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Drought: a misery for some, big business for others

Zimbabweans still smarting from the effects of the 1992 drought which saw families surviving on yellow maize, mainly grown as stockfeed, have every reason to be worried about an impending drought, but sources close to The Insider say there is no need to panic this time.

While acknowledging the adverse effects that the El Nino could have, sources say Zimbabwe is likely to receive normal to below normal rains throughout. There have been different interpretations of the weather patterns with some saying the country will have below normal rains in October and November with near normal rains from December to March and others saying the rains will be below normal by as much as 57 percent.

Documents shown to The Insider, however, indicate that the pattern is likely to be the same throughout the season from October right through to March. The charts paint a not so gloomy picture of normal to below normal rains throughout.

But what is more important, according to an expert, is that people have to understand that drought means different things to different people — water shortage versus grain shortage. “There can be plenty of rains in one month which could fill all the country’s dams but if the rains are not spread over a period then there will be plenty of water to drink but there might be a grain shortage,” the expert said.

For Zimbabwe, and most of the region, this would not be as bad as it was in 1992, the expert said. In 1992, the entire region was hit by a drought. This was a new experience because in the past the drought had affected some countries while others were spared. As such those without food could easily import from those that had not been affected.

“This time, we are better prepared both in terms of carryover stocks and water reservoirs. Our water reservoirs are 87 percent full. Underground water levels are much higher. The alert on the possibility of drier than normal conditions was sent out much earlier. There is cash to buy food should there be a shortage,” the expert said.

According to the latest available statistics from the Southern African Development Community Food Security unit, Zimbabwe had opening stocks of 597 000 tonnes of maize in the 1997-98 marketing year which began in April. With the domestic harvest expected to be 2 192 000 tonnes this was expected to push up domestic availability to 2 789 000 tonnes against a domestic requirement of 1 883 000 tonnes. Maintaining the desired strategic grain reserve of 500 000 tonnes this should leave a surplus of 406 000 tonnes of maize.

The region as a whole, however, is expected to have a deficit of 227 000 tonnes with the biggest deficits being in Tanzania (593 000 tonnes), Malawi (506 000 tonnes), Angola (410 000 tonnes), Zambia (223 000 tonnes),Lesotho (200 000 tonnes), Botswana (144 000 tonnes), Namibia (37 000 tonnes) and Swaziland (4 000 tonnes). Mozambique is expected to break even while South Africa is expected to have a surplus of 1 483 000 tonnes.

Zimbabwe is also expected to have a cereal surplus of 201 000 tonnes and South Africa 1.72 million tonnes, due to high carryover stocks. One source also said besides the physical food stocks Zimbabwe had cash reserves to purchase grain should there be a need to do so. Zimbabwe introduced a drought levy soon after the 1992 drought but there have been conflicting reports on what has happened or is going to happen to the money raised.

In August Finance secretary Charles Kuwaza said $1.2 billion had been collected under the drought levy and was being kept as cash and as a strategic maize reserve. A further $500 million had been collected under the development levy and was incorporated into the $4.7 billion public sector investment programme.

One press report, however, said the $1.5 billion that had been raised as the drought levy, later converted to a development levy, will be used for rural development.

The source said there was no way the money raised under the drought levy scheme could be used for something else as this money was kept under a separate fund. Its use had therefore to be sanctioned by the Ministry of Agriculture, and there was no way the Ministry of Agriculture could allow the money to be used for rural development. The money raised under the development levy, the source said, could be used for anything as long as it was development. People should not confuse the two, the source said.

Kuwaza said the cash raised through the drought levy was reflected in the Auditor-general’s report but although The Insider understands that the report for the year ending June 1995 is now complete but it has not yet been released to the public as it had not been tabled in Parliament at the time of writing.

But while drought is generally bad news for Zimbabwe, whose economy is agriculturally based, it means big business to some. Drought, for example, brings unprecedented profits to large milling companies which have been hard hit by hammer millers.

The price of listed National Foods, for example, has been going up since the announcement of an impending drought following a mediocre performance. During the week ending September 5, National Foods topped the list of the market winners when its price shot up 150 cents from 800 cents to 950 cents, a 19 percent increase. The closest winner only recorded a 4 percent gain in a week in which the industrial index slumped 262 points.

The other two large milling companies, Blue Ribbon and Midlands Milling, are not listed on the Zimbabwe Stock Exchange although their parent companies TA Holdings and Consolidated Farming Industries (CFI) are.

Transport companies, some of which are believed to be owned by senior government ministers, also do good business during droughts. There is jostling for tenders to transport grain both internally and from the ports. Kickbacks are the order of the day in the battle to win tenders. Political patronage also creeps in.

One of the country’s biggest scandals, that of Samson Paweni who swindled the government of nearly $5 million (now $60 million) some 15 years ago was after a drought. Paweni inflated claims to the Ministry of Labour and Social Welfare and swindled the government of nearly $5 million.

During the 1992 drought reports said 25 percent of the grain that had been purchased disappeared. Major contributors of the food aid were, however, emphatic that all the food they had ordered had been fully accounted for.

The Insider now understands why they would deny this. For donors, food aid is a business. According to Graham Hancock in his book: Lords of Poverty, the United States Agency for International Development (one of the major food donors which denied any pilfering in 1992) operates on the streetwise principle that those who accept free handouts today will become paying customers tomorrow.

Hancock even goes further: “AID’s ethics are very little different from those of a drug pusher when it boasts as it frequently does about past recipients of food aid who are now among the top purchasers of US agricultural exports.”

But it is not only donors who make money. Those who purchase also make a killing. During the 1992 drought, for example, surplus grain some of which was not even fit for animal consumption was bought clearly indicating that there could have been hefty kickbacks –  the 10 percent syndrome to those involved.

The only people who lose out are the poor, the very people everyone is claiming to help while the entire chain from government, middlemen, to donors, thrive. It will therefore not be surprising to find the country importing food as a contingency only to find that no one needs it.

 

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