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Zimbabwe’s fertiliser industry is in trouble with sales well below capacity; the industry itself blames imports, which are admitted duty-free because of the importance of fertilisers, although the problems many farmers face in funding their requirements have been mentioned.

The industry, dominated by two long-established companies, was largely created in the 1960s along with many other manufacturing industries. These industries had total protection because imports of products made locally were simply banned and inefficiencies were allowed to build up. The industry has thus had problems adjusting to a more modern and open economy.

Raw materials were largely locally supplied during those years because of two factors that no longer exist. In the 1960s there was a surplus of hydroelectricity. This cost almost nothing to generate but was being wasted.

So it could be sold very cheaply and still make a generating profit. So nitrogen fertilisers were made through processes that only made financial sense with such cheap power and with the ability of the maker to sell the by-product, oxygen, to the now non-functioning steelworks. At the same time modest deposits of phosphates could be mined; these are largely gone.

A complex loan scheme was set up that allowed farmers to buy fertiliser on credit and repay these loans when they sold their crops.

Cheating was impossible because all crops had to be sold through marketing boards or through an approved tobacco auction floor and the system was simple to administer since only a few thousand farmers benefited.

After independence strenuous attempts were made to retain the essentials of the model but dramatically expand the numbers who benefited. Increasing strains, unviable subsidies, the need for more imports, the growth of the economy and other factors eventually dished the model. It just did not work any more. Inefficiencies and shortages became rampant. The opening of the economy changed that.

Many other essential Zimbabwean industries have learned to embrace the modern world and the major changes of land reform and the open economy. The tobacco industry, after a short shock in the early 2000s, has recovered with the tobacco buyers and processors creating new business models that through contract farming and far closer relationships with farmers have restored production.

The dairy industry is now busy growing and eating into imports through modernising its products and packaging them in ways consumers desire. Competition in the cotton industry has helped ameliorate serious problems caused by difficult world markets.

Millers, by favouring local suppliers and ethically basing prices on the landed cost of imports rather than world prices, have taken the bulk of commercial production. The way the major brewer has smashed imports, increased purchases of local crops, created more jobs and lowered prices to consumers excites admiration.

The interesting point is that we hear very little from these other agro-businesses. Their owners and managers have worked very hard to change and rebuild their industries and they are now flourishing, although in quite different ways from how they operated a couple of decades ago.

The fertiliser industry now needs to do the same. We cannot see why this industry cannot compete easily against imports, even if it has to import raw materials and blend and package locally, although we think it can do better than that. They should know their customers better than any importer and they should know precisely exactly what these customers need and sell that. The old days of take-it-or-leave-it, inefficiencies and inappropriate protectionism are   gone.

We believe that Zimbabwean fertiliser companies are potentially highly viable as well as being essential. But they need to adapt, modernise and create appropriate business models.

The “good old days” are gone forever: but the even better new days are here for those who can meet their customers demands’. Others have done it; now the fertiliser companies have to do the same.