HomeAgricultureLand reform: The overlooked compensation option in Zim

Land reform: The overlooked compensation option in Zim

SOLUTIONS to difficult problems often come from unexpected places.

The Brett Chulu Column

It has happened to me several times. In my undergraduate studies, I did a dissertation in an operations management area. I just got tired of manually solving a series of complex equations in the field of stochastic processes.

It then just occurred to me that if I married two ideas I had learned in two of my undergraduate mathematics courses, I could get rid of the cumbersome calculations. So I came up with an algorithm that could be fed into a mathematics software programme.

When I showed my supervisor the algorithm, he looked at me in disbelief — he punched several figures into his computer. He tried once, twice, thrice — the thing was working. The maths was solid. Solutions come from unexpected places.

In the land reform debates, two ideas stand out. There are those who are of the opinion that all land acquired should be returned to evicted farmers, full stop. Their argument is that it has been almost two decades since land was acquired and there is nothing to show for it. That is one extreme.

The other school advocates for patience and argues that new farmers need more time and institutional support. They cite recovery of tobacco production. They argue that what is done is done — we cannot return acquired land. That is the other extreme. I believe there is a third way.

There is an option for compensating acquired farming assets that has not been given a thought or at least voiced in the market of ideas.

Why not compensate land with land? Sounds absurd? Hang on a bit.

Our Land Acquisition Act and the constitution are clear: Only improvements on farms will be compensated, and not the land itself. Our task then is to get the best out of this legislative reality.

Trying to challenge the Land Acquisition Act and the constitution to make land itself a part of the valuation constituting the compensation figure is not the smartest approach; it drowns the matter in political noise.
If we work from the assumption that the state owns land, no matter how reviling this might be in certain quarters, we can work out something creative.

If the state owns land, then it can pay the debt it owes farmers with part of the land. The idea is that the government can agree on a valuation method for the assets installed on farms that will allow at most 50% of the land acquired to be used as compensation. Government can then give title to this land as compensation, effectively restoring the market for land. At least, we will have assured productivity on 50% of farm land. With ingenuity and advanced science, farmers can sweat the reduced land and surpass pre-land-acquisition levels of productivity.

This solution requires that both government and evicted farmers accept compromises. These are strategic losses. Losing ego is strategic. For evicted farmers, that would mean accepting a process that will not contest title of the other half remaining with the government.

Evicted farmers will have to find new production techniques that will allow them to profitably use the reduced land. They can benchmark with countries such as the Netherlands and Israel that are masters at producing on small holdings. If evicted farmers no longer want to continue with farming, they can sell the land.

Government, too, has some compromises to make. In terms of valuation of assets, government should acknowledge that it assumed debt from the day it acquired farms. This means that interest should be added to the compensation debt. An agreement can be reached that total principal debt and interest arrears should be capped at 50% of the total value of each acquired farm. If debt is in excess of 50% of land value, then evicted farmers can forgive that excess. Hyperinflation practically wiped evicted farmers’ debts with banks. They can return the favour.

If the principal and interest arrears are below 50% of the farm land value, government can consider three options. First, government can convert forgiven debt into a bond which farmers can sell to other farmers to allow them to top up land allocation falling short of the 50% level. This assumes that the farmers, who cannot get 50% of land because their total compensation is not enough really, do need to top up the deficit for production purposes.
Second, government can top up land by taking into account lost productivity on individual farms over the years. This should be done on a case by case basis.

Third, government can buy the expertise and knowledge evicted farmers — they enter into mentoring relationships with emerging and resettled farmers. Government pays for this skills-transfer with land that may be needed to top up.

It has been noted that in areas such as Matabeleland 90% of the farm value is land since farming is extensive.
The argument has been that farm improvements, at 10% of total farm value, makes compensation little. The top-up principles will still apply in this case. In addition, government through progressive legislation can allow farmers to do joint ventures to increase scale of land to optimise extensive farming.

Critics can tear this suggestion apart. They are welcome. I do not claim that this is the only solution. Nit-pickers may cite legislative impediments and a myriad of other impossibilities. I dare them to proffer a win-win solution, not one-dimensional suggestions. To ask us to turn back the clock is unrealistic. To ask us to continue with the status quo is equally naïve. Save us from the intellectual intimidation and emotional blackmail that anything other than continuing with the status quo is reversing the gains of independence.

This other time I was facing a challenge with a product I was developing. I was giving up. It never crossed my mind that my wife could come to the rescue — this thing was just outside her province of interest. My wife looked at the problem. Sympathetically, she told me how she had solved a similar problem — she showed me a sample. We improved on her idea and tested the improved product. We showed it to a lady customer who is a fusspot — she has the pigs to tell it as it is. If it stinks she will let you know.Holy cow! The worrywart was more than impressed!
Solutions come from unexpected places.

Chulu is a management consultant and classic grounded theory researcher. He has published research in an international peer reviewed academic journal. — brettchulu@consultant.com.

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