Thursday, 28 July 2011 02:00
By Johnson Siamachira
Thirty-two-year-old Clement Moyounotsva from Mutema Village in Chipinge, in Manicaland Province would probably be the first to admit that engaging in high-value smallholder agribusiness has been far from easy.
However, since taking the bold step of engaging in growing not only food but also the local economy, he has learnt that smallholder farmers must be able to compete in local, national, regional and global marketplaces.
The Chipinge smallholder paprika farmer is involved in as many of the steps that food goes through between the farm and the table as possible, a process called the value chain. The further up the value chain farmers can sell at, the higher their value.
‘'My income has steadily increased through getting help to access quality agricultural inputs and advisory services, and linking me to markets where I can sell my produce,'' says Moyounotsva.
In economic terms, there is widespread recognition that more business-focused agriculture - and the development of small agri-businesses - is an important driver of food security, export expansion and economic growth and development. Moyounotsva is living proof of that.
He is one of the country's small but growing number of agripreneurs - rural-based smallholder farmers who have managed to set up their own businesses to make a better income and improve their livelihoods. He is also one of 160 smallholder irrigation farmers at Mutema Irrigation Scheme in Chipinge.
Between 1998-2008, Zimbabwe experienced socio-economic challenges and high frequency of extreme weather conditions. Before 2009, the economy was characterised by hyperinflation, a shrinking Gross
Domestic Product as well as a shortage of foreign currency.
Agricultural productivity was adversely affected by the unavailability of effective technical support due to the flight of skilled extension personnel to greener pastures within and outside the borders due to public service and private sector meagre salaries.
Between 1990 and the year 2000, high-value crops in the horticulture sector were the second largest agricultural foreign exchange earner after tobacco. At its peak in 1999, export earnings from the sector were US$144 million, according to the Horticulture Promotion Council of Zimbabwe.
And the end of fixed prices guaranteed by marketing boards has prompted growing numbers of producers to change the way they do business and look for more efficient ways of making a living from the land. One approach is diversification - moving out of traditional crops, such as maize, to high-value crops, like paprika and sesame.
But, can smallholder farmers in Zimbabwe benefit from the expanding markets for high-value agricultural products?
As part of this process of work, a United States Agency for International Development-funded programme, Restoring Livelihoods - Strengthening Value Chains (REVALUE) is illustrative of this value chain development approach.
Started in October 2009 and implemented by the development organisation, International Relief and Development (IRD), REVALUE supports 8 500 local smallholder farmers to increase the production and commercialisation of groundnuts, sesame, sugar beans and paprika in Buhera, Chimanimani and Chipinge districts in Manicaland.
Using a voucher system, IRD works with REDAN Profoods, a national agro-dealer company, to revive the once vast network of agro- dealers and increase the access of vulnerable but viable farmers to agricultural inputs, such as seeds, fertiliser and tools.
After venturing into paprika, Moyounotsva has never regretted. When he finished secondary schooling in 1999, he went to Harare, the capital, where he landed a job in a computer repairing company. But, it was not easy as business was at low ebb. He returned to till the land in Mutema in 2009.
Moyounotsva participated in training workshops that focused on increasing the income of smallholder farmers. "It is this new-found farming knowledge that I later used productively and profitably to access more demanding markets,'' he said. Before that, there was an absence of ready markets for the farmers' crops, affecting the viability of the scheme, with some of the smallholder farmers considering abandoning the business.
In the 2010/2011 agricultural season, Moyounotsva engaged in contract farming with a private company, Capsicum.
At first, he feared that agri-business firms might exploit smallholder farmers by manipulating the terms and conditions of contracts to their benefit.
But, there is growing evidence that the advantages associated with institutional marketing outweigh its disadvantages.
One of the major challenges in the transition to high-value agriculture is smallholder farmers' lack of access to markets for high-value commodities. "With contract farming, you are assured of a ready market for your crop,'' says Moyounotsva.
Through the programme, whose funding concludes in September this year, he accessed agricultural inputs such as seed, fertiliser and chemicals through a US$209 loan and produced 1 157kg of paprika and pocketed US$1 384.
Another farmer at the Mutema Irrigation Scheme, 40-year-old Innocent Mubariri, harvested 1 180kg of paprika valued at US$1 248 as the quality of his crop was lower than Moyounotsva's.
Mubariri says: "We used to concentrate on producing low paying crop varieties. Now, with paprika, my family's livelihood has improved.'' With part of the income, Mubariri is constructing a five-roomed house and is able to pay school fees for his four children.
‘'Accessing food has vastly improved because I can now purchase sugar, cooking oil, soap and flour in cartons, a development I never dreamt of in my life.''
Agro-dealers who were forced out of business due to the economic challenges, are now back in operation. Chipinge agro-dealer Joseph Mazengwa, who joined the scheme in March last year, says his business has witnessed an annual growth rate of between 5-10 percent as a result of his participation in the scheme. Farmers access agricultural inputs through his agro-dealer shop.
The agro-dealers have been linked with farmers and financial institutions to enable them access loans. The agro-dealers were paid between US$800 and US$1 000 depending on the range of distribution.
As a result of this success, some banks were now availing as much as US$200 000 and US$500 000 to large-scale agro-dealers depending on the latter's securities.
The programme has improved smallholder farmers' income earning capacities as demonstrated in Buhera.
For a decade now, the beginning of every school term had been a source of stress for Beauty Mugumbate of Maupa Village in Buhera District, where she is engaged in dry land farming. At 63 years old, Mugumbate has been the sole guardian for five grandchildren who were orphaned when their parents died.
This is now a thing of the past as she can easily pay school fees for all of them. Mugumbate made US$900 from her groundnut crop during the 2009-2010 agricultural season, after joining the programme. In 2008-2009, she only made US$400.
The REVALUE Area Co-ordinator for Chipinge and Chimanimani districts, Edward Madewokunze, says smallholder farmers should now shift from its current largely informal status into the formal business sector, with a more structured system that particularly targets the young.
When it works, says Madewokunze, smallholder agribusinesses can help rebrand agriculture as an attractive career, especially for the youth.
The programme works alongside district extension agencies such as Agritex - the Government's agricultural extension arm, and local authorities. At community level, IRD works in consultation with community
leaders like chiefs, councillors and kraalheads.
David Chikodzore is the programme's Chief of Party in Manicaland. He calls for a new image for the sector, particularly for the smallholder farmers: ‘'Agriculture has to be seen as a business, with opportunities to make money and create wealth,'' he said.
Good agricultural training is essential. But so too is training in business skills, marketing and Information and Communication Technologies (ICTs). Agripreneurs need to know about costing and pricing, breakeven analysis, production planning, marketing, bookkeeping, contracts and financing.
‘'The smallholder farmer needs to have a clear idea of market forces. What do consumers really want, and what will they pay a premium for,'' says ZimTrade acting chief executive Mr Crispen Tsvarai. ZimTrade is the national trade development and promotion agency.
His organisation is working with smallholder horticulture farmers to attain Global GAP certification This is a globally recognised agricultural quality certification scheme which will enable access to lucrative export markets by farmers.
"One of the first hurdles facing an agribusiness entrepreneur is often selling the business plan to the financier,'' says Tsvarai.
However, Moyounotsva's efforts to run his paprika agribusiness seemed to fail before the REVALUE programme came to the rescue by brokering a loan and contract farming through a local bank, and Capsicum. ‘'I couldn't have done it alone,'' he admits.
Smallholder farmers do not have to do it alone. Joining with others to form an effective value chain has proved a winning strategy for smallholder farmers in Manicaland.