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 259

Southern African countries, bureaucratic impediments and poor administrative structures
that fail to accurately anticipate demand and supply and price trends have tended to increase
the cost of grain to the disadvantage of the poor consumer, both rural and urban based. This
results in inefficient grain supplies to the deficit areas. Informal trading by small dealers and
millers naturally develop to fill this gap but they work best when distances between surplus
and deficit zones are small and road and travel conditions allow for supplies to be easily
accessed. Where movement of grain involves transportation across two country boarders,
the role of informal traders in grain provision tends to dampen.
11.2 Maize commodity marketing and the emergence of informal markets
in Zimbabwe
The fast track land reform programme (FTLRP) of 2000 in Zimbabwe featured ad-hoc
policies and accelerated institutional reforms within the agricultural sector. As such,
agricultural markets for most products were affected. Although technically efficient, state
marketing systems which used to be dominant in Zimbabwe proved to be economically
inefficient and regressive, thus having negative effects on both growth and equity
(Rukuni, 2006). These inefficiencies were brought about by monopoly power and pricing
inefficiencies, inappropriate bureaucratic procedures and the restrictions on trade between
communities in different areas ( Jayne et al. , 2006). At the same time, the ensuing marketing
controls implicitly taxed the poorest rural people some 20-30 percent of potential producer
prices in most years.
Cereal marketing in the formal markets of Zimbabwe has for the recent past (2000-
2008) been constrained by low production and market irregularities. The fast track land
reform programme (FTLRP) in Zimbabwe coincided with frequent droughts and hyper-
inflationary environment in Zimbabwe, which caused uncertainties in the agricultural
sector. According to a study conducted in Mwenezi District of Zimbabwe, the district is
inherently dry, with rainfall averaging 500 mm/year. As such, cattle ranching have been
the dominant commercial activity among large scale farmers, augmented by game farming.
Mwenezi District post fast track land reform programme saw the subdivision of the cattle
ranches into small and medium sized farms occupied by beneficiaries of the land reform
programme. This saw the introduction of crop farming in these areas together with small
scale cattle rearing at household levels.
Traditionally, the Grain Marketing Board (GMB) of Zimbabwe served as a government
strategic grain reserve for the country. Its main responsibility is to buy all cereal produce
from farmers and subsequently sell the cereals to millers, institutions and individual
consumers at affordable prices. GMB is the sole importer and exporter of government
cereal products. Since 2000, GMB has been affected by cash shortages, weak pricing
structures, transport and fuel shortages. The effectiveness and efficiency of the Grain