EXPECTED FOOD SHORTAGE ACKNOWLEDGED BY A

UNCLAS HARARE 002117 SIPDIS STATE FOR EB/IFD/OIA, AF/S, AF/EPS USAID FOR AFR/SA, BHR/FFP, BHR/OFDA USDOC FOR 4510 HENDERSON STATE PASS USTR FOR ROSA WHITAKER UNCLASSIFIED PAGE 02 HARARE 02117 100927Z STATE PASS NSC FOR SENIOR AFRICA DIRECTOR JENDAI FRAZIER STATE PASS USAID FOR AFR/SA-PALMA, NEWMAN AND BHR/FPP LONDON FOR CGURNEY PARIS FOR BWILLIAMS PRETORIA FOR AG ATTACHE RHELM NAIROBI FOR REDSO/ESA/ARO-GGOTTLIEB AND ESA/FFP USDA FAS FOR EXPORT CREDITS/CHAMBLISS AND FAA/AME HOFFMAN TREASURY FOR OASIA/ED BARBER AND C. WALKER STATE PASS EXIM/MLHALEY, OPIC/RNEHRA E.O. 12958: N/A TAGS: EAGR EAID EFIN ECON ZI SUBJECT: EXPECTED FOOD SHORTAGE ACKNOWLEDGED BY A CABINET MEMBER ¶1. (SBU) ON JULY 6 THE MINISTER FOR FINANCE AND ECONOMIC DEVELOPMENT, SIMBA MAKONI, TOLD THE PRESS FOLLOWING AN ADDRESS HE DELIVERED TO THE NATIONAL ECONOMIC CONSULTATIVE FORUM THAT HIS MINISTRY'S GOOD BUDGET RESULTS TO DATE FOR 2001 SHOWING A SMALL SURPLUS WERE THREATENED BY THE NEED TO SET ASIDE FUNDS TO IMPORT GRAIN AND MAIZE LATER IN THE YEAR. "THAT THERE WILL BE A SHORTAGE IN NATIONAL (FOOD) PRODUCTION HAS BEEN CONFIRMED. THE DISCUSSION IS IN THE MAGNITUDE", HE SAID. "I AM VERY CONCERNED BECAUSE OUR BUDGET HAS NOT PROVIDED FOR FOOD IMPORTS", MAKONI ADDED. THE FINANCE MINISTER ALSO STATED THAT THE GOVERNMENT WOULD APPROACH DONORS TO DISCUSS POSSIBLE ASSISTANCE THEY COULD OFFER IN THE FACE OF THE LOOMING FOOD SHORTFALL. UNCLASSIFIED PAGE 03 HARARE 02117 100927Z ¶2. (SBU) THIS MARKS THE FIRST TIME A HIGH GOVERNMENT OFFICIAL HAS PUBLICLY CONTRADICTED THE LINE MAINTAINED BY AGRICULTURE MINISTER MADE, THAT THE COUNTRY FACES NO FOOD DEFICIT OR SHORTFALL, AND THAT CURRENT STOCKS AND THE HARVEST WILL SUFFICE. IT ALSOFOLLOWS THE DECISION BY THE AGRICULTURE MINISTERON JULY 3 TO GIVE THE GRAIN MARKETING BOARD A TOAL MONOPOLY OVER ALL MAIZE SALES, DECLARING ALL CORN HARVESTED IN ZIMBABWE A "NATIONAL ASSET", EFFCTIVELY HALTING ALL PRIVATE SALES BETWEEN GROWER AND, FOR EXAMPLE, MILLERS OR OTHER WHOLESALE USRS. (MAIZE SALES WERE LIBERALIZED IN THE EARLY 990'S AFTER A WORLD BANK AND USAID FUNDED MARKET REFORM PROGRAM, AND THE SETUP OF THE ZIMBABWE AGRCULTURAL COMMODITY EXCHANGE (ZIMACE).) IT IS, IN THE WORDS OF A FOOD SECURITY EXPERT BASED HERE, A GIANT STEP BACKWARD" FOR ZIMBABWE'S AGRICULTURL SECTOR AND THE CONSUMER AS WELL, AND IT MAY VERY WELL COMMIT THE COUNTRY TO A LEGACY OF FOOD SHOTAGES IN COMING YEARS. ¶3. (SBU) COMMENT: DESITE REPEATED GOVERNMENT ASSURANCES TO THE CONTRAY, OUR ANALYSIS SUPPORTS MINISTER MAKONI'S CONTETIONS REGARDING THE LIKELIHOOD OF POTENTIALLY SERIOUS FOOD SHORTAGES OVER THE COMING YEAR(S). MOROVER, THE RE-MONOPOLIZATION OF THE DOMESTIC GRAI TRADE WILL LIKELY EXACERBATE THESE PROBLEMS IF URSUED FOR ANY LENGTH OF TIME. HOWEVER, AS WE'V RECENTLY SEEN WITH DEVALUATION, IT REMAINS TO BE SEEN WHETHER THIS GOVERNMENT WILL ACT ON MAKONI'S COUNSEL IN THIS INSTANCE, AS THIS WOULD ONLY ADD O THE UNCLASSIFIED PAGE 04 HARARE 02117 100927Z GROWING LIST OF GOVERNMENT FAILURES. IF RQUESTED, DONOR SUPPORT WOULD PROBABLY BE FORTHCOING FOR SUCH HUMANITARIAN PURPOSES. HOWEVER, SUCH ASSISTANCE WOULD NOT COME WITHOUT POTENTIALLY DFFICULT CONDITIONALITY FOR THE GOVERNMENT DURINGTHIS SENSITIVE ELECTION PERIOD, INCLUDING, AMONGOTHER THINGS, A FULL WAIVER FROM THE PROPOSED BA ON PRIVATE GRAIN TRADING FOR OBVIOUS POLITICAL REASONS. END COMMENT. WOERNER UNCLASSIFIED >