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 270

Another important finding that merits some discussion is the weak effect of market distance
in the regression results. The initial assumption was that land reform resulted in a wider
dispersion of settlements away from their established markets and business centres. Though
this dispersion is real, and most farmers indicated that maize markets were far from their
homesteads, they still sacrificed to travel long distances to buy the staple products, including
maize. However, the issue of transaction costs becomes important if smallholder farmers
are to remain efficient and viable in the market. Whilst consumers travel long distance to
procure maize and maize meal for domestic consumption, it might be difficult for farmers
to make comparable sacrifice in ferrying their produce to these formal markets for sale,
unless strong market incentives like higher prices and cash payment of products on delivery
are offered. This gap has been identified and manipulated by informal traders who establish
relations with villagers and entrust them with cash to procure maize at low prices, which
will later be collected for resale in other lucrative markets especially in urban areas. Farmers
are therefore trapped between low prices within their localities amid higher prices on very
distant markets associated with higher transactions costs.
Market access, which also goes hand in glove with source of market information by farmers are
some factors that the government of Zimbabwe have to consider to boost formal marketing of
maize by new farmers. Most farmers indicated that they relied on informal channels to access
both the information and the markets. Information is usually obtained through informal
conversations among farmers or through national radio stations. Timing of advertising
messages of critical farming information is normally a challenge to smallholder farmers, who
normally come across such information by chance upon switching on their radios.
11.4 The livestock production and marketing in Zimbabwe
Market liberalization in 1991 and the subsequent growth in private abattoir participation in
the domestic market in direct competition with the Cold Storage Company, the successor
of the Cold Storage Commission was regarded as a major development in the marketing of
beef in Zimbabwe (Sibanda and Khombe, 2006 in Rukuni et al. , 2006).The Cold Storage
Company, which was set up to cater for the European Union beef market, failed to meet its
annual quota despite its monopolistic advantage. Notably, it failed to offer attractive prices
to beef producers due to its cost structure. The drastic reduction of the commercial beef
herd has resulted in the shortage of beef in the domestic market and insufficient volumes
of export quality beef (Sibanda and Khombe, 2006 in Rukuni et al. , 2006). Most high-class
abattoirs, including the Cold Storage Company, were operating at about 20 percent of
their installed capacity during the fast track land reform period (2000-2008) (Sibanda and
Khombe 2006 in Rukuni et al. , 2006).
By 2003, only 5% of formal beef sales went through CSC and by mid-2007, the government
of Zimbabwe announced price controls on beef, and the closing of private abattoirs, with