48 Farm Finance Over the past fifteen years, smallholder farmers have experienced difficulties in accessing finance. The expansion of this farming sub-sector in the Fast Track Reform period has increased the extent of areas not covered by financial services. In the A2 schemes, unclear tenure and lack of track record in farming have been barriers to private sector provision of credit. In addition, prevailing hyperinflation has made credit financing uneconomic. Thus the bulk of available farm finance has been from government sources which have been rather limited due to fiscal constraints and been largely inaccessible to smallholder farmers due to capture by elites. Limited Farmer Capacity The state of agricultural advisory services is currently limiting in its support of the transformed agricultural sector. A significant number of reform beneficiaries do not have adequate farming skills. Food Security Droughts and land transfers have led to significant food production shortages and depleted food reserves. The general lack of foreign currency has limited the country’s ability to import food. In addition, the effects of droughts and HIV/AIDS have led to asset disposal by the chronically food insecure, further increasing their vulnerability. In urban areas, controls on maize movements have reduced access to grain from rural areas, forcing households to depend on expensive industrially milled grain. Foreign Currency Earnings Historically, the agricultural sector has been a major contributor to foreign currency earnings for Zimbabwe. Land transfers have, however, led to drastic reductions in tobacco, horticulture and soya bean production with detrimental effects on foreign currency earnings at a time of great national need. 6.3.3 Social Protection Very few former farm workers were resettled in the reform program and the newly resettled farmers have, as yet, not employed significant numbers of former farm workers. Thus within the rural areas there are large numbers of former farm workers without stable means of livelihood. In all smallholder areas there is, also a large proportion of chronically vulnerable groups of households, including the old, resource poor and those affected by HIV/AIDS, whose situation is particularly precarious due to the effects of the recent droughts. The situation of these vulnerable groups is even worse in the newly resettled areas which lack essential social infrastructure including roads, health facilities, schools, retail outlets and other small non-farming industries offering social services and alternative income generating opportunities. Development of viable communities following the reforms will be difficult if such groups are not catered for. The loss of urban employment opportunities, due to closure and / or downsizing of some

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