Last week, the ‘hidden middle’ around maize production and sale was introduced. From across our sites in Chikombedzi, Triangle, Matobo, Wondedzo, Chatsworth and Mvurwi, in this blog we offer a few case studies of the diversity of players in these business networks.
The scale of operations vary from someone buying and selling a few buckets to those dealing in tonnes of maize. What is common across these cases is that these are all people embedded in the farming community. The businesses rely in particular on production from the new land reform areas, both A1 and A2, where many also farm.
Connections between producers, those who can process (such as owners of grinding mills), transporters and retailers are essential. Some combine these operations, but many are linked through personal, sometimes kin-based, networks. Social relations of trust are crucial, as many of the cases highlight, as this allows people to link, connect and trade. With many of the businesses based on barter exchange (in part because of the currency situation, with the local currency fast losing value and dollars or rands being scarce), negotiation of the exchange value is continuous.
Markets are highly varied, and in different sites there are different opportunities. For example, in Chikombedzi and Chatsworth there are large church gatherings and these provide important opportunities for selling maize, often processes (roasted mealies, sadza etc.). In Wondedzo it was the gold rush of 2020 that attracted thousands to the area and offered a ready market for maize grain, meal or cooked foods.
Across our cases, we see a large number of business operations. These are very rarely subsidised or supported by government or ‘aid’ projects, nearly all are independent and often starting out with a very low capital base. Building up from a farm operation on the resettlement farms has been crucial for many as they have this as a starting point, and with maize being produced on-farm to fuel the business. When asked to rank the source of finance for their businesses, people put ‘own resources’ consistently first and nearly every time this was farming. Other sources such as bank loans, government support, NGOs and churches came way down the rankings. While people recognised the importance of the pfumvudza programme from government as helping boost maize production, it was this production that was the source of finance. In Zimbabwe’s constrained economy, you have to go it alone to generate business, as formal systems for finance and state support (beyond limited channels of patronage to a few) is inadequate.
Added together, all these activities surrounding the maize value web (our preferred term compared to ‘chain’ given it spreads so far and is far from linear) generate significant economic activity, providing employment for many. Those being employed or running businesses may include the next generation of land reform area residents, often without significant land (maybe a subdivided portion only), and so providing the basis for intergenerational support linked to agriculture.
Even the smallest operation seems to be employing people, mixing both permanent and casual labour. Add this up across many, many operations, this is a large, but again hidden, workforce contributing to the local economies across the country. It may not fit the standard narrative of ‘formal’ development – nor even the arguments for ‘small and medium enterprises’ – but it has to be recognised if we are to understand the agricultural sector in Zimbabwe.
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The following sections offer some glimpses of how this hidden middle operates, focusing in turn on vendors, transporters, processors, equipment repair and hire outfits, retailers and financiers, many providing several roles in complex, but socially connected, networks that make up the maize value web.
Vendors
Mr C is a maize vendor from Chikombedzi. As he explained, “I am a retired teacher and I own a grinding mill, bought originally through my salary. I didn’t expect to become a vendor, but it is what arrived…. I used to source maize locally but there is not enough supply here. Now I operate between Chikobedzi and Chinoyi (in the far north of the country). I have a number of buying points, and pay for transport from there to the highway. From there to Rutenga I use cross-border trucks and so pay less per tonne. Getting it to Chikombedzi is the big problem, as transport is expensive. Here I have seven selling points around the township, and there is demand especially from those coming to the prophets. I buy maize at USD3 in Chinoyi and bucket and sell it here at 150 Rand a bucket. I make a profit but not much. I only take forex, absolutely no RTGS! I employ two workers, one temporary and one permanent for the grinding mill”.
Mai S is an experienced maize vendor from Chikombedzi. She explains, “Over time, I have made good profits. With my husband, we have now built houses in the township with space for barbers, a hairdresser, and tuckshops. Maize vending was very smooth when Muraba and Malikango irrigations were working, but now I have to rely on dryland farmers. This is a drought prone place, so supply is not always good. I now have to cast the net wider. I now source from Gutu. It costs USD5 per bucket then we transport by scotch cart to the nearest highway at USD10 per cart load, then to town on a bus at USD1 per bag containing three buckets. I have an agent in Gutu who does this with money I send by instant cash transfer on the phone. I manage the selling points from my home, and from the tuckshops in our building, as well as at surrounding grinding mills. Also to relatives/neighbours. I have WhatsApp platform for advertising. I have happy customers, as the grain is much cheaper than the shops and I get a profit too!”
PM from Chatsworth started vending in 2017 when her husband passed away. She took up cross-border trading and vending locally as she had to look after her children. She got some capital via the Women’s Affairs coordinator. With $200, she went to Mozambique and bought T-shirts. A bale gives a tonne of maize in exchange with people in the local area. She then sells on to the GMB or to drought-prone areas like Chivi or Buhera, where she can get 10 US per bucket. There’s limited competition – we know our customers and the farmers trust us. She works with a transporter and they share profits. She comments, “I am happy because my kids are all doing well; one at teachers college at Bondolfi now.”
Mai E comes from Triangle and she works with her sister who lives in Chinoyi. She buys from local farmers there. As she explains, “We transport on trucks who collect sugar from Triangle. I give the truck drivers some money, and then I sell locally here in Triangle. I employ people to load and offload and pack the grain for sale. It’s a good business. I am a single mother, but I have built a house in Chiredzi and I have sent my three kids to school with the profits”.
Transporters
Mr TR is a transporter, from Chikombedzi. He recalls, “I started transporting across the border in 2018. It’s lucrative business at the border point as there are many people, and it’s possible to sell maize as well as transport people. I employ touts to raise business, but there are passengers all the time. Now is the time for mopani worm harvesting. This really promotes my business. I buy up the caterpillars, and exchange them for maize, goats, groceries, fuel or fertiliser. Barter trade is big business, and always needs a transporter. The maize I get, I then sell on, either here or across the border. I can always get by, my truck never gets impounded; you learn how to manage the system.
MC comes from Mvurwi and owns a lorry. He also farms, but his transport business is crucial. He explains, “I buy up maize grain here and transport it to Dande. I exchange for goats, sheep, chickens and vegetables. I also get cheap inputs from Dande where farmers get fertilisers and seeds from various schemes. I sell these to other farmers here in Mvurwi, and sell on to local agrodealers who move around the area. For this business, I employ three permanent workers and five casuals.”
MZ is from Chatsworth and started out with a grinding mill in 2000, but has been transporting since 2015. He bought a 30-tonne truck from mill’s profits. He observes, “From 2019 business really took off, as demand for transport was very high here. At the beginning of the season, grain from the wetlands can be transported to the GMB. Later, the GMB opens a sub-depot at Chatsworth, and so I have stiff competition. I offer different deals for payment, and this attracts customers. My best clients give maize grain at the end of the harvesting season, then from August to October I transport the grain to drought areas such as eastern Gutu to sell. Sometimes I exchange for pearl millet, which I sell to the GMB or to those who raise chickens. I also crush maize and sell to those rearing pigs. In 2022, I bought a second lorry and also a diesel grinding mill. My first born is using the second truck. During the off season the lorries are hired for piece jobs, transporting bricks, gravel, water and so on, even transporting livestock to Masvingo. I have two permanent workers, plus my son W who is the transport manager. I can also employ four casuals for loading at peak times.”
Processors
MM from Mvrurwi has a grinding mill. He produces maize on his farm and grinds this for sale as meal or for stock feed. “In this area”, he explains “there’s always maize and ! buys this up for grinding and selling on the processed grain. Many people own chickens, pigs and so on and need grain for feed”. He also gets maize from other customers, who can pay 5kg of grain for every 20kg that is ground. He now employs five people and the business is booming and he has built two houses in town with thep proceeds.
DM buys up maize locally and makes ‘maputi’ (popcorn), which is then sold in a number of places. He has a selling spot in the town and pays the municipal authority for the stand. He has invested in a ‘maputi gun’ (a contraption for making the popcorn), and he now employs five people for the maize processing and sale. At only 26, he has become a successful entrepreneur, even if he doesn’t have land.
Equipment hire and repair
NM is a successful A1 farmer in Mvurwi. In order to improve his production he hires various types of equipment from suppliers in town. Although he has a tractor and plenty of cattle for draft power, he hires a planter for planting maize and also knapsack sprayer. He also hires a truck for transporting crops from field to home. Since he must process a lot of grain, he also hires a maize sheller – he pays with 50kg bag of grain per tonne, plus buys the fuel. His operation has intensified considerably, and he usually gets about 30 tonnes of grain from 6 hectares. Equipment hire is so much easier these days, he explains. This has allowed him to expand his farm business. From the profits he has invested in two houses in Mvurwi, which are now rental properties.
EN is from Wondedzo, where he lives with his parents who have allocated him a plot on their 30ha self-contained A1 farm. His main business is tractor hiring. His father who got the land during the fast-track period in 2001 bought a tractor in 2020 from the proceeds from selling crops. EN explains, “I hire the tractor to farmers around here. The tractor is equipped with a harrow, disc plough ripper and a maize sheller. I am hired to plough, plant maize, shell maize and transport maize to homes and markets. I also do lots of transporting of building materials, such as timber, bricks, river sand and so on. For tillage work I charged US$100/ha while for trailer work it’s US$40 per load. This business allows me to pay schools fees, buy groceries and purchase inputs for farming”.
Across our sites, there is a big demand for transport – from wheelbarrows to scotch carts to small pickups. This is the way grain is transported from farms to homes to grinding mills to sales points. With such a volume of grain being moved, but usually in small amounts on many occasions, the old system of dropping at a decentralised collection depot is no longer functioning. As a result many have invested in new ways of moving grain in recent years, with markets in hiring evolving due to the demand. Such forms of transport also need to be repaired and small businesses for welding and repair have sprung up.
For example, in Chikombedzi, JM has a repair shop in the township. He has a basic welding equipment and can make scotch carts from scratch. Most of his work is repair though and he and his worker will quickly mend (and sometimes customise) existing equipment, meaning that maize can continue to move. In Wondedzo, DM who is 29 years old with a family of three, now runs a welding shop in the township together with his father and young brother. As he explains “People used to travel to Masvingo urban to buy things, but now they come here and it’s cheaper. I make wheelbarrows, scotch carts and repair all types of equipment. My father came here in 2001 during jambanja time and has a large plot. He allocated me 3ha. He was a welder before and he taught me all the skills. I finished O Level in 2009 and have been employed doing this since. It is a good business. I hire assistants to help me and I hope to have my own shop soon.”
Retailers
MM works on the Triangle sugar estate and stays at a company house. Because the salaries are not good, he has managed to establish a retail business in parallel. This has allowed significant investment at his rural home, including building a cattle herd and paying for school fees. He has a stand at the Zaka turn-off market, where he sells green mealies produced by workers on their small plots on the estate. He also sells maize grain later in the season both from his stand, but also directly to estate schools and the hospital.
Mrs S owns a medium-scale A2 farm, where she grows maize. She specialises in livestock feed sales. She transports grain in a truck from the farm and sells in Chiredzi. These are mostly direct sales to those with chickens, pigs, cattle and so on. She employs three people to manage sales and transport. She has now invested in a grinding mill from the profits and has added selling meal to her business. All this has allowed her to invest in the farm, including improving the house. She also has two houses that she has purchased in Chiredzi. On the farm, she has pigs and cattle and the maize-based livestock feed is an important supplement, boosting productivity and profits.
PM owns a shop in Chatsworth, where he buys and sells agricultural goods, along with groceries. He has a number of independent stockists supplying everything from seeds to farm chemicals and veterinary medicines. He is happy to exchange products with maize. He explains the system, “I take the maize and mix it with other feeds for my pigs. I am now establishing a pork butchery in one of the warehouses. We just negotiate a price with the farmer. Unlike the GMB, I take no RTGS. There is immediate payment and -no complex grain inspections.” Since buying the shop in 2016, his business is expanding. He explains, “I have four permanent workers: two at the shop and two at the farm for the pigs. I also sometimes employ seasonal workers for slaughtering and packing.”. Even the pork, which sells at US$5/kg for a pack is exchanged for maize – one bucket and a half for one kg of pork. As he observes, “I am planning big, and I’m looking at other premises to expand”.
Financiers
Finance for farming is highly constrained, as bank loans and other formal sources of finance are difficult to access, with only those with larger operations and collateral being able to gain bank finance. For example, Mr CP from Mvurwi managed (one of very few) as he is a large-scale operator on an A2 farm with properties and equipment as collateral. He secured an AFC loan and was financed for 50 ha of maize to the tune of USD$1100 per hectare. He delivered the maize to the GMB and paid back the loan with interest.
Within our study areas a few A2 farmers have been able to get ‘command agriculture’ contract finance, but many complain about the system arguing that payments and deliveries of inputs are slow and that it requires good political contacts to get the full package. Some have therefore withdrawn preferring their own financing derived from crop farming or other businesses (increasingly rentals from real estate purchases, originally bought from the proceeds of good harvests, see above).
Maize contracting by private businesses operate in the high-potential Mvurwi area. They offer finance, inputs and guaranteed sales. They include business people with transport based in Harare, and they sell the maize at a profit either to GMB or to Harare markets and traders or seed companies wanting farmers to grow hybrid seed. Mr TM, an A2 farmer with a large, well-capitalised farmers (with mobile centre pivots etc.), for example, has 40 ha contracted by Seedco, all under seed maize growing the variety SC719.
For those operating at smaller scales, they must seek finance from local lenders. They offer loans at very high interest with short repayment times. Many dismiss these people as ‘loan sharks’ (chimbadzo), but they offer a useful service providing money (in forex) immediately for urgent needs (say buying fertiliser at a crucial period for the maize). Such informal money lenders may operate independently or be linked to vending operations or be part of retail shops, such as agrodealers (see above).
In recent times in Mvurwi, finance has become available from syndicates of civil servants who pool cash (US$100-$125 each) from their meagre salaries and offer it on a loan basis with interest (US$10 per $100 loaned per month). They undercut other operators by offering better interest terms, but they also require fast repayment. Two groups are operating in Mvurwi – one of seven civil servants, the other of eight agricultural extension workers – they both have good connections and trust relations in their areas, as they are also farmers and the extension workers in particular have a wide client base given their extension work and contacts.
This is the third in our blog series on the ‘hidden middle’ (see also the first and second). The next blogs will focus on poultry and horticulture. Thanks to Felix Murimbarimba and the team in Mvurwi, Matobo, Chikombedzi, Masvingo and Gutu for contributions to this blog, along with all the photos.
This blog was written by Ian Scoones and first appeared on Zimbabweland