Non-governmental Organisations Major Group - 2nd World Water Forum
Background Paper for the workshop 'WATER & AGRICULTURE'
The Effects of International Trade on Food Security
A Zimbabwe Case Study Report: Summary of Findings
"The WTO should be more responsive to the dilemmas facing poorer countries and include food-water security as a priority issue in any new round of trade negotiations on agriculture"
Quoted from Towards Water Security: A Framework for Action, by Global Water Partnership, to be presented in
The Hague, March 2000.
The Catholic Institute for International Relations (CIIR), commissioned research work on Trade and Food Security in October 1999 in Zimbabwe, which was largely carried out by a local consultant, Mr M Chisvo, in collaboration with CIIR Zimbabwe and its partners. The work was aimed at providing evidence about the effects of trade liberalisation in time for the World Trade Organisation's (WTO) Seattle Round in December 1999.
Still in its draft stage, Phase I of the study gives a general overview of the impact of liberalisation on food security.
Focus Group Discussions (FGD) among farming communities (smallholders) in Zimbabwe's impoverished communal lands (occupied by blacks) give a grassroots account of the impact liberalisation. The findings of the study are detailed below.
It should be emphasised that the launching of Zimbabwe's Economic Structural Adjustment Programme (ESAP) in 1990 has to date played a greater role towards trade liberalisation in the country than has the World Trade Organisation's Agreement on Agriculture (AoA) rules. There is no doubt however, that WTO rules will gradually dictate trading regimes in developing countries and hence have a huge impact on food security. Smallholder farmers will bear the brunt of liberalisation and reforms.
According to a national human development report 60% of the population live below the poverty line in Zimbabwe, 84% of whom live in the rural areas.
Zimbabwe has shifted from being a net food exporter before and after independence to a net importer
2.0 The process of ESAP and AoA reforms in Zimbabwe
Zimbabwean communal farmers have since 1990 experienced the following changes:
1) The Open General Import Licence (OGIL) which allowed the import of certain goods without a
licence was introduced in 1990. Five years later 25% of goods were on OGIL. A tariff handbook,
covering most agricultural commodities and based on the international tariffication system was
published. Domestic producers therefore became more vulnerable to outside competition.
The Grain Marketing Board (GMB) in 1995, was allowed to import maize, although permits are
still required. Maize is Zimbabwe's main cash and staple crop during times of shortage. The up of
this market had a direct impact on farmers as local maize producer prices
2) Zimbabwe privatised its marketing boards during the 1990s. These institutions, which fell under the
AoA Green Box measures (deemed non trade-distorting and need not have been privatised),
became market orientated as a result of ESAP. Producers thus became exposed to market forces.
3) Free farm input supply schemes, safety-net measures provided by the government, fell in value from
Z$50 million in 1997 to Z$18 million in 1998.
4) A 400% currency devaluation in the first five years of reform affected the nominal price of
fertiliser and other chemical inputs because most of the raw materials needed for their
manufacture are imported.
The use of inorganic fertilisers and pesticides among the poor decreased by as much as 78%
and 71% respectively, in Chivi district for example.
5) By 1995, as spending cuts continued, Zimbabwe's real per capita expenditure on Agricultural Support Services (AGRITEX), was 26% lower than the peak in 1990. Extension advice to farmers was scaled down, having direct effects on production.
6) Capital markets (Lending Institutions) went through a process of being largely accessible to
smallholder farmers for the first time after independence (1980), then reverting back to being
inaccessible during reforms.
In 1986 the Agricultural Finance Corporation (AFC), a major lender, issued a total of 77,526
outstanding loans, worth Z$38.9 million to smallholder farmers.
Defaults due to droughts (in the 1980s and 1990s) and reforms forced the government to
privatise the AFC. By 1998 smallholder borrowing was nearly nil.
There has been an emergence of alternative lending introduced by NGOs and other semi-formal
financial institutions. These have, however, depended largely on donor funds and have been
generally unsuccessful in the area of loan recovery.
Poor farmers have reported a decrease in access to credit by about 80% on average, while the cost of credit has increased by 70%.
7) National models showed that smallholder land productivity for maize was mainly determined by
rainfall (90%). However, factors such as available extension advice and closure of GMB depots
in rural areas also had an impact.
8) The issue of Trade Related Intellectual Property Rights (TRIPS) has future implications for
The WTO, concerned with maximising international trade flows, may find it difficult to endorse a universal safeguarding system against Genetically Modified Organisms (GMOs), for example. Multinationals such as Monsanto have been supplying GM cotton to smallholder farmers to carry out field trials. The World Development Movement's Clare Joy said: "I was stunned by how openly it was going on", in Zimbabwe, despite a government ban. There is a possibility that GM crops can infect other crops creating potentially harmful consequences for food security and bio-diversity.
3.0 Focus Group Discussion (FGD) Findings on Liberalisation and Food Security
Highlights of the FGDs with farmers in Chivi and Mutasa districts, net food deficit and surplus areas, respectively.
Declining crop yields as a result of limited use of very expensive hybrid seeds and fertiliser.Most farmers knew little about lending institutions offering credit.
Since privatisation of the Grain Marketing Board, farmers have seen the rise of private maize buyers. Though offering more competition/choice, 'unscrupulous' pricing policies of the buyers has created distrust.
Market information has become increasingly inaccessible, farmers increasingly depend on bus-drivers and visitors for information. The influx of South African produce into Zimbabwe creates producer price fluctuations, which farmers are often unaware of until they get to the markets.
Basic extension advice has also become thin on the ground. The retrenchment process of government extension workers during reforms means farmers rarely come in contact with them.
Increasing dependence on expensive F1 Hybrid maize seeds, sold by multinationals such as Monsanto, has severely affected the traditional system of storage and re-use maize of seeds the following season. The implications are that sustainable low-input agriculture is rapidly being replaced by unsustainable high-input production systems.
Economic hardships in Zimbabwe are forcing farmers to sell stored grain to pay school fees for their children leading to food shortages before the next harvest.
Inflation at 60% per annum has made the purchase of basic food prohibitive.
Problems have been exacerbated by the HIV/AIDS pandemic, as orphans from urban areas are often brought to the villages for support by their relatives.
Women are finding life even more difficult as they are the main providers of food in the household.
The beleaguered Land Reform Programme, and rising population growth, are imposing increasing
pressures on productivity.
4.0 Discussion and Conclusion
Although liberalisation in Zimbabwe has increased marketing outlets and created more alternative lending institutions for rural communities, the study has shown that reforms have not improved smallholders access to the factors of production.
In addition, a harsh economic environment and natural disasters (droughts and floods), environmental degradation and the HIV/AIDS pandemic, have eroded the capacity of most rural households to attain sustainable livelihoods.
Food-water security can be defined as enough food and water for an active and healthy life. The definition commonly used within the WTO context is much narrower, as it relates primarily to the adequate supply of imported food to member states (Chris Stevens et. al, Institute for Development Studies, Sussex, UK, November 1999).
It is widely accepted that economic growth through trade has positive implications, as has been proven
in South East Asia. However, it should also be recognised that globalisation must be effectively
'complimented with public policies that ensure poor people are protected from adverse shocks and they
benefit from opportunities created'. (Department for International Development-UK, Target Strategy
Paper on Economic Well-being, December 1999).
The WTO other relevant international bodies such as UNCTAD and national governments in developing countries, must therefore be active in ensuring that trade rules are not only fair but are implemented in favour of pro-poor policies. This is in the interest of the 2 billion people living in abject poverty around the world.
The Framework for Action Paper to be launched at the World Water Forum has suggested the establishment of a Task Force to develop an action programme on water-food security. This is approach is welcomed if the involvement of all stakeholders, particularly the grassroots, will be considered.
The commissioning of case studies to assess the impacts of trade liberalisation and
environmental degradation on water and food security amongst the rural poor in developing
countries, should be a priority.
The action programme should also consider including rapid reaction advocacy work directed at international bodies and launching advocacy capacity building programmes in developing countries in it's terms of reference.