agricultural productivity rural livelihood and trade in agriculture
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Agricultural Productivity Rural Livelihood and Trade in Agriculture. Presented to the NRG FEATS PROJECT. Outline . Introduction Agriculture policy and structure Contribution of agriculture to economy Agriculture productivity Poverty and agriculture Agriculture and trade facilitation .

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agricultural productivity rural livelihood and trade in agriculture

Agricultural Productivity Rural Livelihood and Trade in Agriculture

Presented to the

NRG

FEATS PROJECT

outline
Outline
  • Introduction
  • Agriculture policy and structure
  • Contribution of agriculture to economy
  • Agriculture productivity
  • Poverty and agriculture
  • Agriculture and trade facilitation
introduction
Introduction
  • Economy registered positive growth since 2001
  • Macroeconomic indicators stablising
  • GDP per capita US$ 355 (2002) US$625 (2005) US$ 1183 (2008)
  • Poverty still high 64% poor PLUS ranked 165 out of 177 countries on the UNDP’s HDI
  • Poverty 80% in rural areas 34$ urban
  • Threatens country’s ability to achieve MDGs
  • Government efforts: -
cont d
Cont’d
  • 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
objectives
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.
methodology
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
key changes
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
agricultural policy
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 sector’s growth to 10% after 2006 and increasing its contribution to GDP from 18-20% to 25%
key players
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
contribution
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
contd
contd
  • Rice deficits, wheat oscillates
  • Forex – from US$207 Mn (2001) to US$476Mn.
    • 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 J–makes 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
key exports
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
agricultural productivity
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
livestock productivity
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.
factors affecting productivity
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
cont d20
Cont’d
  • 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.
livestock productivity21
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.
poverty and agric trade
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.
regional arrangements
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
trade facilitation
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
cont d25
Cont’d
  • 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
cont d27
Cont’d
  • 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
cont d28
Cont’d
  • 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
export barriers
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
case study
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
cont d31
Cont’d
  • 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
recommendations
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
slide33
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
cont d34
Cont’d
  • 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.
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