Zimbabwe farmers crybabies
FARMERS are mourning over the levies that government intends to charge on the land they occupied following the country’s fast track land reforms.
Chief among the farmers’ concerns is that they will not be able to afford the levies, which have already been roundly condemned by observers as too little.
Nearly 15 years after Zimbabwe embarked on the land reforms to address past historical imbalances in the ownership of land, government earlier last month passed a law that compels beneficiaries of the land redistribution exercise to pay quarterly rentals and a development levy.
The farmers who will be affected are those on A1 and A2 farms, with the former paying a rental levy of US$10 per year and a development levy of US$5 annually per farm.
A2 farmers, who occupy the bigger-sized farms and were meant to become the later-day commercial farmers feeding the nation that plunged to a regional basket case following the land reform programme, will pay a rental levy of US$3 per hectare per year and a development levy of US$2 per hectare per year per farm.
By any measure, these levies are too little compared to the value the farmers should be yielding if they were fully utilising their farms.
For example, for a 100 hectare farm, the total development levy will amount to US$200 per year, while the rental levy will amount to US$300 per year.
This will bring the total to US$500, just a few dollars shy of the poverty datum line as determined by a Consumer Council of Zimbabwe monthly grocery basket for a standard Zimbabwean family.
The fact that these will be payable quarterly means that the burden will even be lighter for the farmers.
The new levies will affect all resettled farmers with permits or 99-year leases and will be used to fund development projects as well as gully reclamation and works related to soil conservation; provision, operation and maintenance of hospitals, clinics, dispensaries, schools, educational facilities and other related amenities; provision and maintenance of dipping tanks; and provision and maintenance of roads.
Obviously, the affected farmers are unlikely to welcome this move having indicated last year that the levies would increase their tax burden, as they were already paying land tax to rural district councils.
But the motive by government is, however, noble.
By forcing them to pay levies, government wants farmers to fully utilise their pieces of land, thereby increasing productivity on the farms in the process.
Vast farmlands issued to new, black farmers are idle across the country, unused because most of the beneficiaries acquired them for speculative purposes.
Most are derelict due to the fact that the new owners do not have the financial wherewithal to utilise the land, or lack the skills and commitment to be productive farmers.
The levy will, therefore, force the new landlords to become more committed and approach farming as a business.
At least 300 000 resettled farmers are expected to pay the levy.
Observers have hit out at the levies saying they are too low, amid suggestions that the ZANU-PF elite, which immensely benefited from the land reforms was actually insulating itself from steep payments.
Farmer organisations whose membership are mainly indigenous blacks, have also expressed reservations over the levies.
The Zimbabwe Farmers Union (ZFU) said while the amounts being charged by government sounded minimal, put against the poor seasons being experienced by most farmers, the fees were hefty.
“It sounds little, when you say US$5 per hectare, but consider that the minimum size held by farmers is 200 hectares . . . When you consider the entire farm size it’s a large amount and it will be a problem for many farmers,” said ZFU president, Abdul Nyathi.
“We have not been producing much as farmers, there has only been one year, and that was the 2013/14 season, when we had good harvests. We need to sit down with government to see how best to deal with the situation we find ourselves in,” he added.
Despite resettled farmers being holders of 99-year leases, financial institutions are sceptical over extending funding to farmers, offsetting a vicious cycle of lack of productivity on the land they had been given by the government.
“As farmers we think that the 99 year leases, if those documents were bankable to banks they would help unlock the capital which farmers need to produce and also to pay for the levies. We need to capitalise farmers, to enable them to pay taxes. The government must avail the right environment; acceptance of the 99 year leases by the banks and allow farmers to partner with those with capital,” Nyathi indicated.
Irene Maphenduka, the Zimbabwe Commercial Farmers Union national livestock chairperson, said the fees being charged by government were on the high side and hence further engagement was needed to reach an amicable solution.
“It’s too much. US$5 as a development levy is a non starter, and maybe US$2 would have been better. We had a position paper as farmers dismissing that figure and we informed the minister on it. For ranchers, it definitely can’t work as they use more land and spend a long time before realising returns on their investments,” Maphenduka said.
Follow us on Twitter on @FingazLive and on Facebook – The Financial Gazette