Delta to the rescue

Delta Corporation, one of the largest corporations in the country which controlled the beverages industry, announced a Z$10 billion initiative to supply inputs to boost the production of maize, sorghum and malting barley.

The inputs were expected to support the production of 70 000 tonnes of maize, 60 000 tonnes of malting barley, and 20 000 tonnes of sorghum annually.

The move was welcomed by Minister of Lands, Agriculture and Resettlement Joseph Made, as well as Minister for Information and Publicity Jonathan Moyo, as evidence of Delta’s support of agrarian reforms.

The United States embassy, however, did not seem amused. It cited a local economist as saying Delta’s motivations were based less on altruism and more on protecting its bottom line.

The economist, however, said the initiative was not new. It was an expansion of a programme which Delta had been operating for the past 12 to 15 years.

Full cable:

Viewing cable 02HARARE2122, DELTA CORPORATION: FINANCING ITS OWN INTERESTS

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UNCLAS HARARE 002122

SIPDIS

NSC FOR SENIOR AFRICA DIRECTOR JFRAZER

LONDON FOR CGURNEY

PARIS FOR CNEARY

NAIROBI FOR PFLAUMER

E.O. 12958: N/A

TAGS: EAGR EFIN PGOV ZI

SUBJECT: DELTA CORPORATION: FINANCING ITS OWN INTERESTS

WHILE APPEARING BENEVOLENT

¶1. Summary. In a new development, local powerhouse Delta

Corporation (which, coincidentally, owns several breweries)

has reportedly announced a Zim $10 billion initiative

(approximately US $14.5 million at the parallel rate) whereby

it will loan inputs for the production of maize, sorghum and

malting barley to selected farmers. However, while the

publicity has cast Delta as a solid corporate citizen doing

its part to uphold the GOZ’s programs, Delta’s self-interests

are driving the deal. End summary.

¶2. According to published reports, Delta Corporation has

announced a joint venture with the GOZ whereby Delta will

loan the equivalent of Zim $10 billion over two growing

seasons to farmers in the form of agricultural inputs. These

inputs will reportedly support the production of 70,000

tonnes of maize, 60,000 tonnes of malting barley, and 20,000

tonnes of sorghum annually. While this has been met with

great fanfare by Minister of Lands, Agriculture and

Resettlement Joseph Made, as well as Minister for Information

and Publicity Jonathan Moyo, as evidence of Delta’s support

of agrarian reforms, the details of the transaction give a

different gloss.

¶3. Delta subsidiaries include United Bottlers (Coca-Cola),

National Breweries, and Chibuku, which produces the local

opaque beer known as “shake-shake.” According to published

accounts of the deal, the inputs and support provided by

Delta “will be treated as loans to be netted off against

final prices.”   Delta further reserves the rights to manage

the program and select which farmers will receive the loans.

Additionally, while the farmers will forward all maize

produced to the Grain Marketing Board (GMB), which by law

controls all movements, sales and purchases of maize within

the country, Delta has requested an “undertaking and

guarantee” that for as long as maize remains a specified

commodity under the control of the GMB, Delta will be

guaranteed its quota — with only the surplus to be

distributed to other buyers. If this deal takes place as

agreed, Delta will thus have provided loans to selected

farmers (with their loan repaid by skimming off the first cut

from the produce) who will grow the agro inputs required for

the operations of Delta’s subsidiaries.

¶4. Comment. One local economist notes that this is actually

an expansion of a previous program which Delta has been

operating for the past 12-15 years. Historically, Delta has

preferred to grant malting barley, hops, and grain inputs to

“captive farmers,” who then provide inputs for Delta’s

various breweries. According to this economist, the dollar

value of the program has increased, but this has much more to

do with inflation than with increased hectarage.

Additionally, he believes that Delta is taking the

opportunity to “make a virtue out of a necessity” by publicly

announcing the program in this fashion. While it is true

that the increase of maize inputs is a new initiative,

Delta’s motivations are based much less on altruism and more

on protecting its bottom line. End comment.

SULLIVAN

(14 VIEWS)