- The Washington Times - Monday, June 5, 2000

HARARE, Zimbabwe Business leaders and commercial farmers predict disaster for an already staggering economy when squatters begin seizing hundreds of white-owned farms on a "first-come, first-served" basis as early as this week.

The chaotic takeover was authorized on Friday with the listing by President Robert Mugabe of 804 farms to be seized "immediately," including the cattle ranch of former Prime Minister Ian Smith. The properties amount to about 5.2 million acres, or almost 20 percent of all white-owned land.

Chenjerai Hunzvi, head of the independence war veterans association whose members already have overrun some 1,500 farms, said the land would be distributed on a "first-come, first-served" basis, setting the stage for a chaotic scramble.

Economists and businessmen are dismayed by the move, warning the effect on Zimbabwe's mainly agricultural economy will compound an already severe foreign currency shortage and hurt agriprocessing industries, banks and merchants who cater to farmers.

The economy, reeling from the costs of keeping troops in Congo to support President Laurent Kabila, already is suffering from fuel shortages that have crippled industry and exporters.

The foreign currency shortage has driven the value of the Zimbabwe dollar from 2.27 cents in late April to 1.6 cents last week. Airlines have begun adding a 40 percent surcharge on tickets bought in Zimbabwe.

Tourist bookings are off by some 80 percent, according to Tourism Council officials. Prices for vegetables, which were grown principally on now-occupied commercial farms, have tripled while winter wheat plantings are down one-third because the farm invasions have prevented new planting.

Economists predict bread shortages in six months, when the present crop should be heading to flour mills, unless the government finds money to import an extra 100,000 tons of wheat.

It is still not clear exactly how the land will be redistributed. The official decision is supposed to be made by a land committee composed of Mr. Hunzvi, the minister of agriculture and the head of the white-led Commercial Farmers Union.

But, after Mr. Hunzvi's statement last week, that has been placed in doubt.

The Commercial Farmers Union has estimated that production on the farms to be seized was worth $163 million last year, but would decline to $32 million after redistribution.

That view is supported by statistics from the Ministry of Agriculture, which show commercial farms are three to six times more productive than resettled lands.

Crops currently are planted on less than 5 percent of the 8.4 million acres already purchased for resettlement by the government. Mismanagement and a lack of capital are blamed for the low planting rate and a lack of irrigation where crops are planted.

The government is ill-equipped to help the new landowners, having no funds for start-up loans to purchase equipment. Experts expect most of the farms will be operated at subsistence levels.

Economist John Robertson notes that the government already is spending some 64 percent of its revenue to pay interest on old debts and is heading for a 15 percent budget deficit this year.

There are also questions about the effect of the takeover on commercial banks, to which the white farmers are heavily indebted.

The Commercial Farmers Union estimates total commercial farm debt at $650 million, but Mr. Robertson puts the figure at a more conservative $150 million to $250 million.

"The banks could foreclose. They have your title deeds, but what are they going to do with them?" said tobacco grower Hugo Firks, whose farm has been overrun and whose brother-in-law was beaten unconscious by invaders last week.

"The headlines are all talking about violence, but the biggest problem is the economy. No money is changing hands," Mr. Firks said.

A recent study by the Zimbabwe National Chamber of Commerce said industry was operating at just 65 percent of capacity compared with 93 percent last year because of fuel shortages.

Hardest hit has been the gold-mining industry, where production is off 40 percent.

"We are almost at a point of no return," said Wonder Maisiri, chief executive of the Chamber of Commerce. "We have spoken to the government, but the government has adopted a very stubborn attitude," Mr. Maisiri said. "They have become almost impervious to economic common sense."

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