Zimbabwe

FEWS Zimbabwe Monthly Food Security Update 18 Aug 2003 - Local currency shortage increases hardships

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Summary

The previous ZIMVAC estimates of food aid required and people needing emergency food assistance between April 2003 and March 2004 have been revised upward to 5 million people and 465,000 MT following the increase in the Grain Marketing Board's (GMB) maize selling price.

Limited progress has been made in August 2003 to close the cereal gap. Only 25,800 MT of maize were imported by the GMB during the period under review, reducing the total cereal gap from 844,269 MT to about 818,464 MT.

Supplies of most basic food stuffs such as bread, maize meal, and maize grain, cooking oil, milk and flour have improved in most urban centres in August 2003. However, limited purchasing power constrains access for many households throughout the country.

The cost of living for all sections of the urban poor continues to increase, seriously compromising food security for this group.

Prospects for the 2003/2004 agricultural season are bleak, regardless of agro-climatic conditions, because of shortages of fertilizer, crop and livestock chemicals, seeds, fuel and agricultural equipment spare parts.

The shortage of local currency is undermining a) access to food by most urban dwellers, b) access to agricultural inputs by smallholder farmers, c) incomes for the informal sector workers and d) productivity of the formal sector's labour forces through loss of productive labour hours in bank queues.

Foot and mouth disease outbreaks in areas of Harare previously free of the disease pose a serous threat to both the beef and dairy industry in the country.

1. Current Food Security Situation

1.1. Diminishing Food Security Crisis

Maize grain, cooking oil and bread supplies are stable in most areas of the country with maize meal resurfacing in the formal markets after an absence of more than twelve months. Sugar and wheat flour, however, can still only be found in the parallel markets.

A survey carried out by FEWSNET in Harare and Chitungwiza cities supports this claim, as it shows a significant increase in the number of households in low income suburbs reporting availability of the major food stuffs in June 2003 compared to six months earlier. The percentage of respondents readily finding maize grain and maize meal went up to 71 and 23 percent, respectively in June, from 17 and 3 percent in January 2003. (See Table 1). However, maize meal is still relatively more difficult to find compared to maize grain.


Table 1: Percentage of H/Hs Reporting Food Item Availability in January and June 2003
Jan-03
Jun-03
Maize Availability
%
%
Readily
17
71
Occasionally
41
18
Not Available
42
11
Maize Meal Availability
%
%
Readily
3
23
Occasionally
62
60
Not Available
35
18
Bread availability
%
%
Readily
28
37
Occasionally
65
61
Not Available
7
2
Cooking Oil Availability
%
%
Readily
16
72
Occasionally
80
26
Not Available
4
2
Source: FEWSNET

The government disbursed Z$857million, the first portion of the 12.5 billion it has allocated for food relief, to rural and urban councils in the eight provinces of the country at the end of July and the early part of August 2003. The food relief programme is intended to meet the needs of around 3.1 million people. Able-bodied persons will be expected to participate in public works programmes for which they will be paid a food relief allowance of Z$10,000 per month. Elderly, chronically ill, and disabled people and child-headed families are not required to work for the money. If this program is implemented as it was last year, and only one member per household is eligible to participate, the cash payment per month will be just enough to purchase around a month's supply of maize grain for an average sized household at the parallel market maize prices currently prevailing in the traditional grain surplus districts. In the traditional grain deficit districts the government's monthly food relief allowance will allow a household to buy just about half the monthly cereal requirements of an average sized household. If the GMB continues to supply food at subsidized prices, increasing the volume and frequency of these supplies over time, and if the food relief is paid regularly, the food security situation will certainly improve in the targeted areas.

1.2. Continuing Food Security Crisis

Even though supplies of most basic commodities have improved on both the parallel and the formal market, the majority of market-dependent households can not afford to meet all of their food needs given their limited incomes and the extremely high prices at which these commodities are trading. Price controls have failed to arrest price increases and protect poor people from the ever-escalating prices. All primary food stuffs are being sold for much more than the government-stipulated prices. For instance, maize prices at Mbare Musika have increased from Z$166/kg in July 2003 to Z$211/kg. In Bulawayo's City Center market maize is now going at about Z$560/kg, up from Z$440/kg two months ago. While the going price for a 2kg pack of sugar is Z$ 1,800, the government insists it should be sold for Z$330 (see Table 2). The market price of maize meal is over 590 percent higher than its stated controlled price.


Table 2: Market prices of selected food items compared to their controlled prices (in Z$)
Food Item
Prevailing Prices
Government Prescribed Prices
2kg sugar
1,800
330
20kg maize meal
19,000
2,748
5kg wheat flour
7,500
2,909
A loaf of bread
950
250

Following the increase in the GMB's selling price for wheat and maize, millers and bakers have asked the government to review the prices of maize meal and bread. Indications are that the government is going to peg the new controlled prices of bread and maize meal very close to the currently prevailing market prices.

1.3. Emerging Food Security Crisis

Due to input supply problems and financing constraints, Zimbabwe's 2003/2004 agricultural season promises to be a poor one even if the rainfall situation turns out to be good, as suggested by the Meteorological Offices' preliminary forecast.

Seeds of major food crops are in short supply. Only about 61 percent of the estimated national maize seed requirement of 40,820 MT is available and the known maize seed stocks are about 52 percent of those available at the same time last year (see Figure 1). Farmers will be left with no option but to plant part of their grain and the less preferred open pollinated maize varieties which may be available in the SADC region if the foreign currency to import them is secured soon. Although the known stocks of sorghum seed available for the 2003/2004 agricultural season are more than double those available for the 2002/2003 season, they are 12 percent short of national requirements. Millet seed from commercial sources falls almost 80 percent short of the estimated national demand.


Figure 1: Recent Trends in Seed Availability of Major Food Crops Compared to National Requirements

Source: SADC Seed Security Network & FEWSNET


Commercial groundnuts seed stocks, currently at 2 percent of national requirements, are most critical. It should be noted that most of the sorghum, millet and groundnut crops grown in Zimbabwe are produced from farmer-retained seed, not commercial supplies. The above analysis has not taken farmer retained seed stocks into account.

While the Zimbabwe Farmer's Union (ZFU), a body that represents the smallholder farmers, estimated that about Z$600 billion is required to support agricultural activities in the forth coming season, the government announced a plan to raise just Z$100 billion for the agricultural input support programme.

At the same time, financial support from private agribusinesses has been compromised due to a breach of finance contracts by smallholder farmers during the current marketing season. For example, the Cotton Company of Zimbabwe, a major cotton ginning and exporting company in Zimbabwe, lost millions in potential revenue in the current marketing year as farmers to whom the company had advanced seed, fertilizer and chemical credits last cropping season circumvented the company and sold their cotton instead to new cotton companies that invested nothing in growing the crop. The GMB suffered similar losses from its maize and wheat input support schemes. Some seed houses which supplied the parent seed, chemicals and technical assistance to contracted farmers are having serious problems obtaining the produced maize seed from the farmers who are side-marketing the seed for higher returns. The Cotton Company of Zimbabwe is taking the matter so seriously that it has withdrawn its Z$3 billion input assistance scheme and it is lobbying the government for legislation that will protect such investments in the future. Farmers will, therefore, find it increasingly difficult to raise the money they need for the coming season.

Smallholder farmers' access to seed and fertilizer will be limited not just by limited supplies, but also by the increased prices at which they are currently trading.


Figure 2: Fertilizer and Hybrid Maize Seed Price Trends

Source: FEWSNET

The past twelve months saw the price of hybrid maize seed increase by 645 percent, from Z$192/kg to about Z$1,428/kg (see Figure 2). Of the two fertilizers being monitored, Compound D, which is used for basal dressing, increased the most during the period August 2002 through to August 2003. In the same period ammonium nitrate gained 38 percentage points from Z$105/kg to Z$145/kg.

The foreign currency shortage continues to limit the availability of other critical agricultural inputs, the most important of which are farming machinery repair and maintenance spares, fuel and fertilizers. Consequently, yields for the 2003/2004 cropping season are going to be below normal even if the climatic conditions turn out to be good.

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