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Agricultural Productivity Rural Livelihood and Trade in Agriculture

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Title: Agricultural Productivity Rural Livelihood and Trade in Agriculture


1
Agricultural Productivity Rural Livelihood and
Trade in Agriculture
  • Presented to the
  • NRG
  • FEATS PROJECT

2
Outline
  • Introduction
  • Agriculture policy and structure
  • Contribution of agriculture to economy
  • Agriculture productivity
  • Poverty and agriculture
  • Agriculture and trade facilitation

3
Introduction
  • Economy registered positive growth since 2001
  • Macroeconomic indicators stablising
  • GDP per capita US 355 (2002) US625 (2005)
    US 1183 (2008)
  • Poverty still high 64 poor PLUS ranked 165
    out of 177 countries on the UNDPs HDI
  • Poverty 80 in rural areas 34 urban
  • Threatens countrys ability to achieve MDGs
  • Government efforts -

4
Contd
  • PRSP , FNDP and Now SNDP
  • Also emphasised in
  • The commercial, trade and industrial policy (CTI)
  • diagnostic trade integrated strategies, (DTIS)
    and the National Agricultural policy
  • Emphasize poverty reduction through agricultural
    production and trade
  • Need to understand the linkage between poverty
  • CUTS - through (FEATS) project seek to
    generate empirical data on the linkage between
    poverty, agriculture and trade

5
Objectives 
  • Role of and constraints faced by the agricultural
    sector with focus on rural livelihoods,
    productivity, and trade
  • Trade facilitation needs and measures with focus
    on those directly related to landlockedness
  • Development of coherent thinking and practice in
    the areas under study to advance poverty
    reduction and development objectives.

6
Methodology
  • Two phased
  • Phase 1 Secondary data sources from both
    national and international organizations and
    authorities CSO, MACO, FAO WB etc
  • Phase 2 Primary data collection interviews
    with stakeholders Mumbwa two areas
  • Limitations
  • Inconsistent data across major sources FAO,
    World Bank and Government ministries
  • employment, international trade and investment
    flows tend to be difficult to generate, and, at
    times, significantly underestimated

7
Key Changes
  • Between 1964 1990s state dominated marketing,
    input supply and processing
  • Liberalisation in 1991 - resulted in some
    diversification
  • Private sector participation in
  • Production promotion - e.g., Outgrower schemes,
  • processing facilities
  • Export promotion initiatives have emerged
  • Structure changing
  • Small-scale category - increasing, medium
    large-scale largely unchanged over the years
  • Small-scale farmers supply over 70 of the
    national food requirements

8
  Structure
  • .

9
Agricultural Policy
  • Private sector driven agriculture that
  • assure national and household food security
  • generate income and employment to maximum
    feasible levels
  • contribute to sustainable industrial development
  • expand the sector's contribution to the BoP -
    increase total foreign exchange earnings from
    3-5 to 10-20
  • boost the sectors growth to 10 after 2006 and
    increasing its contribution to GDP from 18-20 to
    25

10
Key players
  • Policy making preserve of MACO Livestock
    development
  • MoL, MEWD, MTENR, MFNP
  • 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)
  • ZEGA Trust
  • MCTI trade oriented
  • Private sector association ACF, ZNFU etc

11
Contd
12
Contribution
  • GDP - directly an average of 20 drives GDP
  • Manufacturing over 60 of sub-sector output
    such as tobacco, processed food , textiles and
    leather
  • Services transportation services etc
  • Employment - accounts for 15 of formal sector
  • Informal sector employment - 70 countrywide
  • women key players
  • Livestock sector largely neglected BUT has
    potential
  • Good area for poverty reduction traditionally
    practiced
  • Food security small scale farmers driven
  • Maize production Good in 6/15 , Bad in 8/15 years

13
contd
  • Rice deficits, wheat oscillates
  • Forex from US207 Mn (2001) to US476Mn.
  • Private sector, Regional integration key to
    increase e.g. Congo DR, SACU and Zimbabwe
  • Issues around Maize- bans making taking
    advantage of regional markets
  • Price controls- benefit traders at expense of
    small scale farmers
  • Goveren Jmakes commercial sense to export even
    in deficit years
  • Livestock neglected for a long time but has huge
    potential
  • FDI pledges hang around 6 of total FDI

14
Contribution to export earnings
15
Key exports
  • 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)
  • Poor maize policy discourage private sector
    initiative e.g. bans

16
Agricultural productivity
  • Critical to efficiency gains and export
    competitiveness
  • Commercial farmers crops and livestock
    productivity meets global level (WB, 2008)
  • Small scale farmers below regional levels for
    crops and livestock (lower than all other
    sectors in Zambia)
  • 70 of labor is inefficiently being used
  • Yield metric tons per hector is very low
    averaging at less than 1.5 metric tons per hectare

17
Contd
18
Livestock Productivity
  • An estimated 42 of Zambian landmass is suitable
    for agriculture/livestock activities with 21 of
    the total land area suitable for rangeland
    grazing.
  • Total livestock population of Goats, cattle and
    pigs are far less than the human population.
  • This contrasts greatly with countries like
    Namibia and Botswana that have established export
    oriented beef industries.

19
  Factors affecting productivity
  • Neglect of the Sector - government policy
    failures - delay in input delivery
  • Dependence on rain only 11 of irrigation
    potential is used (2006)
  • Weak business orientation
  • Genetic Engineering
  • Education- good education levels lead to high
    returns
  • High Transactions costs problems lack of
    complementary infrastructure in rural areas plus
    export
  • Land tenure system
  • Marketing structures
  • Trade and investment

20
Contd
  • Agriculture finance costly 25 and conditions
    of borrowing strangulating
  • Default rate highest -37 non-performing loans
  • Low producer price for maize, rice etc
  • HIV/AIDS limited labour (sickness or caring for
    sick)
  • Key institutional capacities not aligned for
    small scale farmers e.g. GART, ACF etc.

21
Livestock productivity
  • prevalence of animal diseases
  • high cost of veterinary drugs
  • inadequate livestock nutrition and water
  • poor animal husbandry practices/management
  • inadequate marketing infrastructure
  • lack of appropriate livestock research
  • inadequate livestock extension and health
    services
  • lack of linkages between livestock research and
    livestock extension.

22
Poverty and agric trade
  • Improving agriculture productivity and trade
    could accelerate poverty in country
  • The sector accounts for over 70 of employment in
    the country and is core in rural livelihood
  • Commercial farmers already geared for exports
  • Government recognises importance of trade-
    FNDP, CTI etc
  • Engaged in regional and MTS negotiations.

23
  Regional Arrangements
  • Key RTA
  • World trade organisation
  • AoA - illegalises unfair trade and implementation
    beneficial to LDCs
  • EBA , Cotonou agreement (EPAs) useful to Zambia
  • AGOA selected products
  • SADC
  • Promotes regional food security, seed bank, etc
  • COMESA Promote food security
  • Alliance for Commodity Trade in ESA (ACTESA) to
    foster investment, development policies, regional
    trade and marketing of staple agricultural
    commodities

24
Trade facilitation
  • Zambia is land-locked making it harder to reach
    export markets and realize economies of scale, as
    well as access cheap import.
  • Air transport -high value and low weight and
    volume products, but also improved access to air
    transport
  • BUT -some firms suspended horticultural exports
    to Europe account of high transportation costs
  • A number of Initiatives to facilitate trade not
    agriculture only

25
Contd
  • WTO facilitated trade facilitation programmes
    such as assessing their trade facilitation
    needs and priorities.
  • UNCTAD, ICT, WCO, WTO programmes - Export
    priority identification , ACYCUDA EIF etc
  • Regional efforts One border posts Chirundu,
    Nakonde??
  • North South Corridor development under Aid for
    trade
  • ACTESA information provision
  • USAID MATEP, Southern African Global
    Competitiveness Hub, technical assistance etc

26
Trade corridors
  • .

27
Contd
  • Southern Corridor to Durban
  • Maputo corridor
  • Tazara corridor Dar es Salaam
  • Walvis bay
  • Beira and Nacala Corridors via Harare by rail
  • Angola lobito
  • Infrastructure poor

28
Contd
  • Initiatives
  • The Harmonized Commodity Description Coding
    System
  • COMESA Customs Declaration Document (COMESA-CD
  • COMESA Carrier's License
  • Harmonized Axle Loading, Maximum Vehicle
    Dimensions and road transit charges
  • Yellow Card Scheme

29
Export Barriers
  • Sanitary and Phytosanitary measures (SPS
  • Minimum Residual Level
  • Market Standards
  • Pests Risk Assessment (PRA)
  • Complex tariff structures and import arrangements
  • Restrictive rules of origin
  • Agriculture still regarded as sensitive sector by
    most regional countries

30
CASE STUDY
  • Mumbwa
  • Over 32 000 farmers
  • No direct external market BUT through PA agric
    business organizations
  • Outgrower schemes cotton and paprika
  • Key issues
  • Maize poor marketing arrangements, untimely and
    inadequate input supply, low prices, private
    traders
  • Cotton outgrower scheme sponsored
  • Main source of income

31
Contd
  • Alternative to maize
  • Outgrower scheme managers determine input and
    output prices
  • Contracts are designed by scheme owners and are
    unclear
  • Prices are usually low
  • Quality determination is not clear and any
    losses are transferred to farmers

32
Recommendations
  • Government must
  • Provide complementary services infrastructure,
    research warehouses support services necessary
    for private sector
  • Reduce policy confusion maize marketing
  • Trade facilitation infrastructure and regional
    and MT negotiations
  • Facilitate code of conduct in outgrower schemes
  • Promote emergence of farmer organization to
    encourage coordinated approach to export
    promotion
  • Must be timely in providing inputs, purchases etc
  • Donor coordination
  • Government must reduce unnecessary intervention
    and reprioritse its expenditure on agriculture

33
cont
  • Land policies must be improved upon
  • Recommendations to scheme owners
  • Provide a transparent production and marketing
    chain
  • Loan recovery must well explained through
    unbiased contracting methods, risks etc must be
    equally taken
  • Civil Society organisations
  • research and information dissemination network to
    all stakeholders in the various provinces
  • Encourage the Zambian Government to promote
    infrastructure for agricultural production and
    exports

34
Contd
  • Lobby government and donors for more resources to
    be invested in the most binding constraints in
    agricultural
  • Sponsor Produce association targeting small scale
    farmers
  • Buy food aid from the regional
  • Coordinate closely in programme sponsorship.

35
Thank you for listening
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