COMMENT: Agro-processing will unlock value, raise incomes

The call by President Mnangagwa for the Zimbabwe Defence Forces Day to upgrade their successful farming operations to include agro-processing is part of a push by the President for farmers and miners to go beyond producing raw materials and move to products.

The farms run by the ZDF have helped to ensure that barracks and other military establishments have readily-available fresh food and have helped set an example to their neighbours to farm their land better.

Obviously the first task of the forces is to defend Zimbabwe and when on deployment their logistical back-up will include what deployed troops and air personnel need to eat, but when in barracks the farms are an extra.

Already universities and colleges, as well as local research organisations, have been developing down-range industries, adding to the agro-industrial base in the private sector and being expanded by private investment.

But there is still that gap, sometimes a large gap, between farmers and those who buy and then process their crops, the extra value going to the processors and creators of downstream industries rather than the farmers.

That gap needs to be narrowed or eliminated, at least for some high-value products and luxury goods that can be exported.

This is where on-farm processing, or co-operative processing, or special arrangements with very localised processing plants that can be owned or partially-owned by farmers become an essential part of raising farm incomes.

There will always be some bulk crops, such as maize for maize meal or wheat for flour or some of the oil seed crops, where the existing system of farmers who grow the crops sell the grain to factory owners or even sell through an organisation such as the Grain Marketing Board.

These are the raw materials that make up so many of the goods produced by the agro-industrial firms for mass markets.

But outside that basic production cycle a lot more can be done, and to some extent is done.

One example is that for many years our main beer brewer has developed very close relations with groups of farmers.

Brewers and farmers work together to produce the precise varieties of barley and sorghum the brewer wants and needs.

Similar arrangements are in place in certain horticultural areas. There are specialist makers of higher-value marmalades and jams who need their neighbouring farmers to grow the exact types of fruit needed and harvest at a precise point.

Again the relationship has to be very close, but the profits are higher.

The highest levels of such close relations between growing and processing crops comes from parts of the European Union.

Grape farmers often manage to push their own in-house brands of wine, or at the very least co-operate with a larger winery. The prices of these wines and brandies are higher, sometimes far higher, than the run-of-the-mill concerns.

The EU rules of origin for certain regional specialities, such as specific cheeses or salamis, set very strict guidelines, including the precise breed of cow or goat or sheep and the precise processing to make a luxury cheese, or the precise breeds of pig or beef cattle turned into the more expensive salamis. They also give the boundary of the area devoted to each speciality.

These products are exported around the world, including to the wealthy countries that have developed the mass farming that produces huge surpluses and process these for mass markets but without the additional value-added.

In these specialist value-added concerns there is no real gap between farmer and processor. Sometimes the farmers are the processor either on the farm or in a tight local relationship that ensures the extra value is shared between those who produce the actual grain or fruit or milk or meat and those who turn this into the high-value product or export product.

This is the way Zimbabwe needs to develop, especially to ensure our concentration on smaller farms still allows the farmers to have higher incomes.

Here the Defence Forces can set an example, which is no doubt why the President was keen to bring up the opportunity, since they have in-house discipline and expertise.

Producers and exporters of raw materials might well make some income, but nationally we need to be continually adding more value to our materials, which might mean processing for mass markets in factories but which can include in several areas a bit more.

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