producers seeking such agreements which benefit them and the economy,” Makombe said.

Many new landowners lack resources to fully utilise their properties, as local financial institutions are reluctant to provide loans to growers who do not hold title deeds or 99-year leases to the land. In terms of the law, acquired land remains government property and users are only issued permits. Negotiations between the government and banks to make resettled land bankable have not yielded an agreement since 2000.

Joint ventures under Mugabe’s reign

During his reign, Robert Mugabe often told new landowners not to sublet their properties. He warned that if they did so, the government would repossess the farms in question. However, this did not stop desperate producers from clandestinely negotiating with investors. The few joint ventures that his government did approve, as Scoones indicated, involved those connected to the ruling elite, Chinese investors and the government-owned Agricultural and Rural Development Authority, which sealed partnerships to revive its 24 properties under 25-year contracts.

Makombe said most joint ventures that were agreed to despite government warnings involved the production of horticultural crops for export. The new producers sought the assistance of the former growers who had historical business ties with fresh produce markets, mainly in Europe. “To be frank, most of the producers who were exporting during that time, did so on the basis of joint ventures with former producers,” Makombe said.

“The agreements were clandestine because the new citrus and flower growers did not have markets which the former producers had. Therefore, the new producers and the old ones had mutually beneficial partnerships, the former providing the land, the latter providing production knowledge and markets, especially in Europe. “If you consider our circumstances as an industry – zero bank loans and little by way of skills and markets among new producers – well-structured joint ventures are probably the best way to assist strugglers to maximise production and productivity,” he added. – Ian Nkala, AgriOrbit

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