The Famine Early Warning National Early System Network Warning Unit ZIMBABWE MONTHLY FOOD SECURITY UPDATE October 22, 2001

Summary

o Fewer farmers this year have benefited from the residual inputs left from last year’s Grain Marketing Board (GMB) input credit scheme, although others are benefiting from an additional Z$225 million in inputs from the program. Only well-off farmers with cattle, good homesteads, and who have sold maize to the GMB in the past seem to have been registered for the GMB credit scheme, highlighting the need for a similar program to target poor farmers so their 2002 production does decrease further.

o The Zimbabwe Department of Meteorological Services is forecasting normal rainfall across the country during the first half of the agricultural season (October, November, and December). The southern and western districts have a 45 percent chance of receiving a normal rainfall and a 35 percent chance of a below-normal rainfall. During January, February, and March, the southern districts of the country have a 50 percent chance of receiving normal rainfall, while the northern districts have a 45 percent chance of normal rainfall.

o The Government on October 12, 2001 announced price controls for basic commodities, including commercial maize meal, bread, rice, cooking oil, beef, chicken, and washing powder. The price controls have reduced prices by between 1 and 20 percent from September prices.

o By mid-October, farmers had sold about 40,600 MT of wheat to the GMB, which is the sole buyer and seller of maize and wheat in the country. Wheat stocks should start to build up as the projected 275,000 MT harvest is sold and the country imports 80,000 MT of wheat before the next harvest in October 2002.

o A World Food Programme food needs assessment conducted in October estimates that about 706,000 people require food aid. This represents as much as 31 percent of the population in some districts in (Mberengwa and Districts); Matebeleland North Province (Binga, , and Tsholotsho Districts); Matebeleland South Province (all districts); Province (all districts except Gutu); Mashonaland West Province ( District); Mashonaland Central Province (Lower Muzarabani, Lower Guruve, and Mount Darwin Districts); and ( District). 2

1. Current Food Security Conditions

1.1. Crop Conditions

Heavy rain fell during the fourth week of October in the southern and central districts of the country. Farmers in Kadoma and Kewkwe — who had started planting dry-land crops hoping to take advantage of an early start to the season — received 35 mm of rain.

Farmers began transplanting Virginia tobacco from the seedbeds to the fields in early October. The area planted is part of the estimated 67,000 ha planned for tobacco by the commercial farming sector this year. Harvesting of the estimated 52,000 ha under wheat started in early October, and approximately 275,000 MT production is expected.

Farmers are buying inputs for the 2001/02 growing season due to start in November. But for the reasons cited below, inputs may be too costly for some poor communal farmers: a) Increaseinprices: There has been an increase of 135 percent in the price of inputs compared to last year. b) Reduced income from last season’s production: Due to the poor harvest last year, communal farmers have less income available to buy inputs. c) Disrupted input distribution mechanisms: The programs available last year, for example credit schemes or arrangements with the private sector such as Farmers World, are not available this year.

Figure 1. Zimbabwe Seasonal Rainfall Forecast for 2001 and 2002 Rainfall Forecast for October, Rainfall Forecast for January, November and December February and March

North OND: Above Normal (30%) > 420mm North OND: Above Normal (35%) > 625mm Normal (50%) 226 to 420mm Normal (45%) 336 to 625mm Below Normal (20%) < 226mm Below Normal (20%) < 336mm South OND: Above Normal (30%) > 315mm South OND: Above Normal (35%) > 409mm Normal (45%) 170 to 315mm Normal (50%) 220 to 409mm Below Normal (25%) < 170mm Below Normal (20%) < 220mm Source: Department of Meteorological Service 3

Although more farmers have registered this year for the GMB credit scheme, the availability of funds and farmers ability to meet the screening criteria are likely to limit participation this year. The Government of Zimbabwe has set aside Z$6.5 billion for the input credit program this year. However, unless the Government acts now to disburse the US$6.5 billion, farmers may lose the chance to use the inputs during the upcoming planting season, which starts in November.

Compared with last year, fewer farmers so far this year have benefited from Grain Marketing Board (GMB) input credit scheme. This year only the residual inputs left from last year’s program has been made available to farmers that qualify this year.

1.2. Seasonal Outlook

Chances are high that the country overall will experience normal rainfall during the 2001/02 season, according to a forecast issued by the Meteorological Department October 5, 2001. The forecast also projects that some areas in the northern districts of the country have a slight chance of above-normal rainfall. During the first half of the agricultural season (October, November, and December), normal rains are expected for the whole country (Figure 1). With a normal rainfall season, farmers can proceed with the usual practice of planting high-yielding, late-maturing varieties in the northern districts of the country, and short-season varieties in the southern districts of the country.

Although Zimbabwe has the capacity to produce a grain surplus grain in 2001/02, this potential has been mitigated by the following factors:

a) Farmers who normally buy inputs after selling their harvest may not be able to afford the inputs, as there was little or no surplus to sell last season. b) Input costs have increased from about Z$800 per bag of fertilizer to Z$1,800 since last year. c) Some farmers were unable to repay their input credit from last season to the GMB and therefore would not receive inputs this season. These farmers are not able to buy them without credit. d) Financial institutions are charging prohibitively high interest rates for agricultural inputs. e) Productive farmers who normally produce a surplus are objecting to the Government policy requiring them to sell their maize to the GMB. Farmers say the GMB price is too low and object to having to pay transport costs if they deliver the maize through GMB collection points. Also, they have to pay high transport costs for GMB inputs. This arrangement is less profitable than selling maize through private buyers, such as millers and Farmers’ World, who not only provided cash at a farm gate price higher than the Z$7,300 per MT offered by GMB, but also helped transport the inputs to the farm. As a result of this policy, some farmers indicated that they will be reducing the hectarage under maize during the 2001/02 season. In the maize-growing districts, farmers disgruntled by the maize marketing system indicated they would be expanding into sweet potatoes, vegetables (for example, in Murehwa and Districts), and cotton (for example in ). These crops are expected to have higher returns than maize. f) Farmers also complained that the GMB input credit scheme could exclude less well-off farmers. The screening criteria have been based on such things as assets held by the farmer, for example, ownership of draft animals, a good house, and farm implements. As a result, some farmers excluded from the GMB credit scheme indicated that they would have to use retained seed next season and are likely to have lower harvests. 4

g) Commercial farmers anticipate a 40 percent drop in commercial grain production this year over last year due to disruptions and violence on the farms. Some 1,183 farms have been affected by work stoppages and 350 farms have shut down completely. Tobacco production was likely to be reduced by 35 to 50 percent because of the disruptions. About 20 percent (240,000) of their cattle were sent to slaughter due to lack of grazing as the veld was burned down. h) Large-scale commercial farmers in Midlands, Mashonaland Central and West Provinces have been prevented from establishing an early irrigated maize crop that could have been harvested early, artificially dried, and sold early in the season to mitigate shortages. i) There is also a concern about the security of the maize crop planted in the large-scale commercial farming areas.

1.3. Market Conditions

1.3.1 Consumer Goods

The Government announced on October 12, 2001 price controls on basic commodities, including sugar, rice, bread, commercial maize meal, margarine, cooking oil, fresh milk, beef, chicken, generic drugs, and washing powder. The price controls have reduced prices by between 1 and 20 percent from September levels (Figure 2) and have affected the availability of some basic commodities as well as the quality of bread. Industry has either stopped or significantly reduced production of some of these commodities and some retail outlets have withdrawn goods as they would have to sell at a loss.

Figure 2. Retail Price Trends of Basic Commodities from April 1999 to September 2001 (Z$)

600 Sugar White 2Kg Mealie Meal Chibataura 20Kg 500 Cooking Oil Olivine 750ml Flour Gloria 2Kg Margarine Stork 2Kg Milk Fresh 500ml 400 Bread White Loaf

300 Z$

200

100

0

l 9 9 9 9 9 0 0 0 0 0 0 1 1 1 1 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 o ------r r t r t r t n g c b n g c b n g n p c e p c e p u u e u u e u u o A J O D F A J O D F A J A A A C Source: Consumer Council of Zimbabwe 5

1.3.2. Agricultural Inputs

Significantly more maize hybrid seed stocks are available in 2001 than were available at the same time last year. In fact, the amount of maize stocks currently held are enough to plant more than 2 million ha under maize, which is significantly above the 5-year average of 1.4 million ha normally planted to maize. Seed sales so far have remained similar to last year, and could increase from September onward as the rainy season approaches (Figure 3).

Figure 3: Maize Seed Sales and Stocks in 2001 Compared with 2000

70,000 Maize Seed Stocks 2000 Maize Seed Stocks 2001 60,000 2000 Cummulative Maize Seed Sales 2001 Cummulative Maize Seed Sales

50,000

40,000 MT 30,000

20,000

10,000

0

n b r r y n l g t t v c a e a p a u p c o e u J u e O J F M A M J A S N D Source: FEWS NET and Ministry of Agriculture

2. Food Security Prospects for the 2001/02 Consumption Year

2.1. Food Security at the National Level

By mid-October 2001, food stocks in the official reserve were estimated at 200,355 MT. The stocks, which are made up of the GMB commercial and Strategic Grain Reserve, have continued to decrease as the sales from GMB picked up by about 5,000 MT in October, from an average of about 50,000 MT per month. At the current rate, the official stocks will be exhausted by end of January 2002. Official stocks are at their lowest level in two years, and are 63 percent below the level at the same time last year. Even with planned imports of 100,000 MT, the country has a deficit of more than 100,000 MT of maize (comparing maize availability with national consumption requirements) until the next harvest coming into the market in May/June 2002.

Wheat stocks were estimated at 85,000 MT at the end of August, and since September have continued to decline. However, the rate of depletion was slowed by reduced consumption caused by the continued increase in the price of bread, which was at Z$60 per loaf before price controls were put in effect. Harvesting and marketing of the 2001 wheat started in October. By 6 mid-October, 40,600 MT of wheat had been sold to the GMB, which is the sole buyer and seller of maize and wheat in the country. Wheat stocks should start to build up as the 275,000 MT harvest is sold and the country imports 80,000 MT. The country should have just enough wheat to meet consumption requirements of about 364,000 MT, which does not include the replenishment of the Strategic Grain Reserve, until the next harvest in October 2002.

2.2. Food Security Prospects at Sub-national Level

2.2.1. Current Food Access in Rural Areas

Grain prices have continued rising in rural areas. Maize is being sold at about Z$150 -Z$200 per bucket in the grain-producing districts, and at Z$200 -Z$350 per bucket in the southern districts of the country. Markets in the southern districts depend heavily on GMB maize moved from the depots in the north. There are widespread reports that maize trade at some rural and urban markets is prohibited. The move has restricted maize availability in some of the remote areas of the country.

In October, the World Food Programme conducted a food needs assessment. From this assessment, it was estimated that 705,785 people could require 57,526 MT of food aid for about 6 months. This represents 31 percent of the population in the affected districts of Midlands Province (Mberengwa and Zvishavane Districts); Matebeleland North Province (Binga, Hwange, and Tsholotsho Districts); Matebeleland South Province (all districts); (all districts except Gutu); Mashonaland West Province (Kariba District); Mashonaland Central Province (Lower Muzarabani, Lower Guruve, and Mount Darwin Districts); and Manicaland Province (). However, food aid programs have to be implemented between now and February 2002, as any programs after this period are of no much benefit to the communal population as some would start consuming food from the current season, provided the season is good.

In response to the food needs, local NGOs have started child supplementary feeding programs in some districts. Care International is feeding about 140,000 children in selected wards in Zvishavane and Mberengwa Districts (Midlands Province) and Mwenezi and Zaka, Chivi, and Masvingo Districts (Masvingo Province). World Vision is planning to feed 130,000 people under its food-for-work program in Mberengwa and Gokwe North Districts (Midlands Province) and Matopo, , , and Bulilimamangwe Districts (Matebeleland South Province). OXFAM is planning to fund the feeding of 8,500 people in three areas in (Matabeleland South Province), (Masvingo Province), and two informal settlements in Mashonaland West and Central Provinces. In addition to food aid programs, these NGOs are planning to provide seed and tools to the affected households. If put in place, these programs will help alleviate food access problems in most of the southern districts of the country.

In the large-scale commercial farming areas, about 1,948 farms have been resettled or occupied by 104,175 people, displacing 74,998 farm workers and their families. Some of the workers would require assistance.

2.2.2. Current Food Access in Urban Areas

The rate of inflation was 83.6 percent in September, up from 57 percent in January. The rate of inflation has not been matched by an increase in wages for the formal sector. As a result, salaries in real terms in this sector have been eroded by 20 percent in 2000, and by more than 7

70 percent in 2001. This decline in real wages has occurred despite the 20-65 percent salary increases awarded in much of the formal sector in July 2001 (Figure 4). The decline in salaries in real terms has eroded food security for the lowest-paid employees.

Figure 4. Annual Inflation Rate Compared to Real Wage Changes of Selected Formal Sector Employees 200 General Agricultural Workers (Grade 4) Workers in Engineering Field (B3) 150 Clothing Employees Grade (4A5) Commercial Employees (Grade 12) Yearly Inflation (%) 100

50

0

-50 % Real Wage Changes and Inflation 5 6 7 8 9 0 1 9 9 9 0 0 9 9 9 99 99 0 0 1 1 1 1 1 2 2

-100 Source: Zimbabwe Confederation of Trade Unions

3. Food Security Recommendations to Consider Immediately

FEWS NET and NEWU make the following urgent recommendations:

o The Government needs to hasten the release of funds meant for the smallholder input credit program as the planting season will begin in November. An alternative suggestion would be a voucher system so those farmers could obtain inputs through existing commercial channels in their areas. Waiting for the GMB to procure and disburse the inputs could jeopardize farmers’ opportunity to use the inputs this season. o The Grain Marketing Board, the sole authority that can import or export maize, needs to import at least 200,000 MT of maize to ensure adequate stocks in the country during the remainder of 2001/02. o The Government needs to launch an appeal for food assistance so the NGO community can be in a position to raise funds to expand their food aid programs. o The Government needs to expand the GMB’s distribution network and mechanisms to ensure grain availability for Zimbabweans in remote rural areas and for the urban poor. o The GMB should start packing maize in 25-kg packs to make it more affordable for poor consumers. o NGOs need to complement the GMB input credit scheme by providing credit to farmers who have not benefited from the GMB program and who cannot afford to buy inputs for the coming season. o There is need to review the policy giving monopoly power to the GMB to buy and sell maize. This policy has disadvantaged farmers in all sectors who used to get better 8

producer prices and inputs at the farm gate from private traders such as Farmers’ World. The pre-planting maize price (Z$15,000 per MT) alone may not be a good enough incentive for farmers to increase production. o Farmers who registered with the GMB to participate in their credit scheme need to receive the inputs before the end of November. The delayed delivery of inputs, as happened last year, means the inputs won’t get used, which will lead to reduced production and the failure of some farmers to service the GMB loans. o Farmers in all sectors -- especially commercial farmers who have better resources than their communal counterparts -- should expand maize production in 2001/02 if food security conditions are to improve.