Recent changes in markets and market relationships and lessons for the design of effective support programmes - Institutional Constraints to Small Farmer Development in Southern Africa - page 257

11. Recent changes in markets and market relationships and
lessons for the design of effective support programmes 2
Binganidzo Muchara and Ajuruchukwu Obi
Abstract
As a result of poor planning and inappropriate procedures for beneficiary selection, the
land reform programme in Zimbabwe resulted in a drastic decline in production and
productivity of the agricultural sector. At the same time, the perceived political agenda of
the process sparked off a reaction in the investment climate that manifested in worsening
balance of payments, reduction in industrial production, and growing unemployment. It is
safe to conclude that the Zimbabwean land reform programme resulted in an economy-wide
decline in effective demand occurring simultaneously with a sharp fall in physical agricultural
output as appropriated farms lay idle and poor farm practices depressed productivity levels.
A low-equilibrium trap thus ensued, culminating in the deterioration of livelihoods across
the broad spectrum of society as a hyper-inflationary situation developed and assumed
scandalous proportions. A situation such as this set off chain reactions that touched all
segments of the economy and produced diverse effects, including the disappearance of
markets, the emergence of informal exchange arrangements that represent adjustments to
the aberrant phenomenon of hyper-inflation emerging in the absence of both cash and
goods/services. To date, there has been no systematic assessment of this dimension of the
land reform programme with the aim of drawing lessons that can provide some basis for
developing strategies for revamping the economy now that clear signs are emerging that the
long-running political crisis might soon end. To understand what might have happened,
an initial broad appraisal of specific indicators of agricultural output and prices for the
livestock and maize products has been conducted in one district and formed the basis for
assessing any spatial and temporal patterns in markets and marketing relationships.
11.1 Overview of agricultural commodity markets in developing countries
Low production levels, poor product quality and thin markets characterise the smallholder
sector in Sub-Saharan Africa. Countries in Southern Africa are generally regarded as food
deficit areas whose food requirements are often met through supplementation with donor
hand-outs. Within the same region however, some countries like South Africa, Botswana
and Namibia are performing reasonably well in terms of basic food provision, while the
majority of the countries have been in food deficits for the better half of the last decade.
2 This chapter is in part based on a larger study funded under the 'Small Grants Scheme on Livelihoods
after Land Reform in Zimbabwe' of the Institute of Development Studies of the University of Sussex,
and the comments of Professor Ian Scoones on the draft of the main report are gratefully acknowledged.