Recent changes in markets and market relationships and lessons for the design of effective support programmes

Abstract

As a result of poor planning and inappropriate procedures for beneficiary selection, the land reform programme in Zimbabwe resulted in a drastic decline in production and productivity of the agricultural sector. At the same time, the perceived political agenda of the process sparked off a reaction in the investment climate that manifested in worsening balance of payments, reduction in industrial production, and growing unemployment. It is safe to conclude that the Zimbabwean land reform programme resulted in an economy-wide decline in effective demand occurring simultaneously with a sharp fall in physical agricultural output as appropriated farms lay idle and poor farm practices depressed productivity levels. A low-equilibrium trap thus ensued, culminating in the deterioration of livelihoods across the broad spectrum of society as a hyper-inflationary situation developed and assumed scandalous proportions. A situation such as this set off chain reactions that touched all segments of the economy and produced diverse effects, including the disappearance of markets, the emergence of informal exchange arrangements that represent adjustments to the aberrant phenomenon of hyper-inflation emerging in the absence of both cash and goods/services. To date, there has been no systematic assessment of this dimension of the land reform programme with the aim of drawing lessons that can provide some basis for developing strategies for revamping the economy now that clear signs are emerging that the long-running political crisis might soon end. To understand what might have happened, an initial broad appraisal of specific indicators of agricultural output and prices for the livestock and maize products has been conducted in one district and formed the basis for assessing any spatial and temporal patterns in markets and marketing relationships.