Land Reform. How Successful?
The success or otherwise of land resettlement in Zimbabwe cannot be judged by how many people are on the land now, but by what is produced, what incomes are earned and whether the economy as a whole benefitted. Joseph Hanlon - an apologist for Zanu-PF's chaotic politically-driven land programme - is either unaware of, or ignores, this crucial point.
It is just one of numerous flaws in his article in which he works hard to avoid confusing his readers with the facts on output, productivity, imports and their macroeconomic implications. In 2000 - the year in which the Fast Track Land Reform (FTLR) took off, Zimbabwe farms produced 3.7 million tonnes of output (excluding estate-grown sugar)). In 2012, the Ministry of Finance estimated output at less than half that (1.7 million tonnes) and just two months ago, the government estimated a 20% fall in plantings for the 2013 season that will translate into lower output this year.
Food and livestock production (excluding beef) collapsed from three million tonnes in 2000 to 1.3 million tonnes 12 years later, with cereal output down 55 percent at 1.1 million tonnes. The country that consumes over two million tonnes of cereals a year and that, prior to land resettlement, was largely self-sufficient in foodstuffs and a substantial exporter of farm produce, now imports some $650 million of food a year, increasing to $731 million in 2012 or 11 percent of total imports.
Understandably given that he is writing a party-political polemic, not serious journalism, Hanlon fails to mention these inconvenient truths preferring to focus on some extremely dubious employment and farm occupation data. According to Hanlon "white farmers" employed "about 250 000" workers. In fact, employment on formal sector farms (as distinct from "white" farms, whatever a "white" farm was) peaked in 1997 at over 350 000 workers and averaged over 330 000 a year right through the 1990s. Such clumsy disregard for the facts typifies his approach.
The latest annual figure (2010) shows a total formal farming sector figure of 388 000 - the bulk of whom (287 000) were employed on resettled farms. A further 101 000 were employed on large scale commercial farms, or in Hanlon's racist terminology "white" farms. In fact, these are not "white" farms at all, but properties owned by the state, by local and foreign corporates and by Zimbabweans of all races.
These data show that between 2000 and 2010, a total 224 000 jobs were lost on large-scale commercial farms (Hanlon's "white" farms) while 287 000 jobs were created on resettled farms - a net gain of 63 000 jobs in ten years or 6000 a year, during which time the population of Zimbabwe increased by one and a half million people. Hardly a measure of success of which Zimbabwe can be proud.
Numerous other inconvenient truths spoil Hanlon's Zanu-PF panegyric. World Bank data that he quotes with approval show that agricultural value added in constant 2000 prices in 2010 was lower than at Independence in 1980 and less than half its peak in 2001. Output per worker in agriculture rose by a third between 1980 and 2001 but by 2010 had fallen 56 percent. Then there are the latest wage numbers which show that farm workers on resettled farms earn between a third and a half of those employed on large-scale commercial farms, while taken across agriculture as a whole, the average wage is less than 10 percent of the non-farm average.
Just how Hanlon et al can conclude from these data that land resettlement has been a success is best left for them to explain. But this aspect aside, their arguments need to be viewed in a developmental context. One might have hoped that Hanlon's affiliation with the London School of Economics would have opened his eyes to this. Sadly not.
For a start, economic analysis that focuses on a particular industry or sector to the exclusion of all others - as Hanlon's does - is seriously misleading. Hanlon's analysis ignores the spillover effects of land resettlement elsewhere in the economy. The fact is that - regardless of how many people found poorly-paid jobs in agriculture - land reform sparked a 40 percent decline in Zimbabwe's GDP. By mid-2012, non-farm formal sector employment at around 800 000 was 250 000 less than in the late 1990s, four times the gains in agriculture claimed by Hanlon. In 2012, per capita incomes at constant prices were one-third lower than in 2000 and even below their 1960 levels. (World Bank database).
After 2000, national savings and net investment turned negative as incomes plummeted and investors took fright at the disregard of property rights and the rule of law, which of course, extended to the conduct of elections in 2002 and 2008. Another inconvenience left unmentioned by Hanlon.
Manufacturing and agriculture in Zimbabwe were - still are - closely integrated. The collapse in farm output (ignored by Hanlon) is mirrored by Zimbabwe's de-industrialization. Manufacturing output - in volume terms - was lower in 2012 than in 1980 and two-thirds below its peak. Land resettlement far from putting Zimbabwe on a developmental path has thrust it onto a minerals-driven resource path, whereby the economy continues to de-industrialize.
During the process of economic development typically labour shifts from agriculture to manufacturing and services. One of the drivers of Chinese growth, for example, has been the shift of surplus workers out of low-productivity farming into higher productivity sectors of the economy. Land resettlement in Zimbabwe has had the precisely opposite effect, thereby perpetuating low productivity and incomes in agriculture. Over time employment in agriculture, as a proportion of the total, must - and will- fall, if productivity and living standards are to rise.
Worse, his article shows no understanding of the modern role of agri-business as distinct from agriculture aside from his reference to contract farming - a model which itself is plagued with numerous problems as anyone engaged in cotton or tobacco in Zimbabwe will attest.
What Hanlon sees in purely racial terms - taking back land from whites - was much more than that. Land resettlement switched resources - workers and capital - from a relatively high-productivity commercial farm sector, able to develop agribusiness linkages with manufacturers and retailers in Zimbabwe and abroad, to a low productivity, smallholder sector where the difficulties of building such links are far greater. In agriculture, value-addition is concentrated at the downstream end of the value chain and unless farmers can participate in value chains they will be left behind. Hanlon's failure to even mention the devastating impact of land resettlement on industrial production and thereby on value-addition highlights his political and racist myopia.
Leaving aside such tiresome economic realities, perhaps the most depressing aspect of Hanlon's work is his blithe disregard of institutional economics. If Hanlon and his ilk are to be believed, corruption, the rule of law, democracy and human rights have no role to play in the development process. The fact that 13 years after the land reform programme, the same men and women - in politics, business, government and the security services - are using precisely the same language and arguments to justify expropriation of mines and businesses, is studiously ignored. By condoning if not glorifying such conduct, Hanlon et al have demonstrated that in their view the end justifies the means. In the process, they ignore the 60 percent of the Zimbabwe population that live in poverty and the 50 percent (minimum) formally unemployed while simultaneously demonstrating their ignorance of the crucial role of strong institutions in the development process.
Quite what Hanlon's article was meant to achieve is far from clear. Is it just a plug for his book? Is it intended to win votes for Zanu-PF at the forthcoming election? Revisionism of this kind might be good for selling books or even winning votes but it adds nothing to the serious debate about the role of agriculture - and more specifically smallholder agriculture - in economic development in the new normal global economy of today. A sorry comment not just on Hanlon's journalism but indeed on the LSE.
Tony Hawkins is Professor of Economics at the Graduate School of Management at the University of Zimbabwe. He writes about Zimbabwe in the Financial Times.
The article was first published in the German magazine welt-sichten ( www.welt-sichten.org ).
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