ANOTHER POOR HARVEST LIKELY IN ZIMBABWE IN

UNCLAS SECTION 01 OF 03 HARARE 001447

SIPDIS

DCHA/FFP FOR LANDIS, WELLER, MUTAMBA, PETERSEN
DCHA/OFDA FOR GOTTLIEB, PRATT, MENGHETTI, MARX
AFR/SA FOR LOKEN, COPSON, HIRSCH
EGAT FOR HOBGOOD, THOMPSON, HESS, MCGAHUEY,
GILL, RUSHIN-BELL, HURDUS
STATE/AF FOR NEULING, MOZENA
USUN FOR EMALY
NAIROBI FOR ESTES, DNIRANGO, PUTNAM
PRETORIA FOR SINK, DISKIN, HALE
ROME FOR FODAG FOR NEWBERG

SENSITIVE BUT UNCLASSIFIED

E.O. 12958: N/A
TAGS: EAID EAGR PREL US ZI
SUBJECT: ANOTHER POOR HARVEST LIKELY IN ZIMBABWE IN
2006

REF: Harare 1356

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Summary
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1. (SBU) The outlook for the upcoming agricultural
season in Zimbabwe is poor. Climate forecasts indicate
an increased chance of normal to above-normal rainfall
in Zimbabwe during the 2005-2006 growing season. In
addition, the UN Food and Agriculture Organization
(FAO) reports that maize seed is readily available in
country. However, the Government of Zimbabwe's (GOZ)
mismanagement of the economy has led to high seed
prices, rendering their availability largely moot. In
addition, also a result of government policies,
fertilizer and fuel are largely unavailable and there
are strong incentives for farmers who have access to
these commodities to resell them rather than use them
for agricultural purposes. We believe that on balance
another failed planting season is likely and with it
continuing high levels of food insecurity. End
summary.

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Improved precipitation likely
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2. (U) Zimbabwe's growing season starts with the
arrival of the rainy season, usually at the end of
October. According to the Southern Africa Regional
Climate Outlook Forum (SARCOF),there is an increased
chance of above normal rainfall in Zimbabwe from
October to December 2005. During the period January-
March 2006, the outlook indicates normal to above-
normal precipitation.

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Maize seed sufficient
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3. (U) FAO estimates that there are 27,000 MT of
maize seed currently available in country, which is
near normal given the range of 30,000-35,000 MT of
maize seed planted each season during the 1990s. The
government says that it plans to import another 20,000
MT in an effort to ensure a bumper crop, but it is
unclear whether it has sufficient foreign exchange to
pay for the imports, estimated in the range of $20 -
$30 million, because we understand that the GOZ still
has not paid the seed companies for seed it imported
last year. (Note: A recent FEWSNET report indicates
that 26,000 MT of maize seed is available, but FEWSNET
assumes that Zimbabwe's total need for maize seed is
the normal demand of 30-35,000 MT plus the extra 20,000
MT the GOZ would like to import. Based on this
assumption, FEWSNET concludes that a significant seed
shortage exists. End note.) In addition, at this
point it is doubtful that any additional maize seed the
GOZ is able to purchase will arrive in country in time
for planting.


4. (U) In terms of other cereals, sorghum seed stock
is sufficient in country, but there is a major shortage
of millet seed. Millet, however has a very small
market. Soy bean seed is also in plentiful supply but
production has fallen from a peak of 150-160,000 tons
to 50-55,000 tons this year; its share in the provision
of cooking oil has fallen from 50 percent to 25-30
percent. Production of cottonseed oil has been
inadequate to close the cooking oil gap, thus causing
shortages and pressure to import.

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Farmers prepare, but for what?
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5. (U) Despite the positive climate outlook and
availability of maize seed, the 2006 harvest is likely
to be poor. Based on field visits by USAID staff and
discussions with FAO, it is clear that farmers have
begun to prepare their fields for the upcoming growing
season, but many lack the necessary inputs. During a
recent field visit by the Ambassador to Bikita District
in Masvingo Province (septel),villagers consistently
reported that they intend to prepare their fields for
planting, although they admitted they could not afford
seed, fertilizer, or the cost of tillage. They
indicated that they would till their fields and wait to
see if the government would provide the necessary
inputs.


6. (U) While maize seed is available and some seed
companies say that they have already distributed seed
around the country, farmers' lack of access to
fertilizer and fuel will also limit crop production.
Fuel is needed to further distribute available seeds
and till larger fields (reftel). The GOZ plans to
import some 100,000 MT of fertilizer from South Africa,
but this may not materialize because of the lack of
foreign exchange. Even if successful, 100,000 MT will
fall short of their own stated goal of 450,000 MT.
(Note: The GOZ's solution to the fertilizer shortage is
to recommend that manufacturers "stretch" the
fertilizer compound by using less nitrogen, which would
lead to a weaker basic fertilizer. The GOZ is also
advising farmers to plant now and apply fertilizer
"later." End Note.)


7. (U) The GOZ's command and control economic
policies, e.g., price controls and restrictions on
private trading in grain and seeds, also mean that
systems to distribute agricultural inputs across the
country are inefficient, with the possible exception of
maize seed distribution. Thus, even if fuel were not a
constraint, the GOZ likely lacks the capacity to
effectively distribute inputs to farmers.

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International response efforts
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8. (U) With funding from the European Community
Humanitarian Office (ECHO),FAO plans to assist about
300,000 families of communal farms with seed packs.
This number comprises approximately 30% of communal
farms, and is slightly smaller than the number of
households assisted last year. Several donors have
funded NGOs to distribute seeds to the most vulnerable
populations. This year, it seems clear that the GOZ
will allow NGOs to import seeds, unlike prior years,
but there is again confusion over import procedures,
inspections, and the seed varieties that will be
permitted - hybrid varieties or open pollinating
varieties. (Note: There were similar problems during
the previous planting season. End note.) NGOs
currently plan to provide approximately 2000 MT of
seeds.


9. (U) USAID continues to provide humanitarian
assistance in Zimbabwe. In FY 2005, USAID provided
some $200,000 to FAO to coordinate agricultural
recovery efforts. In addition, USAID has funded three
NGOs for livelihood/agricultural support to affected
households. Activities are primarily in the form of
nutrition/household vegetable gardens and drip
irrigation.

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Comment
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10. (SBU) The Mission concurs with the FAO assessment
that, despite some positive signs, the declining
economy will virtually guarantee another poor harvest
in 2006. Notwithstanding good predictions of rain and
generally good seed availability, the economic decline
and acute foreign exchange shortage will be overriding
factors. During a trip to Bikita in the Midlands, we
also found good supplies of maize seed and fertilizer
available on the commercial market. However, the
prices, reflecting the precipitous exchange rate
decline of the Zim dollar, put the supplies beyond the
reach of most farmers. Their meager incomes have not
grown apace with the prices of inputs, which are
largely imported, and thus on average ten times more
expensive than (in Zim dollars) than last year.


11. (SBU) The insufficient income of poor households
and the inefficient government-controlled distribution
systems mean that the 2006 harvest may be even worse
than the disastrous 2005 season. Moreover, the largest
farmers, the politically-connected A2 farmers, who
should be the backbone of production are reliably
reported to be reselling their subsidized allocations
of fuel and fertilizer on the black market at great
profit rather than using them for agricultural
purposes. Under such circumstances, food insecurity
and the need for humanitarian support will continue in
Zimbabwe for some time. Until the GOZ turns around its
economic mismanagement, enabling agricultural inputs to
be distributed efficiently, timely, and affordably,
Zimbabwe will be vulnerable to food insecurity for the
foreseeable future.

Dell