Overview:

Zimbabwe’s economic growth potential largely depends on developments in its agricultural sector. The country has 4,130,000 hectares of arable land, 25 percent of which is cultivated using animal and manual draught power.  Following the government’s fast-track land reform program which began in 2000, irrigation infrastructure deteriorated, and most of the new landowners depend on rain rather than irrigation for their crops.  The government grants 99-year leases for agricultural land, but the protections of such leases are too weak to serve as collateral for financing, hindering agricultural investment.  The government has also instituted several inefficient “command” agricultural subsidy programs which have hampered growth and corruptly squandered billions of dollars.  During the 2020/2021 agricultural season, however, the government allowed the private sector to fund agricultural activities, which improved transparency in the sector.  The government has taken steps to promote cultivation of sorghum and millet, which are more ecologically compatible with Zimbabwe’s semi–arid areas.  The government is also in discussions with local financial institutions to accept the 99-year leases as collateral security.

Leading Sub-Sectors

Agricultural Machinery

Zimbabwe has a great need for new and updated equipment to improve agricultural production.  The government estimates Zimbabwe has over 50,000 medium- to large-scale farmers, and the country has approximately 10,300 functional tractors of the 40,000 needed for commercial cultivation.  In 2020, the government signed agreements with international partners, including U.S. firm John Deere, to import tractors and other agricultural machinery.  Local farmers have commented they prefer American quality and value over the Chinese and Belarussian models competing in the market. 

Tobacco:

Tobacco is the most important cash crop in Zimbabwe in terms of generating foreign exchange.  The sector produced in 2022 just over 260,000 tons of tobacco at an average price of $4.20/ton.  The tobacco industry is one of the nation’s biggest employers and is dominated by small-scale farming versus.  Zimbabwe exports its tobacco to Asian countries, with China accounting for the bulk of the exports.  The country expects to increase tobacco output to 300,000 tons by 2025.   

Soybeans:

Local demand for soybeans is on the rise owing to its use in cooking oil, stock feeds, other foods, and industrial needs.  Zimbabwe requires about 240,000 metric tons of soybeans annually, but local production stands at an estimated 71,290 tons, enough to meet only 30 percent of national demand.  Despite the government’s command soybean program, introduced in the 2017/2018 season, Zimbabwe still depends on soybean imports from Zambia and Malawi.  At the farm level, soybeans are a short season crop with a lucrative return on investment of up to 200 percent.  Russia’s war of aggression in Ukraine has added pressure on farmers to grow more soybeans as soybean oil-producing countries restrict their exports. 

Cotton:

According to a 2017 report by the UN Conference on Trade and Development, Zimbabwe has the capacity to produce 600,000 tons of cotton, and the country’s 22 ginners have an installed ginning capacity of 750,000 tons per annum.  Cotton, Zimbabwe’s second most important cash crop, is usually grown under contract farming arrangements where contractors supply production inputs (seed, fertilizer, and chemicals) to farmers on loan.  At harvest, the contractor buys back the contracted seed cotton, deducts costs of the inputs, and pays the contract farmer the remaining balance. 

Despite cotton’s potential, Zimbabwe only produced 116,052 metric tons in the 2020/2021 season, according to the Cottom Producers and Marketers Association. Output declined in the 2021/22 marketing season due to the late onset of the rains which resulted in a delay in planting, according to an official from the Cotton Company of Zimbabwe.

Certain departments within government such as the National Biotechnology Authority of Zimbabwe (NBA) now believe the sector can benefit from the adoption of improved seed varieties including GMOs and production of quality fabric to increase demand for raw cotton.  Currently, however, there is no political will to fully embrace the use of GMOs in cotton production.

Corn:

Corn is Zimbabwe’s principal food crop.  According to a June 2022 Foreign Agricultural Service (FAS) Grain and Feed Annual report, Zimbabwe’s corn crop for marketing year 2022/2023 is estimated to be at 1.6 million metric tons, 43 percent less than the 2.7 million metric tons produced in marketing year 2021/2022.  As a result, the Government of Zimbabwe lifted a ban on corn imports introduced in May 2021 and announced a plan to import 400,000 metric tons. Macro-economic challenges, sub-optimal weather, and high input costs contributed to the production drop.

Wheat:

Russia’s war of aggression in Ukraine, which led to global grain shortages and food price hikes, motivated Zimbabwean commercial farmers, with government support, to produce 375,000 tons in 2022, their biggest wheat output since the 1960s.  The country harvested enough wheat for local requirements, leaving a small surplus (20,000 tons) for its strategic reserve due to a public-private partnership model that combined government’s input support to vulnerable small-scale farmers and private sector participation through provision of loans to commercial and contract farmers.  

Opportunities

There are opportunities for U.S. companies to sell high quality tractors to local farmers under the country’s agricultural mechanization drive as well as irrigation equipment given frequent droughts.  There are opportunities to sell food processing machinery in line with the government’s goal of increased value addition. There are also opportunities in the agro-chemicals subsector.  In particular, the ZIDA emphasizes the need to increase capacity in manufacturing of fertilizer, insecticides, and pesticides.

Resources

Commercial Farmers Union of Zimbabwe

Harare Show Grounds, 7, Belvedere, Harare

Tel: +263 4770029/57/59/71

Zimbabwe Farmers Union

5 Van Praagh Avenue Milton Park, Harare

Tel: +263 771564554 

Tobacco Industry and Marketing Board

429 Glen Eagles Road, Southerton, Harare

Tel: +263 772145166/9