Zambia nd2010 ppt-mudenda


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Zambia nd2010 ppt-mudenda

  1. 1. Agricultural Productivity Rural Livelihood and Trade in Agriculture Presented to the NRG FEATS PROJECT
  2. 2. Outline <ul><li>Introduction </li></ul><ul><li>Agriculture policy and structure </li></ul><ul><li>Contribution of agriculture to economy </li></ul><ul><li>Agriculture productivity </li></ul><ul><li>Poverty and agriculture </li></ul><ul><li>Agriculture and trade facilitation </li></ul>
  3. 3. Introduction <ul><li>Economy registered positive growth since 2001 </li></ul><ul><li>Macroeconomic indicators stablising </li></ul><ul><li>GDP per capita US$ 355 (2002) US$625 (2005) US$ 1183 (2008) </li></ul><ul><li>Poverty still high 64% poor PLUS ranked 165 out of 177 countries on the UNDP’s HDI </li></ul><ul><li>Poverty 80% in rural areas 34$ urban </li></ul><ul><li>Threatens country’s ability to achieve MDGs </li></ul><ul><li>Government efforts: - </li></ul>
  4. 4. Cont’d <ul><li>PRSP , FNDP and Now SNDP </li></ul><ul><li>Also emphasised in: </li></ul><ul><ul><li>The commercial, trade and industrial policy (CTI) </li></ul></ul><ul><ul><li>diagnostic trade integrated strategies, (DTIS) and the National Agricultural policy </li></ul></ul><ul><li>Emphasize poverty reduction through agricultural production and trade </li></ul><ul><li>Need to understand the linkage between poverty </li></ul><ul><li>CUTS - through (FEATS) project seek to generate empirical data on the linkage between poverty, agriculture and trade </li></ul>
  5. 5. Objectives:  <ul><li>Role of and constraints faced by the agricultural sector with focus on rural livelihoods, productivity, and trade; </li></ul><ul><li>Trade facilitation needs and measures with focus on those directly related to landlockedness; </li></ul><ul><li>Development of coherent thinking and practice in the areas under study to advance poverty reduction and development objectives. </li></ul>
  6. 6. Methodology <ul><li>Two phased: </li></ul><ul><li>Phase 1: Secondary data sources from both national and international organizations and authorities – CSO, MACO, FAO WB etc </li></ul><ul><li>Phase 2: Primary data collection – interviews with stakeholders Mumbwa – two areas </li></ul><ul><li>Limitations </li></ul><ul><li>Inconsistent data across major sources FAO, World Bank and Government ministries </li></ul><ul><ul><li>employment, international trade and investment flows tend to be difficult to generate, and, at times, significantly underestimated </li></ul></ul>
  7. 7. Key Changes <ul><li>Between 1964 – 1990s state dominated marketing, input supply and processing </li></ul><ul><li>Liberalisation in 1991 - resulted in some diversification </li></ul><ul><li>Private sector participation in </li></ul><ul><ul><li>Production promotion - e.g., Outgrower schemes, </li></ul></ul><ul><ul><li>processing facilities </li></ul></ul><ul><ul><li>Export promotion initiatives have emerged </li></ul></ul><ul><li>Structure changing </li></ul><ul><li>Small-scale category - increasing, medium $ large-scale largely unchanged over the years </li></ul><ul><li>Small-scale farmers supply over 70% of the national food requirements </li></ul>
  8. 8.   Structure <ul><li>. </li></ul>    Farmer category Land Size (Hectares) Total No. of farmers in 2002 Nature of production   Small scale farmers 0.5 - 9 800, 000 households Mainly on substance food crops and few cash crops plus livestock Medium Scale farmers 10-20 119 200 Food crops and cash crops, plus livestock commercial/subsistence Large scale farmers > 20 25 230 Cash and food crops and live stock
  9. 9. Agricultural Policy <ul><li>Private sector driven agriculture that </li></ul><ul><ul><li>assure national and household food security </li></ul></ul><ul><ul><li>generate income and employment to maximum feasible levels </li></ul></ul><ul><ul><li>contribute to sustainable industrial development </li></ul></ul><ul><ul><li>expand the sector's contribution to the BoP - increase total foreign exchange earnings from 3-5% to 10-20 % </li></ul></ul><ul><ul><li>boost the sector’s growth to 10% after 2006 and increasing its contribution to GDP from 18-20% to 25% </li></ul></ul>
  10. 10. Key players <ul><li>Policy making –preserve of MACO & Livestock development </li></ul><ul><li>MoL, MEWD, MTENR, MFNP </li></ul><ul><li>Statutory bodies- FRA and crop specific initiatives such as TBZ, Coffee Board of Zambia, Golden Valley Agricultural Research Trust (GART), Cotton Development Trust (CDT), Livestock Development Trust (LDT) </li></ul><ul><ul><li>ZEGA Trust </li></ul></ul><ul><li>MCTI –trade oriented </li></ul><ul><li>Private sector association ACF, ZNFU etc </li></ul>
  11. 11. Cont’d
  12. 12. Contribution <ul><li>GDP - directly an average of 20% drives GDP </li></ul><ul><li>Manufacturing – over 60% of sub-sector output such as tobacco, processed food , textiles and leather </li></ul><ul><li>Services – transportation services etc </li></ul><ul><li>Employment - accounts for 15% of formal sector </li></ul><ul><li>Informal sector employment - 70% countrywide </li></ul><ul><ul><li>women key players </li></ul></ul><ul><li>Livestock sector – largely neglected BUT has potential </li></ul><ul><ul><li>Good area for poverty reduction –traditionally practiced </li></ul></ul><ul><li>Food security – small scale farmers driven – </li></ul><ul><li>Maize production Good in 6/15 , Bad in 8/15 years </li></ul>
  13. 13. contd <ul><li>Rice deficits, wheat oscillates </li></ul><ul><li>Forex – from US$207 Mn (2001) to US$476Mn. </li></ul><ul><ul><li>Private sector, Regional integration key to increase e.g. Congo DR, SACU and Zimbabwe </li></ul></ul><ul><li>Issues around Maize- bans – making taking advantage of regional markets </li></ul><ul><ul><li>Price controls- benefit traders at expense of small scale farmers </li></ul></ul><ul><ul><li>Goveren J–makes commercial sense to export even in deficit years </li></ul></ul><ul><li>Livestock –neglected for a long time but has huge potential </li></ul><ul><li>FDI –pledges hang around 6% of total FDI </li></ul>
  14. 14. Contribution to export earnings
  15. 15. Key exports <ul><li>Out grower schemes and PA critical in cotton, sugar, coffee, horticultural and floricultural products ( key to access inputs, credit and output market, technical training and coordination) </li></ul><ul><li>Poor maize policy – discourage private sector initiative e.g. bans </li></ul>
  16. 16. Agricultural productivity <ul><li>Critical to efficiency gains and export competitiveness </li></ul><ul><li>Commercial farmers crops and livestock productivity meets global level (WB, 2008) </li></ul><ul><li>Small scale farmers – below regional levels for crops and livestock (lower than all other sectors in Zambia) </li></ul><ul><li>70% of labor is inefficiently being used </li></ul><ul><li>Yield metric tons per hector is very low: averaging at less than 1.5 metric tons per hectare </li></ul>
  17. 17. Contd
  18. 18. Livestock Productivity <ul><li>An estimated 42% of Zambian landmass is suitable for agriculture/livestock activities with 21% of the total land area suitable for rangeland grazing. </li></ul><ul><li>Total livestock population of Goats, cattle and pigs are far less than the human population. </li></ul><ul><li>This contrasts greatly with countries like Namibia and Botswana that have established export oriented beef industries. </li></ul>
  19. 19.   Factors affecting productivity <ul><li>Neglect of the Sector - government policy failures - delay in input delivery </li></ul><ul><li>Dependence on rain – only 11% of irrigation potential is used (2006) </li></ul><ul><li>Weak business orientation </li></ul><ul><li>Genetic Engineering </li></ul><ul><li>Education- good education levels lead to high returns </li></ul><ul><li>High Transactions costs problems – lack of complementary infrastructure in rural areas plus export </li></ul><ul><li>Land tenure system </li></ul><ul><li>Marketing structures </li></ul><ul><li>Trade and investment </li></ul>
  20. 20. Cont’d <ul><li>Agriculture finance – costly 25% and conditions of borrowing strangulating </li></ul><ul><li>Default rate highest -37% non-performing loans </li></ul><ul><li>Low producer price for maize, rice etc </li></ul><ul><li>HIV/AIDS –limited labour (sickness or caring for sick) </li></ul><ul><li>Key institutional capacities not aligned for small scale farmers e.g. GART, ACF etc. </li></ul>
  21. 21. Livestock productivity <ul><li>prevalence of animal diseases; </li></ul><ul><li>high cost of veterinary drugs; </li></ul><ul><li>inadequate livestock nutrition and water; </li></ul><ul><li>poor animal husbandry practices/management; </li></ul><ul><li>inadequate marketing infrastructure; </li></ul><ul><li>lack of appropriate livestock research; </li></ul><ul><li>inadequate livestock extension and health services; </li></ul><ul><li>lack of linkages between livestock research and livestock extension. </li></ul>
  22. 22. Poverty and agric trade <ul><li>Improving agriculture productivity and trade could accelerate poverty in country </li></ul><ul><li>The sector accounts for over 70% of employment in the country and is core in rural livelihood </li></ul><ul><li>Commercial farmers already geared for exports </li></ul><ul><li>Government – recognises importance of trade- FNDP, CTI etc </li></ul><ul><li>Engaged in regional and MTS negotiations. </li></ul>
  23. 23.   REGIONAL ARRANGEMENTS <ul><li>Key RTA </li></ul><ul><li>World trade organisation </li></ul><ul><ul><li>AoA - illegalises unfair trade and implementation beneficial to LDCs </li></ul></ul><ul><li>EBA , Cotonou agreement (EPAs) useful to Zambia </li></ul><ul><li>AGOA – selected products </li></ul><ul><li>SADC </li></ul><ul><li>Promotes regional food security, seed bank, etc </li></ul><ul><li>COMESA – Promote food security </li></ul><ul><li>Alliance for Commodity Trade in ESA (ACTESA) to foster investment, development policies, regional trade and marketing of staple agricultural commodities </li></ul>
  24. 24. Trade facilitation <ul><li>Zambia is land-locked making it harder to reach export markets and realize economies of scale, as well as access cheap import. </li></ul><ul><li>Air transport -high value and low weight and volume products, but also improved access to air transport </li></ul><ul><li>BUT -some firms suspended horticultural exports to Europe account of high transportation costs </li></ul><ul><li>A number of Initiatives to facilitate trade –not agriculture only </li></ul>
  25. 25. Cont’d <ul><li>WTO facilitated trade facilitation programmes such as assessing their trade facilitation needs and priorities. </li></ul><ul><li>UNCTAD, ICT, WCO, WTO programmes - Export priority identification , ACYCUDA EIF etc </li></ul><ul><li>Regional efforts – One border posts Chirundu, Nakonde?? </li></ul><ul><li>North South Corridor development –under Aid for trade </li></ul><ul><li>ACTESA –information provision </li></ul><ul><li>USAID MATEP, Southern African Global Competitiveness Hub, technical assistance etc </li></ul>
  26. 26. Trade corridors <ul><li>. </li></ul>
  27. 27. Cont’d <ul><li>Southern Corridor – to Durban </li></ul><ul><li>Maputo corridor </li></ul><ul><li>Tazara corridor – Dar es Salaam </li></ul><ul><li>Walvis bay </li></ul><ul><li>Beira and Nacala Corridors: via Harare by rail </li></ul><ul><li>Angola –lobito </li></ul><ul><li>Infrastructure poor </li></ul>
  28. 28. Cont’d <ul><li>Initiatives </li></ul><ul><li>The Harmonized Commodity Description Coding System </li></ul><ul><li>COMESA Customs Declaration Document (COMESA-CD </li></ul><ul><li>COMESA Carrier's License </li></ul><ul><li>Harmonized Axle Loading, Maximum Vehicle Dimensions and road transit charges </li></ul><ul><li>Yellow Card Scheme </li></ul>
  29. 29. EXPORT BARRIERS <ul><li>Sanitary and Phytosanitary measures (SPS </li></ul><ul><li>Minimum Residual Level </li></ul><ul><li>Market Standards </li></ul><ul><li>Pests Risk Assessment (PRA) </li></ul><ul><li>Complex tariff structures and import arrangements </li></ul><ul><li>Restrictive rules of origin </li></ul><ul><li>Agriculture still regarded as sensitive sector by most regional countries </li></ul>
  30. 30. CASE STUDY <ul><li>Mumbwa </li></ul><ul><li>Over 32 000 farmers </li></ul><ul><li>No direct external market BUT through PA agric business organizations </li></ul><ul><li>Outgrower schemes –cotton and paprika </li></ul><ul><li>Key issues: </li></ul><ul><li>Maize poor marketing arrangements, untimely and inadequate input supply, low prices, private traders </li></ul><ul><li>Cotton – outgrower scheme sponsored </li></ul><ul><li>Main source of income </li></ul>
  31. 31. Cont’d <ul><li>Alternative to maize </li></ul><ul><li>Outgrower scheme managers: determine input and output prices </li></ul><ul><li>Contracts are designed by scheme owners and are unclear </li></ul><ul><li>Prices are usually low </li></ul><ul><li>Quality determination is not clear and any losses are transferred to farmers </li></ul>
  32. 32. Recommendations <ul><li>Government must: </li></ul><ul><li>Provide complementary services – infrastructure, research warehouses & support services necessary for private sector </li></ul><ul><li>Reduce policy confusion –maize marketing </li></ul><ul><li>Trade facilitation infrastructure and regional and MT negotiations </li></ul><ul><li>Facilitate code of conduct in outgrower schemes </li></ul><ul><li>Promote emergence of farmer organization to encourage coordinated approach to export promotion </li></ul><ul><li>Must be timely in providing inputs, purchases etc </li></ul><ul><li>Donor coordination </li></ul><ul><li>Government must reduce unnecessary intervention and reprioritse its expenditure on agriculture </li></ul>
  33. 33. cont <ul><li>Land policies must be improved upon </li></ul><ul><li>Recommendations to scheme owners </li></ul><ul><li>Provide a transparent production and marketing chain </li></ul><ul><li>Loan recovery must well explained through unbiased contracting methods, risks etc must be equally taken </li></ul><ul><li>Civil Society organisations </li></ul><ul><li>research and information dissemination network to all stakeholders in the various provinces </li></ul><ul><li>Encourage the Zambian Government to promote infrastructure for agricultural production and exports </li></ul>
  34. 34. Cont’d <ul><li>Lobby government and donors for more resources to be invested in the most binding constraints in agricultural </li></ul><ul><ul><li>Sponsor Produce association targeting small scale farmers </li></ul></ul><ul><ul><li>Buy food aid from the regional </li></ul></ul><ul><ul><li>Coordinate closely in programme sponsorship. </li></ul></ul>
  35. 35. Thank you for listening