Freehold ownership key to investment: CFU

HARARE - The Commercial Farmers’ Union (CFU) says government should restore freehold ownership rights in order to unlock the collateral value of agricultural land in Zimbabwe.

As part of its submissions to the 2019 National Budget consultations, the CFU said the main problem facing Zimbabwe’s agriculture and the rest of the economy was the lack of property rights.

“Unlocking the value of this asset would set in place a chain of reactions that could rapidly turn around the current economic situation,” the CFU said.

The land reform programme resulted in significant economic disruption as the full bundle of rights that previously drove commercial agriculture were taken away. The vesting of ownership and control of access to land in the hands of the State destroyed the land market, scaring away the banking sector.

“With internationally recognised collateral, farmers can borrow the necessary finance for farming operations direct from banks and lending houses and cease to rely on government to unsustainably provide the bulk of their necessities,” the CFU said.

The current investment environment in Zimbabwe remains high-risk, both for local and international investors, while Zimbabwe’s ‘‘ease of doing business’’ ranking continues to deteriorate. Currently Zimbabwe ranks 161 out of 190 countries on the World Bank index, and 128 out of 138 on the Global Competitiveness Index.

“With security of tenure, longer term development and capital investment into such things as irrigation infrastructure, dam construction, borehole drilling as well as into plantations, would be assured versus the ‘hit-and run’ agriculture currently being practiced.”

CFU recommended that the closure of the land reform and resettlement exercise will ensure certainty and improve investor perceptions in the agricultural sector.

“This will increase both local and foreign investment as the government lowers investment risk by ensuring land security to allow returns on investments,” the CFU said.

Government has since acknowledged that security of land tenure is a pre-requisite for enhanced investment on farms and agricultural production.

Government has also made a commitment to compensate the former white farmers. As such, a working group, comprising government officials and representatives of former farm owners, is working towards providing a consensus-based compensation framework for evaluating obligations to former farmers. — The Financial Gazette

Comments (3)

In some wealthy countries 90% of the so called upper class became rich because of their ties with the government....i.e via taking people's taxes , land is owned by a few that rule. Free markets does not really mean that. Mr Tom Dzavava born in their country can not just open and operate a business maybe a barber business, it does not work like that.Its a good point there tho , I support it too and I bought the land I have , however a huge population in the country does not have the money to buy hugely priced land , so how do we address e.g unemployment ?? we still need people from Malawi to come and work in low wages farm in Zimbabwe - for white farmers _ living in sick conditions ?. Land rights in the past meant one did not have the right of pass....I have relatives that were shot in Rhodesia after breaking that rule...when few generations back land belonged to the family. I think we need balanced land ownerships ~ all communities must have a share.

Juru - 3 November 2018

There is going to be a lot of terrorism , online especially.....from countries that do not want anything agriculture to succeed if its not the white farmers doing it , previously the sabotage was via sanctions. The problem with our white farmers is their knowledge is limited to tobacco growing . Some could not even write the word tobacco itself, even tho they became millionaires because to the leaf , how sad. Farming is a huge industry we don't all have to be tillers of land. Poverty in the West is a HUGE concern.

Risky West - 3 November 2018

Very true and well said. "The vesting of ownership and control of access to land in the hands of the State destroyed the land market, scaring away the banking sector". Mugabe's family and relatives own about 50 farms which were given free. These farms are largely idle. Why is ED taking so long to effect the 'one' farm policy? Commercial farmers should pay market prices for farms and get title deeds for use as collateral. This does not need a professor to understand. The government can earn billions of $ by selling off all commercial farmland. Give land to the right people who can produce. This thing about Command Agriculture is nonsense. The role of government is to provide an enabling environment for farmers and not to get stuck in Command Agriculture.

Ndiani Ndiani - 4 November 2018

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