COMMERCIAL FARMERS IN ZIMBABWE SEEK COMPENSATION

C O N F I D E N T I A L SECTION 01 OF 03 HARARE 000333 SIPDIS AF/S FOR B. WALCH DRL FOR N. WILETT ADDIS ABABA FOR USAU ADDIS ABABA FOR ACSS STATE PASS TO USAID FOR J. HARMON AND L. DOBBINS STATE PASS TO NSC FOR SENIOR AFRICA DIRECTOR MICHELLE GAVIN E.O. 12958: DECL: 04/21/2019 TAGS: PGOV PREL EAGR PHUM ASEC ZI SUBJECT: COMMERCIAL FARMERS IN ZIMBABWE SEEK COMPENSATION FOR SEIZED FARMS Classified By: Ambassador James D. McGee for reason 1.4 (d) -------------- SUMMARY -------------- ¶1. (C) Trevor Gifford, president of the Commercial Farmer's Union (CFU),met with the Ambassador on April 15 to discuss a shift in strategy his organization is adopting regarding seized and threatened commercial farms in Zimbabwe. The CFU's new position is to seek compensation of up to US$20 billion for commercial farmers who have been victimized by Zimbabwe's chaotic land reform program. The idea may appeal to both MDC and ZANU-PF officials who recognize that the land issue is a hurdle to renewed investment. All parties recognize that the money would have to come from international sources, an extremely unlikely development. Meanwhile, recent violence and disruptions at farms spurred an investigation and site visits by Deputy Prime Minister Mutambara and other MDC and ZANU-PF Cabinet officials. END SUMMARY. -------------- Farmers Seek Compensation Not Return of Land -------------- ¶2. (C) Gifford requested the April 15 meeting to discuss the CFU's shift from a strategy focused on protecting individual property rights, to one focused on gaining compensation for seized farms. The CFU believes that by making the issue compensation-based, rather than property-rights based, farmers stand a chance of taking the emotion out of the discussion and finding common ground with President Mugabe and ZANU-PF leaders. Gifford also recognizes that two-thirds of the commercial farmers he represents no longer want to farm and are only seeking compensation. ¶3. (C) The CFU has contracted with a local valuation firm, The Valuation Consortium, to develop a methodology for valuing Zimbabwean farms. The professional quality model is in the final stages of completion and combines farm specific factors -- hectarage, buildings, irrigation systems -- with detailed environmental factors such as soil quality and expected rainfall. The database is populated with data provided voluntarily by farmers who view it as both a record of their ownership, as well as a basis for negotiations in the event compensation is ever paid. The CFU estimates that about 60 percent of all seized farms are represented in the database. ¶4. (C) Using this model and regional comparable farm sales -- there hasn't been a viable farm real estate market in Zimbabwe since land seizures began in 2000 -- Gifford intends to announce a total debt of US$20 billion due to current and former farmers. This tally includes current land values based on the model, as well as rents due during the period where owners were forced to vacate their farms. It does not include lost productivity as this is not an internationally accepted compensation metric. Gifford intends to start high and negotiate down from this figure. Qand negotiate down from this figure. ¶5. (C) Unexpectedly, in a recent meeting between the CFU and Agricultural Minister Joseph Made (ZANU-PF),Made acknowledged that government had a responsibility to compensate farmers for land improvements. Made thought US$1.5 billion was a more appropriate figure. A CFU representative told us this was the first time a high-ranking ZANU-PF official had acknowledged that debt, despite its basis in Zimbabwean law. (NOTE: Constitutional Amendment 17 placed certain categories of land under state ownership. The HARARE 00000333 002 OF 003 intent was to give the government the authority to redress historical wrongs by taking land from white commercial farmers and giving it to landless black Zimbabweans. The Ministry of Lands and Rural Resettlement is responsible for managing this process through the issuance of offer letters that entitle the recipients to possession. ZANU-PF has taken the position that pursuant to the Lancaster House Agreement under which Zimbabwe gained independence, the UK government is responsible for compensation to dispossessed white farmers. END NOTE.) -------------- --- Making Land Issue Go Away in Everyone's Interest -------------- --- ¶6. (C) The CFU is proposing to senior members of government -- including Prime Minister Morgan Tsvangirai and both MDC and ZANU-PF ministers -- that Zimbabwe form a land compensation and investment fund. This fund would provide loans to new farmers who want to buy out commercial farmers. Gifford recognized that the GOZ was broke and this strategy would need to rely on international financial support. ¶7. (C) Gifford thought the idea might appeal to both ZANU-PF and MDC elements in the government, because resolving the land issue would remove a major impediment to renewed donor and private investment. Compensation for farmers is also consistent with Zimbabwean law that makes the GOZ responsible for any improvements such as buildings, irrigation systems, and equipment. According to Gifford, these improvements actually account for up to 90 percent of the farm,s value. -------------- New Offer Letters Surface; Violence Continues -------------- ¶8. (C) Gifford reported that several hundred of the 400 to 600 remaining commercial farmers have been faced with fresh demands to vacate their farms based on newly-issued offer letters. These letters all appear genuine, but bear dates that pre-date the new unity government. Gifford said that they are newly-issued letters that have merely been post-dated. A common refrain from these new owners is that they had previously chosen not to execute the letters, but now wanted to assume ownership. ¶9. (C) Post has received new reports of farm disruptions and violence since the Easter holidays. Many of these occurred in the Chegutu district of Mashonaland West. At one Chegutu farm, a farm worker was severely beaten and suffered a broken skull, before being thrown into a fire. He survived. At nearby Stockdale Farm, invaders forced a halt to operations, threatening a US$2 million citrus crop. They also beat to death on April 19 an area resident who was caught stealing oranges from a tree. Stockdale Farm has been threatened by Senate President Edna Madzongwe since 2007. Madzongwe has ignored four High Court ruling favoring the owners, and has Qignored four High Court ruling favoring the owners, and has already seized eight other farms. ¶10. (C) In response, Tsvangirai directed a team of ministers to visit farms on April 17 and investigate the reports of violence. The team was led by Deputy Prime Minister Arthur Mutambara (MDC-M),and included Home Affairs Ministers Giles Mutsekwa (MDC-T) and Kembo Mohadi (ZANU-PF),Agriculture Minister Joseph Made (ZANU-PF),Lands Minister Herbert Murerwa (ZANU-PF),and Minister of State Gordon Moyo (MDC-T). Mutambara was highly critical of the invasions after visiting several farms, and accused the invaders of "reaping where you did not sow." He also said, "The next time Mugabe denies that there are fresh land invasions I can say that is HARARE 00000333 003 OF 003 not true. I saw it for myself." At the Mount Carmel farm in Chegutu that was seized by Mugabe biographer and former Information Minister Nathan Shamuyarira, Mutambara ordered the invaders off the land and chastised the police for not maintaining order. Shamuyarira's supporters left, only to return an hour after Mutambara left to chase off the owner, Ben Freeth, and his employees. This was mirrored at the other farms Mutambara visited, including the French-owned Twyford farm in Chegutu that falls within the scope of the Bilateral Investment Protection and Promotion Agreement between Zimbabwe and France. After Mutambara left, ZANU-PF Senator Jamaya Muduvuri was reported to say, "I am a ZANU-PF senator and the MDC will not tell me what to do on this farm. It is my farm and I will not allow this French woman to come back here or reap her crops." -------------- COMMENT -------------- ¶11. (C) Although legal issues exist in the recent spate of farm invasions -- whether offer letters are genuine, the lack of due process in executing them, and compensation for expropriated property -- the fate of remaining white farms is ultimately a political rather than a legal issue. This is because, as noted, the existing Zimbabwean Constitution (Amendment 17) vests ownership of designated agricultural land in the State. Realizing the importance of agriculture to Zimbabwe, the MDC hopes that an accommodation can be reached with ZANU-PF to allow most of the remaining white farmers and conservancy owners to maintain possession of their properties. It hopes that the Mutambara-led visit will embarrass Mugabe and ZANU-PF into reaching such an accommodation. More embarrassing would be the MDC-promised land audit, as called for by the Inter-Party Agreement, which would highlight the rapacious farm appetites of Madzongwe and her like. ¶12. (C) Land has become a symbol for ZANU-PF of colonial exploitation, and the mantra of land long served as a smoke screen for ZANU-PF as it corruptly dispensed patronage and attacked the West. In an April 15 courtesy call by the Ambassador on Minister of Local Government Ignatius Chombo, Chombo spent the better part of an hour proclaiming the importance of land to the Zimbabwean people. Although he told the Ambassador that once the land issue was settled ZANU-PF and the MDC could go forward in harmony, we suspect Chombo and other Mugabe cronies will continue their efforts to stay in power by undermining the MDC. ¶13. (C) Having run out of options, the CFU appears to be setting down a marker in the hopes of future compensation. Prospects of this of course are dubious. The CFU may also be hoping that this will reduce tensions, and lead to arrangements whereby remaining farmers can remain on their farms. END COMMENT. MCGEE