A couple of weeks ago, following our visit to our friends the Pichards in the Alentejo and visiting a beautiful property owned by an elderly gentleman of British descent, Thomas Pichard wrote to me saying he had been offered the opportunity of leasing some of that farm. It is presently used for grazing cattle and is no longer cropped, but even this is becoming too much for the elderly owner to handle. Thomas presently helps him plant and harvest his fodder crops. Due to circumstances or choices, his children are in different careers other than farming. They do not want to return to the farm at present and may be happy for it to be used, enabling them to retain the very valuable land. I should mention agricultural land prices in Portugal are way above their production value but still some of the lowest in Europe. That is, you are never going to get a realistic return on your asset value through agricultural production. It would appear to me that land speculators, often in the form of large corporations or the wealthy, can see their money grow in land outside its production capabilities. Not so for someone borrowing money to grow a crop to pay for the land. Sad for the long-term sustainability of rural communities. Thomas is looking at a JV in sheep production on some of the property and I have looked at the initial business model, although I know little about sheep other than that they are inclined to die for little or no reason. Cattle are not an option on this particular farm, as TB has been found and therefore, there is too much risk getting involved in cattle until the farm is TB clear.
While on that subject, it seems the UK hides behind the EU regulations in regards to its non-vaccinating rules pertaining to TB. The powers that be claim they will eradicate it through the slaughter of infected animals. For me, it seems an impractical if not impossible task if all the carriers are not eliminated, be it badgers or deer. There is no way the Green lobby would allow this supported by the city know-alls about the countryside. I find it rather disingenuous when cattle on a farm are being sent to slaughter while a herd of deer that can be seen grazing, untested, in the pastures they have just come from or there are known badger holts on the farm. The vaccine may give a positive test and would therefore preclude any exports to non-vaccinated countries within the EU importing some hundred thousand tonnes of UK beef each year. Watching the TB saga unfold in the UK makes me doubt that the present policies will resolve the problem in the long term. Until I went to the Alentejo I was unaware the same problem existed in Europe.
“The question to be raised is whether TB and Foot and Mouth vaccination restrictions are more a bureaucratic hindrance in an economic solution to the diseases than a solution and very much at the farmer's expense?” - Peter McSporran
A hundred thousand tonnes does not seem such a big figure when you think that in its heyday, little Rhodesia and even Zimbabwe used to export some seventy thousand tonnes of beef annually. Due to quality criteria and veterinary restrictions, the export beef was almost totally produced from commercial farms. It is said that much of this arrived in Europe through South Africa and Portugal.
“The offtake ratio from ranches and farms with mixed agriculture was estimated at 24% during 1964-74, so that approximately 635,000 head of cattle were slaughtered in 1972 and 660,000 in 1975, compared to 369,000 in 1965. Over 50% of the beef production is exported to other African countries and Europe.” - Agency for International Development, Washington
I am wandering off track again, but Thomas informs me that in the Alentejo, the Portuguese bread basket, land prices for ordinary grazing or non-irrigated land sell for between five thousand and nine thousand Euros per hectare. In contrast, irrigated land can sell for between fifteen thousand to forty-five thousand. Yes, there are subsidies, but it is obvious that farmland prices are way above that, which would allow a reasonable return per Euro invested. This is a clear indicator that individual farmers are not purchasing land, and more importantly, it prohibits entry into the industry by new farmers unless they can find a lease, which is exceptionally hard to do. Is this the death knell of the family farm? Why labour long hours for a few Euros profit if you are lucky when you can sell. After all farming is not so attractive to the younger generation who want consumer pleasures now.
As I have said previously, some of my time in the CFU was spent helping farmers with their business models, generally only after their previous efforts to raise money had failed. There were two types of farmers that were most commonly in trouble. The over-capitalised and the under-capitalised. Those who borrowed little or were cash farmers, no matter what they produced, normally did well provided they were average farmers or better. Even tobacco farmers fell into both these categories despite it being the most favoured entry to farming. The over-capitalised had little fear in borrowing money, sometimes with a tractor dedicated to almost every task or a large combine, got to be bigger than the neighbours, for a very small hectarage of winter cereals and let's be honest often with the largest Landcruiser, perhaps two, one for hunting and fishing, one for the farm along with a large boat on Kariba. Also, remember the latest model Mercedes to use for town trips. I remember telling one farmer he did not need two seven-tonne trucks and trailers for the size of the enterprise, in reply, he said he needed the second one for his polo ponies. Yes, some of these so-called farmers in distress had this attitude, but they were a very small proportion of what was a good, solid industry working within its means. The undercapitalized lived off their depreciation and spent much of their time in the workshop rather than in the lands in their efforts to keep their dilapidated equipment running, not being in a position to replace it. Unlike tobacco, some high-value crops could bring feast or famine. Coffee was one relying on the size of the South American crop for its fortunes. Frost in Brazil was a sure way to get premium prices in Zimbabwe, leading to overspending on capital goods to avoid tax. The next year, coffee, also being very much biennial, would get into huge trouble when poor prices and poor yields coincided. I think coffee farmers were probably the most frequent visitors to our office, often with huge assets from bumper years and little cash to get them through the lean. The most stable and clever business plan was the Harare South and Beatrice, extensive dairy farmers. Their main asset was their cows supported by a rudimentary dairy, a small tractor, a few trailers and a baler, all very old but in good running condition. They did not try to achieve high yields and, therefore, bought little stockfeed. If things got tough, they sold a few cows rather than borrow from the bank. As a group, most were cash farmers who did not flaunt this by driving dilapidated pick-ups rather than a Mercedes.
“Driving an expensive car when you are up to your neck in debt is not a measure of your success but rather your vanity.” - Peter McSporran
Thinking back to Zimbabwe, we were lucky that land prices were low and that entry could be made into agriculture by growing high-value crops such as tobacco. Even in mid-1994, young farmers were still entering the industry despite the threats of the Government wanting to acquire a further five million hectares of the twelve and a half million hectares still held by commercial farmers. At this stage, there was no indication Mugabe was planning to get rid of all of us white farmers. Mugabe was now openly talking about this figure despite them having already obtained three and a half million on a willing seller and willing buyer up to that date since independence, with much of it lying idle. Further, as Cedric Wilde said at his AGM in Bulawayo, there was plenty of derelict land and land for sale to meet the Government's needs without taking productive farmland. I think I am beginning to sound like a stuck gramophone record in saying the resettlement where it took place was an abject failure, but the biggest concern was that a survey carried out that year indicated that nearly fifty percent of this acquired area was in the hands of single landowners with party connections. One contradiction that took place about this time was when seventy leases were cancelled belonging to black benefactors, including Witness Mangwende, who had been Minister of Lands when they were issued. There is no doubt that the internal party squabbling over properties had begun.
Meanwhile, some of the remaining farmers on the first designation list of seventy commercial farmers were in court. They included Alistair Davies, his Centenary farm, Mike Clarke, Mwenezi, Henry Elsworth, Kwekwe and Elna McLean, Gweru. The advocate was Adrain de Bourbon, whom I knew from army days and whose sense of direction caused much mirth in our unit, the worst case being a night deployment from Marymount Mission for him to end up after several hours of hard bush bashing back on base to his surprise, not so his troopies. To give him his due in the courtroom, his knowledge and presentations of the cases on behalf of the plaintiffs were excellent. Despite his poor sense of direction, he was probably Zimbabwe’s leading advocate. To this extent, Mugabe said the land issue was no longer legal but political. Goodness knows what pressure was being put on the judge hearing the case, which Anthony, Hasluck and myself dutifully attended. At the same time, Mugabe did not recognise it as an oxymoron to represent the country at an investment conference in London while at the same time at home threatening to wreck the economy by destroying property values and investor confidence by taking away land from the legal owners' especially as now they were threatening no compensation for the land they took.
By July 1994, the commodity associations and branches of the Commercial Farmers Union (CFU) were having their AGMs, and many well-known faces were leaving the council, including my good friends Selby Chance from cattle and Ian Millar from cotton. Ian, with a broad Scots accent, had the affront to say during his departure speech at his AGM that he never understood what I said due to my accent during his time on council. Selby and Phil Brink both dropped out of the race for Vice President of the CFU, leaving Nick Swanepoel unopposed for the post. Bob Swift took over chairmanship of the Cattle Association and Guy Menage became President of the Cotton Association.
The Zimbabwe Tobacco Association (ZTA) was also experiencing a change of leadership. Ian Alcock, a very approachable president who had strengthened links with the CFU, stood down to be replaced by my friend Peter Richards, a broad-minded, deep-thinking leader who, together with me in taking over as president of the CFU, would open the new Blackfordby. Although he now lives in Australia, we still correspond.
Strangely, the ZTA decided to have two VPs, Rob Webb and Richard Tate. Two totally opposing characters, Rob, an old-school straight-laced conservative and Richard, more of Nick Swanepoel’s ilk, happy to operate in the greyer areas of farming politics. They had two things in common: both were successful large-scale farmers and were not scared to borrow money. Rob dressed impeccably, even going to the extent, to my amazement, that he bought his expensive custom shoes from the London high streets, as opposed to me, happy to wear Bata. Richard was a much more casual dresser and had a casual manner, which hid his Machiavellian manoeuvres in trying to protect his and fellow tobacco farmers, even if it meant at the expense of other non-tobacco growing farmers. As a matter of course, these initiatives were to fail.
Disclaimer: Copyright Peter McSporran. The content in this blog represents my personal views and does not reflect corporate entities.
Thank you for another good read.
Individual farmers are facing the same problem of high land prices here in Ontario, Canada. In Oxford County where I live, land prices are between CDN$20 000 to $30 000 an acre - (EU13 000 to 20 000) for un irrigated crop land. There is very little beef production except on marginal land unsuitable for cropping. With a quota system, established dairy farmers do quite well. Good yields of maize, soya and wheat can be achieved without irrigation.
The problem is, that with a totally irresponsible and massive immigration policy over the last 15 years of Liberal government, demand for land for housing and industrial expansion has resulted in pressure to re-zone agricultural land…