Identifier
Created
Classification
Origin
06HARARE281
2006-03-07 16:42:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Harare
Cable title:  

AGRICULTURE EXPERTS PRESENT SOBERING VIEW OF THE

Tags:  ECON EFIN PGOV ASEC ZI 
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FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC PRIORITY 9705
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHUJA/AMEMBASSY ABUJA 1133
RUEHAR/AMEMBASSY ACCRA 0963
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RUEHBS/USEU BRUSSELS
RUEHGV/USMISSION GENEVA 0550
RHEHNSC/NSC WASHDC
RUCNDT/USMISSION USUN NEW YORK 1348
RUEKJCS/JOINT STAFF WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEKDIA/DIA WASHDC//DHO-7//
RUCPDOC/DEPT OF COMMERCE WASHDC
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK//DOOC/ECMO/CC/DAO/DOB/DOI//
RUEPGBA/CDR USEUCOM INTEL VAIHINGEN GE//ECJ23-CH/ECJ5M//
UNCLAS HARARE 000281 

SIPDIS

SENSITIVE
SIPDIS

AF/S FOR B. NEULING
NSC FOR SENIOR AFRICA DIRECTOR C. COURVILLE
STATE PASS TO USAID FOR M. COPSON AND E.LOKEN
TREASURY FOR J. RALYEA AND B. CUSHMAN
COMMERCE FOR BECKY ERKUL
C O R R E C T E D C O P Y (MISSING SENSITIVE CAPTION)

E.O. 12958: N/A
TAGS: ECON EFIN PGOV ASEC ZI
SUBJECT: AGRICULTURE EXPERTS PRESENT SOBERING VIEW OF THE
SECTOR


-------
Summary
-------

UNCLAS HARARE 000281

SIPDIS

SENSITIVE
SIPDIS

AF/S FOR B. NEULING
NSC FOR SENIOR AFRICA DIRECTOR C. COURVILLE
STATE PASS TO USAID FOR M. COPSON AND E.LOKEN
TREASURY FOR J. RALYEA AND B. CUSHMAN
COMMERCE FOR BECKY ERKUL
C O R R E C T E D C O P Y (MISSING SENSITIVE CAPTION)

E.O. 12958: N/A
TAGS: ECON EFIN PGOV ASEC ZI
SUBJECT: AGRICULTURE EXPERTS PRESENT SOBERING VIEW OF THE
SECTOR


--------------
Summary
--------------


1. (SBU) At an agriculture sector roundtable on February 24,
local experts provided a sobering overview of the sector to
visiting USDA crop analyst Dr. Curt Reynolds. Reynolds said
that he expected an increase in maize production over 2005.
A Commercial Farmers, Union representative declined to
forecast production, but said despite ideal rainfall the
harvest would still be relatively modest given late planting,
the lack of fertilizer, and sharp reduction in the area under
production. A representative of the fertilizer industry told
Reynolds that a lack of forex was primarily to blame for the
on-going fertilizer shortages. A representative of the
cotton sector said production would be up this year but would
still fall far short of government estimates. End Summary.

--------------
Good Rains But Delayed Inputs, Less Planting
--------------


2. (SBU) Reynolds said that based on the amount of land under
cultivation and the good rainfall this year he was predicting
an improved maize harvest over 2005. Dr. Carl Levy, plant
pathologist at the Commercial Farmers, Union (CFU) agreed
with Reynolds that rainfall had been &near ideal8 over most
of Zimbabwe since November. However, he noted that there had
been delays in accessing inputs and securing finance and as a
result planting had been late. In addition, there was an
ongoing scarcity of fertilizer and a sharp decline in the
area planted in soybeans and maize. Levy said that the CFU
did not have adequate access to accurate information to
project crop yields and while an improvement was likely over
2005,s extremely poor harvest, he did not expect a
&bumper8 crop.


3. (SBU) Levy attributed the dramatic reduction in the area
under soybean production to a lack of know-how by new
farmers. He pointed out that soybeans were not a traditional
Zimbabwean crop. Soybeans had very different growing and

handling needs than traditional dry beans. In the past, 95
percent of production had come from commercial farmers. Levy
said the area under commercial maize planting was also down
30 percent from the previous season. Compounding the
problem, farmers were retaining hybrid maize seed, the
second-generation yield of which was even lower than that of
open-pollinated seed.

-------------- --------------
Fertilizer ) Forex Shortages and Controlled Prices
-------------- --------------


4. (SBU) Dr. Richard Dafana, Managing Director of Zimbabwe
Fertilizer Company (ZFC),called foreign exchange shortages
and non-commercial pricing his industry,s biggest
challenges. Delays in obtaining foreign exchange had
prevented the timely and adequate production and distribution
of fertilizer. He cited potash for phosphate production as
an example. The industry should have imported it in June or
July 2005, but delays in obtaining forex had pushed out the
delivery date to November/December - too late for phosphate
production and distribution to the tobacco and early maize
crops. (N.B.: The tobacco industry is predicting a fall in
production from close to 80 million kg in 2005 to 50-55
million kg this year, the smallest crop since independence.)


5. (SBU) Dafana said the recently announced nationalization
of the fertilizer industry was unlikely to go forward. He
countered any suggestion that changing ownership or control
would solve the industry,s problems, reiterating the
forex-intensive nature of the business. (N.B.: Since the
roundtable, the GOZ announced that it had scrapped the plan
to buy out the three main privately held fertilizer
companies, including ZFC.)


6. (SBU) Looking toward the impending winter grain growing
season, Dafana said the scarcity of fertilizer supplies would
severely hamper winter wheat and barley production. He also
noted that while chemicals were also in short supply, they
were nevertheless priced right and were not traded on a
secondary market. Chemical shortages were thus not as
critical as the shortfall in fertilizer. Dafana noted that
the sugar estates with access to forex were acquiring
fertilizer by paying above the controlled prices.

-------------- --------------
Cotton ) Better, But No Commercial-Farm Production
-------------- --------------


7. (SBU) John Battershell, Managing Director of U.S.-owned
Cargill Cotton, reported good seed distribution in 2005 at
close to 7,500 tons. He predicted that the crop could come
in at 300,000 tons, an improvement over the 198,000 tons
harvested in 2005. However, the cotton crop would still not
come close to the government,s estimate of 750,000 tons. He
pointed out that cotton, a communally grown arid crop,
&didn,t like wet feet,8 and weed growth had been a
particular problem in this wet growing season.


8. (SBU) Battershell estimated that if large-scale &A28
farms grew cotton, and if GMO seed were allowed in the
country, yield could jump from the present average of 800
kg/ha to 5 tons/ha, or higher. In that regard, he claimed to
have noted some shift in the GOZ,s view on GMOs, with
prospects for GM cotton &furthest along8. (N.B. The
subject of GMOs received heightened press attention recently
surrounding the visit of U.S. academic Tom de Gregori, who
held discussions with the Biosafety Board of Zimbabwe on the
implementation of biotechnology for enhancing agricultural
output. While the GOZ has been traditionally anti-GMO, press
treatment of the visit suggested some softening of the
position.) Moreover, as upwards of 35 percent of South
Africa's maize is now GMO and South Africa does not segregate
GMO from non-GMO, Zimbabwe is already importing substantial
quantities of GMO corn for human consumption.

--------------
Comment
--------------


9. (SBU) Ideal rainfall appears likely to result in improved
agricultural output. Reynolds predicted that the maize
harvest would be between 900,000 and 1 million metric tons
(MT) as compared to 2005,s harvest of 600,000 MTs. However,
this figure is still well below the country,s need and is a
far cry from pre fast-track land reform production levels.
Government policies, specifically insecure property rights,
unaddressed structural failures in the input and output
markets, and the failure to get qualified farmers onto the
productive land and support them adequately, will deny
Zimbabwe what could have been a bumper 2006 harvest.
DELL