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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

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Agricultural productivity rural livelihood and trade in agriculture l.jpg

Agricultural Productivity Rural Livelihood and Trade in Agriculture

Presented to the



Outline l.jpg


  • Introduction

  • Agriculture policy and structure

  • Contribution of agriculture to economy

  • Agriculture productivity

  • Poverty and agriculture

  • Agriculture and trade facilitation

Introduction l.jpg


  • 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: -

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  • 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

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  • 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.

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  • 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

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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

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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%

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Key players

  • Policy making –preserve of MACO & Livestock development


  • 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

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  • 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

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  • 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

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Contribution to export earnings

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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

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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

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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.

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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

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  • 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.

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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.

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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.

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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

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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

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  • 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

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Trade corridors


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  • 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

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  • 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

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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

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  • 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

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  • 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

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  • 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

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  • 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

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  • 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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Thank you for listening

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