Agriculture: Miracle Cure for Zambia's Ailing Economy

Source from:  The Times of Zambia (Ndola) Davis Mataka 12/30/2004

IT seems Zambia has now found a miracle cure for its ailing agricultural industry as the main engine of the economy. The sector is again bustling with promise of sustained growth and development with both the traditional and non-traditional wings registering unprecedented increase in volumes of trade For the first time in many years, Zambia has also managed to record two consecutive bumper harvests, stabilised the prices of the staple food - maize and most of all, given hope to thousands of peasant farmers countrywide. With countless socio-economic policies employed, there is no doubt that the country is once more on the threshold of a great renaissance. And only if the fight is relentless, will the realisation of a self-sufficient nation in food security remain elusive. As the year 2004 finally closes, it is important to critically look at one of the sectors where the country has truly excelled to achieve enhanced food security. Considering the way the country has broken its own records in grain production and marketing, one would say Zambia is in a few years poised to reclaim its status in the region as the number one grain producer. For the nation to rise from the ashes like a phoenix and achieve such a feat especially coming from an endemic food deficit and drought-prone area for over a decade, it has taken much sacrifice and determination. Because of deliberate precision and pin-pointed Government policy towards the achievement of food sufficiency, the nation has blossomed as a bread basket and is now being targeted by the World Food Programme (WFP) as a country capable of feeding its hungry neighbours. As the case is in Africa, political stability hinges on stable food security and in that direction, Zambia has scored a first. Government's realisation in the last few years that agriculture can serve as an engine for achieving broad-based growth, reducing poverty, diversifying production and exports and improving national and household security has led to this milestone. Since the 1990s, agriculture has been an increasingly important contributor to the nation's economy and exports - accounting for nearly 22 per cent of the Gross Domestic Product (GDP) in 2001 up from 20 per cent in 1990. Agriculture exports also grew by nearly 14 per cent a year between 1990 and 2001. Most of the exports being fresh flowers, cotton, Tobacco and many others. The year 2004 also saw large commercial farms which generally use modern technology, machinery, irrigation, fertiliser and pesticides increase their tillage and agricultural export produce accounting for 80 per cent of the total nation's production of milk, 75 per cent of wheat and 70 per cent of soya beans and poultry products. The likes of the Lendor Farms, Dar Farms, Satwant Farms, Chilala Farms formed part of the army of specialised farmers who transformed the farming sector. Emergent farmers who were also more commercially oriented than the typical small holder also saw a marked increase in production of the staple foods and cash crops such as cotton, sugar cane and tobacco and entered new frontiers of export- What with the ever increasing European Union (EU) export quotas, or the new Malawi markets that the British American Tobacco (BAT) has broken into. Small holders who hold nearly two thirds of agricultural land and a large share of the national herd tended to grow low value to weight food staples, including about 60 per cent of the country's maize, 90 per cent of sorghum, 85 per cent of groundnuts and virtually all the cassava and other starchy foods primarily for their own consumption. While maize which is the basic staple food accounts for up to 70 per cent of total calories consumed, its dominance has had more to do with government strategies than with the suitability of it as a crop. The characteristics of agricultural had important implications for the design of programmes aimed at improving the competitiveness of the sector, diversifying exports and reducing poverty. And while the liberalisation reforms of the early 90s stimulated growth generally, some 60 to 70 per cent of small holders or small scale farmers did not immediatly benefit from this growth primarily because they lived too far from the markets where inputs could be bought at reasonable prices and where farmers outputs could be sold at a profit. To put that situation into reality, Government inside two years of coming into power put in place programmes such as the Fertiliser Support Programme (FSP) which basically targeted this group of farmers to move away from subsistence farming to a more profitable market oriented system. The wide distribution of heavily subsidised fertiliser has been one of the key policy strategies employed by Government to improve small scale incomes and food security. Since the drastic reduction of subsidy in the 1990s fertiliser prices increased while its availability declined. And with the low production at Nitrogen Chemicals of Zambia (NCZ), it became increasingly difficult for the Government to maintain a steady price regime of fertiliser as most of it was imported from South Africa and the Middle East. The direct effect on small scale farmers was such that, there was nothing available on credit for farmers and even when farmers were able to pay for the fertiliser, it was seldom delivered on time thus posing as threat on productivity. In the last two marketing seasons (2003 and 2004) and while Government continued to be a major player in the fertiliser distribution market, it invited much private sector participation which has now reached its peak and is working very well. For example, in the mid 1990s, some 10 to 12 fertiliser importers were registered with Government while 500 wholesalers and 5,000 retailers were operating nationwide. About 65 per cent of fertiliser used by small scale farmers was supplied by private traders. The system had just been introduced and had its own teething problems. However, the current FSP being spearheaded by Government has proved a huge success and has been singled out as one of the major reasons for the successes in crop management and bumper harvests in the country. Under the scheme, Government has systematically been subsidising 50 per cent of fertiliser and hybrid seed coordinated by district agricultural committees consisting of representatives from the private sector, Government and non-governmental organisations (NGO)s. Prominent among the private firms hired to buy and distribute this fertiliser and seed is Nyiombo Investments, Omnia and the Zambia Seed Company (Zamseed). The role of these privately run firms has been to source, import and distribute the fertiliser countrywide while that of Government was merely to ensure that deadlines were met and inputs reached the remotest of areas before the onset of rains. At least for this year, very few complaints have come from the hinterland about late or non delivery of these farming inputs. Says Nyiombo Investments managing director, Maurice Jangulo, the ultimate aim is to ensure that there is a constant supply of farming inputs all year round to reduce pressure on Government when the planting season is close. Dr Jangulo reveals that his firm has so far set up permanent satellite depots countrywide, which will have all the inputs on standby. "In short, we want to cut the travel and carriage expenses incurred by the poor farmer in search of inputs, by taking the fertiliser and seed closer to him in the districts, he will be able to improve on his profitability and in turn deliver all food to safe depots," Dr Jangulo says. In the last farming season, Nyiombo managed to distribute over 100,000 tonnes of fertiliser countrywide. This latest Government initiative has worked wonders and if it continues would have proved that private sector participation in the economy if harnessed is profitable. Key to any food programme is its marketing programmes and while farmers were free to sell their produce to anyone they wanted, Government was obliged to buy off as much produce from them as possible. This also ensured stability in producer prices and in turn wading off price sharks who buy off produce from farmers at ridiculously low prices which they later sell off exorbitantly unsettling the true market value of produce. It is to that effect that the ministry of Agriculture through the Food Reserve Agency (FRA) has tried to buy off as much produce from farmers and in turn establishing strategic food reserves. Any successful maize marketing programme needs a good road infrastructure to easily ferry farm produce to marketing points. And as part of the strategy for the attainment of food security in the rural or feeder road rehabilitation. The new transport policy seeks to rehabilitate and maintain rural roads through the Road Sector Investment Programme (ROADSIP). This is a sector estasblished by Government and financed by donors. Much has been done through this framework and complemented with efforts of the engineering division of the Zambia National Service (ZNS) thousands of kilometres of feeder roads have been graded and bridges repaired to ensure the safe passage of farm produce from farming areas to marketing points. Deliberate policies have also been undertaken by the Zambian Government to ensure that road rehabilitation works were given to local Zambian companies. Gone are the days when all big road contract tenders were given to foreign firms and the local ones were consigned to clearing trees on road sides or just grading of feeder roads. To encourage that, the Zambian Government enacted the National Council for Construction Act number 13 of 2003 which among many other things has placed deliberate instruments that favour local Zambians run and registered firms over foreign ones. Part six of the Act section 23 sub section 2 states that: "Where an award for a contract is refered to the council for approval and the council determines that the construction works can be done by a Zambian firm, the council shall not endorse its approval and the person shall not award the contract to the foreign firm. In section 24, it states that subject to section 16, a person shall not award a contract for any construction work to a foreign firm unless the foreign firm undertakes the works in partnership or jointly with a Zambian firm. Further, Zambian firms are given seven per cent preference to foreign ones when bidding for a tender, meaning that, if a foreign firm bids seven per cent lower than the bid of a Zambian firm, it is the Zambian firm that wins the tender. Following the enactment of that law, some Zambian firms have won tenders to rehabilitate major trunk roads leading to agricultural rich regions. One such firm is Raubex Zambia, a firm owned by Mr Joseph Mwewa It recently won the tender to rehabiltate the Chingola-Solwezi road and many other smaller contracts. In that manner, local private entreprenuers have been allowed to be on top of the food security drive chain of the nation and not as mere by standers. Such is part of the miracle cure that has eluded the nation in attainnig food sufficiency but discovered by President Mwanawasa led MMD Government. Recently, it was reported that Zambia had excess maize stock and was in the process of exporting some of the grain to Tanzania, Malawi, Congo and maybe Zimbabwe. This has not happened in a long time. The confidence displayed has not come as a surprise but out of hard work and stringent follow up on Government policy. With over 6.3 million cultivated hectares of land in the country rain fed and only 100,000 hectares (two per cent) irrigated, it is imperative for the Government to create capacity in the small scale farmers to invest in irrigation. That will help the country develop its agricultural base quicker than any other regional competitor. Mass food production which ultimately translates into wealth creation must improve annually! Enditem