Floriculture can spur Zim economic growth

By Nyasha J Kavhiza | Oct. 28, 2022

Zim economic

A WELL-DIVERSIFIED agricultural sector will result in remarkable success. Floriculture is a lucrative option.

In the late 1990s, the manufacturing sector was the second foreign currency earner after the agricultural sector. Diversification cushions the nation against price volatility in the international markets and disease epidemics. Most of us are conversant with what happened to the cotton industry — the high costs of producing the crop in Zimbabwe could not match with the global prices of the “white gold”. American and Asian producers could afford to sell at such prices because they grow genetically modified cotton which has resistance to insect pests that also serve as vectors for diseases, thus lowering the costs of production. Unfortunately, cotton farmers in Zimbabwe have to incur high costs of purchasing chemicals to control the pests. Moreover, whenever an epidemic occurs in monoculture, for example the wildfire disease caused by bacteria in tobacco, the whole crop will be wiped off, even the name of the disease reveals its rapid and invasive nature. I think that the chaos caused by Tuta absoluta, in tomato crop across Africa in 2016 illustrates the damaging effects of outbreaks of invasive pests and diseases on agricultural operations. Those who relied solely on tomato as their enterprise suffered serious losses. In Zimbabwe, the move towards cash-crop enterprises such as floriculture can provide a safety net for the agricultural sector. The fact that the traditional tobacco belt is the same region that most flower-growing farms are located makes diversification reasonably practicable.

Floriculture is a capital-intensive enterprise and one of the models growers can adopt is the cooperative approach. The small-scale farmers come together, pool resources, set up their greenhouses, establish the crop, run the routine operations and ferry the crop to handling facilities collectively rather than as individuals. The farmers will enjoy the economies of scale that are wrought by the collaborative work. We have to remember that Seed Co Limited, a very powerful agricultural organisation and force to reckon with on the African continent was established in 1940 as the Seed Maize Association in then Rhodesia (Zimbabwe) following an initiative of farmers that got together with well-spelt out objectives and intentions. The organisation has evolved over the years, as the Seed Maize Cooperative in 1979, administered by the Commercial Farmers and then Seed Co-op in 1983. Without a doubt, Seed Co Limited has contributed immensely to Sub-Sharan Africa’s seed industry. A similar model can be adopted by the Exporting Flower Growers’ Association of Zimbabwe (EFGAZ).

The outgrowing schemes proved to be of less significance in improving productivity of the flower-growing industry in Zimbabwe. We are beginning to see a similar trend in tobacco production as the out-growers are being short-changed by the contractors. Lenders (financiers) such as the Agricultural Finance Cooperation (AFC) ought to support such projects, thus stimulating economic growth. It is basic economics that economies grow on the basis of credit. Credit lines have to be made available to sectors with high growth potential such as floriculture which grew at a rate of 20% per annum at its peak in Zimbabwe. The high-profit margins of such enterprises enable the producers to repay the loans and interests whilst their operations continue running. The growers’ adherence to the set global standards for export flowers translates to good returns and more foreign currency for the nation. Therefore, the functions carried by organisations such as EFGAZ are crucial. A well-established floriculture industry will open up opportunities for important downstream industries such as logistics, marketing, forwarding, finance and consultancy. Entrepreneurial individuals can take advantage of the presented opportunities. Currently, most cut-flower producing farms are located around Mashonaland province for ease of access to freight facilities since flowers are highly perishable. However, when the industry expands more facilities will have to be built across the country for the purposes of efficiently ferrying the commodity to intended destinations. This is the simplest version of how an economy grows and how floriculture can be a means to an end to Zimbabwe’s economic growth.

Akin to tobacco farming, the climate and edaphic factors have given Zimbabwe an advantage over competitors in the European markets. Some friends of mine in the Zimbabwean tobacco industry would tell me of the cooperative programmes with China whereby some of the Zimbabwean tobacco varieties would be grown in China, while the Chinese ones would also be grown in Zimbabwe. It was observed that the Zimbabwean varieties grown in China did not perform as well as they did under the home environmental conditions.

So this shows an interaction of our environment with the genotypes (tobacco varieties). That gives us great leverage, meaning that our trade partners have no choice, but to import the Zimbabwean-produced commodity so as to attain the quality levels desired by the market. That also goes for flower production, for example, roses are phototropic, which means that they grow towards a light source, the Zimbabwean climate provides a conducive environment where the sun is overhead for most of the day, leading to the attainment of straight cut-flowers, a very important quality trait in floriculture. The flowers can be produced all-year-round and during the harvesting season, operations run 24/7 broken down into a series of three shifts a day. Such a production system ensures high levels of employment as well as productivity resulting in increased turnovers and margins.

Let us look at this enterprise from an economic point of view. We have to consider the macroeconomic conditions prevailing in the country and their bearing on the industry. Some lessons from history will help us see some arbitrages and opportunities presented by floriculture in this particular era. When the floriculture industry was rapidly expanding in the late 1990s, increased inflation and the depreciating Zimbabwean dollar took a toll on the economy. Paradoxically the depreciation of the Zimbabwean dollar stimulated growth of the floriculture industry. Most farmers saw the cut flower industry as a way of hedging against the depreciating Zimbabwean dollar, something similar to the current trend whereby most farmers are flocking to tobacco production where they can get 60% of their earnings in foreign currency and the remaining 40% as local currency. Cut-flower production offers a better deal than what the tobacco farmers are getting. The fact that the cut-flowers are sold in foreign markets means that the foreign currency prices are less affected by the value of the Zimbabwean dollar, unlike the tobacco growers’ scenario.