A. Historical Background

A.1 Introduction

This is a report based on the effects of globalisation defined as opening up of domestic markets to international forces through trade liberalisation and privatisation on the livelihoods of the people in Lower Guruve (Dande), part of the Mid-Zambezi Valley over the past two decades. Before independence in 1980, the area was largely traditional due to its isolation and neglect. In terms of land use form, since the colonisation of Zimbabwe and the subsequent effective administration in the 1920s the area it had been reserved as a wildlife zone with safari areas carved up for commercial hunting.

Since independence, there have been rapid modifications to the original situation as the region was increasingly opened up to external modernising forces. However, no documentation and analysis has been done to find out the effects of these transformations on the livelihoods of the local people. Therefore the purpose of this paper is to analyse and document the effects that have taken place since independence.

B.0 Pre- Independence Period

At independence the area had a small population largely settled along the three main rivers flowing through the valley, Musengezi, Manyame and Angwa. The indigenous ethnic group were the Korekore a Shona sub-ethnic group. The population was estimated at around 7,000 households. The inhabitants grew sorghum, millet and groundnuts as summer crops and maize as a winter crop along the riverbanks. The inhabitants reared goats only, as the area was tsetse infested therefore prohibiting the rearing of cattle. Both business and social infrastructure were extremely underdeveloped.

As the remnant part of the Mutapa Empire, from the fifteenth to the eighteenth centuries, the state derived its wealth from three sources: cattle-herding on the plateau, agriculture and distant trade in ivory and gold . Highly profitable trade routes from the plateau to the seaports via the Zambezi River that passed through Dande flourished. In this way the area was linked to the international network of trade between Europe and the Far East. Ivory and gold were exchanged with Portuguese traders for cloth and beads from India. Salt extracted from saltpans was traded internally with the people of the plateau for grain.

The effects of the Pioneer Column that founded the state of Rhodesia in 1890 had hardly any effects on Lower Guruve for almost 20 years . Even the nationwide resistance of 1896-7 marginally affected the people of the Valley. At that time their focus was on resisting the Portuguese during the insurrections of 1905 and 1917. Eventually in 1920 the Rhodesian state made its presence felt through the reorganisation of chieftaincies, (demoting those found hostile and increasing the power of those found friendly) and the introduction of taxation. Headmen and chiefs were charged with the responsibility of collecting the imposed tax. The direction of trade and labour recruitment switched from its original northerly orientation in the direction of the established Portuguese trading posts (Tete and Sena) along the Zambezi River to a southerly course towards the farms and mines of the Plateau.

The early diversification of the local economy into various forms of trade had been spurred by the desire to seek additional sources of income not reliant on rains. The collapse of the Portuguese trade routes coincided with the imposition of taxation that drove young labour out of the local economy onto the capitalist market. The loss of the two main pillars of the inherently unstable local economy weakened it. The fate of the family livelihoods has become dependant on success of the male migrant labour on the plateau, and the production of cotton and maize. The original trade has been reduced to the sale of baskets and mats woven by men from the bamboo and river reeds.

C.0 Changes Taking Place

C.1 Sharp Population Increase

The population has since increased dramatically at different points in time due to several factors. Owing to its sparse population, a heavy influx of migrants occurred in the early 1980s. Intra-rural migration took place at that time as a response to the availability of virgin land in Lower Guruve. The migrants came from the districts of Masvingo and Manicaland provinces that were under intense land pressure. New villages sprang up due to this population increase. The process of migration accelerated towards the late 1980s when the Tsetse Eradication Programme, funded by the European Economic Community (EEC) cleared large areas of tsetse flies. The coming of outsiders into the valley has brought in ethnic tension into the region. Ethnic friction is sharp where it is accompanied by differences in the accumulation of material wealth.

During the mid-1980s, under the Mid-Zambezi Development Plan, initiated by the state and funded by the African Development Bank (ADB), the traditional villages were reorganised ostensibly on the grounds of facilitating the provision of services to the people. The implementation of the plan created space for more migrants to settle in the Valley. At that time more and more settlers were attracted by cotton production whose prospects appeared lucrative relative to other crops.

Since the implementation of the Economic Structural Adjustment Programme (ESAP), prescribed by the International Monetary Fund (IMF) as a condition to reinvigorate the economy in the early 90s, a significant number of workers were retrenched from mines, commercial farms and urban centres. The act was a process of de-industrialisation as the economy shrank resulting in the laying off workers. Some of these workers had no permanent residence on farms and mines. Inevitably, they sought refuge in the Valley. The majority are of foreign origin, having been recruited from neighbouring countries as young men during the colonial era, therefore without an immediate rural base in Zimbabwe . These former workers sought refuge in the relatively sparsely populated areas such as the valley.

Ever since the commencement of the agrarian reform that erupted in early 2000 after the constitutional referendum, there have been movements in and out of the Valley. A handful of farmers linked to the liberation war secured plots in the former commercial farms on the plateau, and decided to move out of Lower Guruve. Yet at the same time there was an opposite and massive movement into the valley by former commercial farm workers who had lost their farm jobs as a result of the reform. A 2003 study in five wards of Lower Guruve reported an unprecedented sharp population increase of 32% between 2001 and 2003 .

A summary of population figures for the period 1992 to the 2003 years is given in the table below.

Source: CSO Census figures, 2005
* 2003 figures are Christian Care estimates from the Food Distribution Program

The figures show that the population of Lower Guruve has doubled from 1992 to 2003. The increase is far more than the national rate of population growth. The reasons for the sharp increase have already been given in the text. Tsetse eradication, retrenchments and agrarian reform are the key reasons behind the sharp increase.

C.2 Shift from Food Crops to Cotton Production

Agricultural production underwent a swift transformation from food to cash crop production. Traditionally sorghum and millet were the staple food crops grown, but since the mid-80s small grains have to a large extent been replaced by cotton, a cash crop. Nearly all farmers at present grow cotton and the area under the crop is around 80% of the total arable land. The shift to cotton production has unwittingly exposed the people to the vagaries of the international market forces.

Levels of external input use (as opposed to local inputs in the traditional small grains production) expanded considerably, because cotton is an input intensive crop. Therefore companies such as Agricura (mobile) and the cotton merchants set up depots within the valley for the supply and distribution of agro-chemicals to farmers. The Cotton Marketing Board, the predecessor of Cotton Company of Zimbabwe, introduced an input credit support scheme in which cotton growers source inputs according to desired hectarage on credit, payable at the marketing stage. Furthermore, the then Agricultural Finance Corporation (now Agricultural Development Bank) began advancing input loans strictly for cotton production only. All these measures spurred cotton production in Lower Guruve since then to the present date.

With the huge increase in cotton production, marketing depots were set up at Mahuwe and Mushumbi during the early 1980s where growers make deliveries during the marketing season. Initially, the Cotton Marketing Board was the only player in the cotton-marketing sector. The marketing arrangement ensured guaranteed pre-planting prices, therefore farmers engaged in production with the full knowledge of what they expected to get from the planned produce. The agricultural business environment then was favourable with stable input and producer prices.

C.3 Switch to Mechanised Tillage

Parallel to the above developments were efforts of the state and Non-Governmental Organisations (NGOs) that also appeared on the scene. The state through the District Development Fund (DDF), quasi-government organisation, began providing. mechanised tillage services to Lower Guruve in 1982. The services turned out to be inadequate in relation to demand. Lutheran World Federation (LWF) a non -governmental organisation appeared on the scene in 1984. It brought tractors to augment state services to ease the draught power shortage. At that time the residents could not rear cattle due to the scourge of tsetse flies. At its peak (1992. Lower Guruve Development Association( LGDA) the successor to the LWF tillage programme had a fleet of 8 tractors strategically deployed in the scattered villages of Lower Guruve to ensure equitable distribution of services. In addition, a considerable number of farmers acquired second-hand tractors from the neighbouring commercial farms. In the mid-1990s, the three northern communities rich in wildlife also bought community tractors for tillage purposes. These measures deepened the dependency of communities on mechanised tillage, and at the same time unknowingly exposed the farmers to international market forces and oil prices.

All the land prepared by tractors was invariably put under cotton, another factor that intensified cotton production. The tillage price was to a large extent affordable to the middle peasantry and the financial input credit schemes also covered tillage service charges. Throughout the tillage program history , LWF and subsequently LGDA bent backwards to accommodate the poor by offering tillage services on credit to an agreed number of poor farmers selected by the community members payable at the marketing stage.

Tractorisation had two profound effects in the region. Mechanical tillage contributed to the expansion of the area under cultivation as evidenced by the CIRAD (spell out) report covering three wards( 2,3 & 4) in its bio-diversity project. According to the report, the increase in cropping land from 1981- 93 was around 8% p.a. jumping to 25% between 1993-97 . While other factors such as migration especially after tsetse clearance, contributed to the increase, the primary cause remained mechanised tillage.

Secondly, cash proceeds from cotton sales increased, enabling many farmers to buy cattle. With the exception of three tsetse fly-infested areas, the rest of the eight wards are rearing cattle at present. Indirectly therefore, it contributed to the emergence of animal draught power to the detriment of tractors.

C.4 State Support Interventions

Meanwhile the state launched massive programs for the benefit of the locals, parallel to the above developments. These programs were largely implemented with financial development assistance from bilateral agreements with donors, notably the then European Economic Community (EEC) the European Union (EU) since 1995) and United States Aid for International Development (USAID).

• As already alluded to in the early 1980s the government introduced the Mid-Zambezi Development Plan. Its purpose was to reorganise villages by properly demarcating residential, arable and grazing land in order to facilitate the provision of services such as education, health, transport, water, electricity, etc to the communities. The African Development Bank financed the program through loans. The unintended effect was an influx of migrants from outside.

• A host of donors including the European Union, then referred to as European Economic Commission, funded the District Development Fund since 1981, an agency providing a host of services to the farmers. Besides tillage provision spurred by cotton production, it drilled boreholes, built and maintained feeder roads.

• In the health sector new health centres emerged as a result of central and local government efforts to provide services hitherto non-existent in the valley. The same developments took place in the education sector. Behind these developments was the powerful financial arm of the European Economic Community (EEC) later European Union.

• Towards the end of 1980s the state launched a tsetse-eradication program with the financial support of the EEC. The program managed to clear three quarters of Lower Guruve of tsetse flies, enabling an increasing number of farmers to acquire and rear livestock using proceeds from cotton sales. As well as providing social security, it meant that for the first time the villagers were accumulating substantial wealth on a wider scale. In fact some villages became self-sufficient in animal draught power.

• During the colonial period the indigenous people had been alienated from their natural resources, in this case wildlife. The government sought to restore ownership back to the indigenous people through the implementation of a programme called Communal Area Management Programme for Indigenous Resources (CAMPFIRE) (time). Through this program, the communities receive 45% of the proceeds from commercial trophy hunting. These funds were used to finance community projects of their choice and pay household cash dividends. Grinding mills and tractors are some of the community assets bought by trophy hunting proceeds. Communities also received animal carcasses from trophy hunting for their meat supply. The programme was heavily funded by the USAID. The northern part of Lower Guruve is rich in wildlife and communities located there such as Kanyemba, Angwa and Masoka benefited substantially from this program.

D.0 Changes in Fortunes

The introduction of the World Bank/IMF Economic Structural Adjustment Programme in the early 1990s, the downturn of the economy in the late1990s and the subsequent political isolation of Zimbabwe during the course of the year 2002 dramatically changed the fortunes of the people. ESAP led to the liberalisation and privatisation of the economy in 1991. By introducing ESAP on the advice of the IMF and the World Bank the government hoped to accelerate economic growth, fund social services (health and education) and above all have the capacity to create jobs for the thousands of annual school leavers . The following effects were experienced after the adoption of ESAP. As will become apparent later these changes had the net effects of worsening the welfare of the people in /Zimbabwe

D.1 Deregulation Of Cotton Producer Prices

ESAP induced a government policy change on cotton producer prices, which was parallel to the US/EU guaranteed price policies. The change pushed the government from the centre of price setting to the periphery, marking the end of the era of guaranteed producer prices. Price setting was left to the invisible hand of market forces, i.e. the negotiations between the farmer organisations and the cotton merchants contracted to the big international cotton companies. just before the marketing season. The new system brought insecurity to the farmers, (without the government’s cushioning effect), as they no longer enjoyed guaranteed pre-planting prices. Under the new arrangement farmers produce and then anxiously wait for the announcement of producer prices during the harvesting season. The price set by the cotton merchants is directly related to the global price. Thus the farmers have been reduced to price-takers in a market of decreasing returns.

The negotiations between the representatives of farmer organisations and the cotton companies are heavily tilted in favour of the latter. While the companies base the producer price on the international value, the farmers take into account the costs of production especially under the present hyperinflationary conditions. The farmers attempt to recoup production costs, while cotton merchants stick to the international price (that has been on a downward trend for the past five years) dictated by US Agricultural Policy and other global forces . Thus disagreements inevitably arise between the two parties. The price offered by merchants usually prevails with minor adjustments due to unequal negotiating powers between the two parties. Inevitably farmers’ real income from cotton production is severely curtailed.

D.2 Emergence of Competition

Since the deregulation of the sector, new entrants came on board to buy seed cotton introducing an element of competition in the marketing of the crop. These players included Cargill, Farmers’ World, Cotpro and FSI Agricom. Cotton Marketing Board transformed in 1992 into a private entity called Cotton Company of Zimbabwe (CCZ). Competition in buying cotton ensued. Farmers adopted the practice of delivering quantities equivalent to the loan to CCZ, diverting the remainder to new merchants offering the highest prices. The traditional player CCZ, supporting production through the input credit scheme, complained bitterly on the practice threatening to withdraw its grower support that other merchants were not providing.

The managing director of CCZ had this to say on competition, “ Growers are enticed by short-term benefits such as higher producer prices from new entrants to side market their crop, thus prejudicing the viability of the scheme and limiting the ability of Cottco to roll over the funding into subsequent seasons. As a private company guided by stakeholder interests, Cottco cannot continue with the role of national benefactor, with competitors coming to reap where they did not sow”. (Financial Gazette 9/7/2003)

The withdrawal of support to offending farmers led to the collapse of Cotpro and Farmers’ World, companies without ginning facilities and the capacity to extend credit to growers. FSI Agricom closed due to unscrupulous business practices by its parent company although, previously, it had also offered credit to farmers. The remaining cotton merchants at present are CCZ and Cargill. Therefore the short-term benefits that the farmers had enjoyed during the period of competition were short-lived as state monopoly was replaced by private company monopoly, i.e. CCZ partly owned by the government . The cash boom for farmers was thus short-lived. They have to make do with what the remaining two companies are prepared to offer. CCZ controls 90% of the market and Cargill almost the remainder.

The 2004 marketing season was marred by price wrangles between farmer organisations and cotton merchants. The matter came to a boiling point with farmers demanding at least Z$3000/kg while the merchants offered Z$1800/kg only. The final price agreed on after the intervention of the Governor of the Reserve Bank was settled at Z$ 1900/kg, a far cry from the farmers’ expectation. It is clear that at the marketing stage there is unequal negotiating power between the two parties. It is the merchants that are in a position of strength. It is not a win-win situation for both parties, but for one.

The ultimate producer price paid is a function of the volatile global price, notwithstanding imperfections at the national level. According to Oxfam America, “Cotton has become a symbol of the inequalities of global agricultural trade owing to subsidies provided to US farmers that spur overproduction with harmful effects on developing country farmers. Subsidies have led to depressed world cotton prices resulting in reduced incomes for farmers and loss of export revenue for the developing country governments.”(Finding the Moral Fiber, Oxfam International, October 2004)

Over the last 10 years the United States (US) has sold cotton on the export market at prices well below the cost of production (See table 2). During the year 2003, cotton was exported at an average price of 47% below cost of production. This practice is termed dumping. The structural price depression associated with agricultural dumping has two profound effects on developing country farmers producing the same commodities. To start with, below cost imports drive the farmers out of their local markets. In the absence of safety nets of subsidies and credit, they may be forced to abandon their land resulting in the shrinking of the rural as well as the national economies. Secondly, developing country exporters find their global market share undermined by the policy of a depressed “global price “. Zimbabwe exports 70% of its total cotton output, with 30% destined for domestic consumption. Therefore, its exports are affected by the US dumping policy resulting in farmers getting less and less from their produce.