21 October 2016
CCS COMMENTARY:
China’s investment in Zimbabwe’s agrarian reform
Since announcing Zimbabwe’s Look East policy in 2003, Chinese investors have established a strong
presence in Zimbabwe’s tobacco sector. With the aim of creating partnerships to rehabilitate
agriculture, Zimbabwe exported over 54 per cent of its tobacco to China in 2015. Recently, President
Robert Mugabe’s announcement to lease tobacco producing farms to Chinese nationals has reignited
controversy over Zimbabwe’s land reform policies, even inciting a social media campaign #Chinesefarmersmustfall. The acquisition of previously white-owned farms by Chinese immigrants
marks a notable shift in government-to-government financing towards business partnerships with
Zimbabwean farmers. This commentary explores how Chinese foreign investment has engaged in
Zimbabwe’s agricultural sector and further examines some of the implications for the sector.
The ‘Going Global Strategy’ in tobacco contract farming
Photo: www.bloomberg.com
In 2000, the government of Zimbabwe evicted over 4,000 white
commercial farmers and seized their land. President Robert Mugabe
justifies the Fast Track Land Redistribution Program (FTLRP) as the
means needed to address land ownership imbalances that resulted from
the country’s colonial legacy. The FTLRP has redistributed land to
approximately 60,000 small-scale black farmers. Considering limitations
of finance, skills and infrastructure, the majority of local farmers are only
able to produce low-grade tobacco crops, making FTLRP farmers less
competitive than their predecessors. As a result, Zimbabwe experienced
a decrease in tobacco production of 79 per cent from 2000 to 2008.
While western donors continued to withdraw their support and capital from Zimbabwe in the early 2000’s,
the government’s need for new sources of investment on newly resettled farms provided an opportunity for
China to accelerate its global strategy for outward investment in Zimbabwe. In 2001, China adopted the 10 th
Five-Year Plan for National Economic and Social Development; a strategy aimed at strengthening international
co-operation and economic development through investments and development projects abroad. Through
various Bi-lateral Investment Treaties (BITs) the Chinese government was able to encourage established state
-owned companies and private enterprises to engage in overseas farming. In Zimbabwe, companies such as
Tian Ze Tobacco have become dominant players in providing business opportunities for resettled farmers. As
the top buyer of Zimbabwe’s tobacco, Tian Ze, a Chinese state-owned company has significantly expanded
small-holder tobacco contracting farming.
In light of the progress being made through contract farming; partnerships with foreign investors from China
will play a crucial role in increasing exports and enable the industry to once again tap into global markets with
high-grade agricultural products. As part of the new arrangement with Chinese investors, the landowners will
receive a portion of their income from the crops as rent for using the farmland. It is estimated that Chinese
investors have spent close to US$ 10 million in machinery, equipment and new infrastructure in five farms in
Zimbabwe. With production already underway, the farms aim to produce 1,500 acres of tobacco for the ending
season in 2016. Still, much like Zimbabwean small-scale farmers, the Chinese farmers know very little about
tobacco production and will require assistance from international experts to guide their activities. Only after
the introduction of international expertise to local farmers, will knowledge transfer increase competitiveness
and reintroduce international standards in the sector.
Modelling China’s contract responsibility system
Historically, China emerged as an agrarian society with the majority of its population living in rural areas,
thus making the agricultural sector pivotal in facilitating economic growth. Most significantly was the
introduction of the ‘contract responsibility system’ through the 1980’s. Under the responsibility system, land
is owned by the public to allow management and production to be undertaken by individual households
through long-term contracts. China’s market-orientated reform served the dual purpose of reducing poverty
and hunger, while simultaneously driving economic development. It was hailed by Chinese leader Deng
Xiaoping as ‘a great invention of Chinese farmers,’ because it raised rural productivity by incorporating
market activity in the rural economy.
Similar to China, Zimbabwe’s need for agrarian restructuring is aimed at elevating the role of agriculture in
economic development, while also meeting the employment and food security needs of its largely rural
population. With the introduction of the Zimbabwe Agenda for Sustainable Socio-Economic Transformation
in 2013, the government’s attempt to stabilise the economy relies heavily on contract farming as the major
source of finance for agriculture. In essence the contracting system between China and Zimbabwe is intended
to move the agricultural sector from subsistence farming to commercial production. Currently, Zimbabwean
farmers have successfully recovered production of 80 per cent of the newly resettled farms, which has
improved livelihoods, in some cases with farmers profiting from thousands of dollars each season.
However, the land that was previously owned by white farmers, then taken over by political elites, and is
now being rented out to Chinese investors, exposes some of the contentions of the FTLRP. Firstly, since
announcing the re‐establishment of some of Zimbabwe’s major tobacco exporting with Chinese farmers,
various reports have resurfaced the issues of compensation for the victims of the land seizures and whether
or not the income from the Chinese farmers will serve as reparations and if this will affect rent prices for
Chinese investors. Secondly, the issue of ownership imbalances for resettled farmers has resulted in many
locals still being unable to accesses fertile land and sufficient credit lines. This is because many of the key
stakeholders involved comprise of the relatively wealthy farmers, established businesses or other Chinese
companies. This limits the scope of partnerships with locals and reinforces embedded political networks,
which leaves very little wealth and opportunities to trickle down to the poor.
Conclusion
The pattern of public and private partnerships with local farmers and Chinese investors in tobacco
production will continue to contribute positively towards agricultural gross output. However, the market
imperative poses several challenges in addressing rural development. The widening poverty gap in both
China and Zimbabwe reveals the limitations of commercial production in agrarian reform. China’s success in
its agricultural experience of developing from the bottom up, has gradually become stagnant in terms of
redistributing wealth. Zimbabwe on the other hand, is perpetuating a top-down approach which is failing to
meet the needs of the poor. The challenge that arises is that cash crops will come to replace staple food crops,
which will exacerbate Zimbabwe’s current food security crisis. If the government continues to create more
incentives in the private sector for long-term strategies to prioritise commercial production, the promise to
restore livelihoods through enhanced subsistence farming for resettled farmers will remain another failure of
the FTLRP.
Tichafa Chidzonga
Research Assistant
Centre for Chinese Studies
Stellenbosch University
“Commentaries are written by Research Analysts at the Centre and focus on current and topical discussions or media events with
regard to China or China/Africa relations. Occasionally, the CCS accepts commentaries from non-CCS affiliated writers with expertise in specific fields. Their views do not necessarily reflect those of the CCS. Commentaries can be used freely by the media or
other members of the interested public if duly referenced to the author(s) and the CCS.”
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