Agricultural Policies and Food Security Challenges in Zambia Auckland Kuteya Presentation at the Africa Lead Champions for Change Leadership Training, Protea Hotel, Chisamba, Zambia 16-20 th April, 2012 INDABA AGRICULTURAL POLICY RESEARCH INSTITUTE
Presentation Outline 1 Goals for Zambia s development initiatives Fundamental engines of agricultural growth Overview of the agricultural sector in Zambia Zambia s agricultural policy challenges Composition of national budget on agriculture Way forward on agricultural policies
Goals for Zambia s Development Initiatives: 2 SNDP/Zambian CAADP/MDG Reduce poverty through broad-based income growth for those in agricultural sector Attain 90% household food security and cut hunger by 50% by 2015 Grow the agriculture sector from 1% to 7-10% per year Increase agric contribution to GDP from 18-20% to 25% Increase agriculture contribution to foreign currency earning from 3-5% to 10-20% Implement the Zambia CAADP Investment Plan
3 Fundamental Engines of Agricultural Growth Research, technology and extension for both crops and livestock Soil fertility management & enhancements Animal disease control & animal nutrition improvements Irrigation to reduce uncertainty & raise input response Reliable & competitive Markets Strategic infrastructure development to keep production costs down
Overview of Zambia s Agricultural Sector 4 Rapid population growth 13 million (64% rural) in 2010 Agriculture employs above 70% of the rural population By 2009 Agriculture s contribution to GDP was 12.6% About 82% smallholders grow rain-fed maize Poverty levels (80%) still stubbornly high in rural areas Income inequality in urban areas Stagnant agricultural productivity (yields)
% of Crop Area Harvested to Planted Agricultural Policy Challenges 5 Smallholders highly vulnerable to weather shocks 100 90 80 70 60 50 40 30 20 10 0 Maize Groundnuts Cassava Sweet potatoes Sources: MAL/CSO Crop Forecast Surveys, 2000/01-2010/11
% of farms cultivated Land constraints among smallholder farmers 6 45 40 35 30 25 20 15 10 5 0 39.6 33.1 23.5 3.3 0.5 0-0.99 ha 1-1.99 ha 2-4.99 ha 5-9.99 ha > 10 ha Source: CSO Crop Forecast Survey, 2011
Low agricultural productivity levels (Mt/ha) 7 Crop 2001/02 2003/04 2005/06 2007/08 2009/10 Global Maize 1.0 1.7 1.5 1.3 2.1 4.47 G/nuts 0.4 0.7 0.5 0.6 0.7 1.35 Millet 0.7 1.0 0.7 1.0 1.1 0.82 Sorghum 0.7 0.7 0.5 0.5 0.9 2.66 Rice 1.0 1.0 1.3 1.2 1.7 3.84 Sources: MAL/CSO Crop Forecast Surveys, 2000/01-2010/11 while global averages from COMESA
% Farmers Receiving FISP Fertilizer FISP fertilizer received per farm household, 2010/11 8 70 60 50 40 30 20 10 0 58.5 52.6 45.1 30.6 14.3 0-0.99 1-1.99 2-4.99 5-9.99 10-20 Total Area Cultivated in Ha (maize + other crops)
% under poverty line Rural headcount poverty rates in Zambia 90 80 70 60 50 40 30 20 10 0 1998 2004 2006 2010 traditional 83 77.3 76.8 78 new 0 0 0 73
10 National Production per Agricultural Household (Metric Tonnes) Crop 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 Trend Maize 0.98 0.99 0.93 1.14 1.66 1.85 G/nuts 0.05 0.05 0.07 0.08 0.11 0.09 Cassava 2.14 1.98 1.10 1.39 1.33 1.15 M/Beans 0.02 0.02 0.04 0.03 0.04 0.03 Millet 0.03 0.02 0.03 0.03 0.03 0.03 Sorghum 0.01 0.01 0.01 0.01 0.02 0.01 S/Potato 0.08 0.07 0.09 0.14 0.17 0.10 Rice 0.01 0.02 0.02 0.03 0.03 0.03
Nearly 50% of rural HHs are net buyers of maize 11 Buyers only, 45% Sellers only, 18.6% Neither Buy nor sell, 22.9% Buy and sell (net buyers), 4.1% Buy and Sell (net sellers), 8.9%
Highly concentrated patterns of maize surplus generation, 2011 12 N= Farm size (ha) Ha farmed Gross rev., maize sales Gross rev., crop sales (ha) (million kw) (million kw) Top 50% of maize sales 78,384 4.3 3.0 8.1 8.6 (5.2%) Rest of maize sellers 499,530 3.4 2.0 1.3 1.7 (33.2%) Households not selling maize 927,971 2.2 1.2 0 0.2 (61.6%) Source: CSO Crop Forecast Survey, 2011
Who benefits from higher market prices? 13 Smallholder maize market position Large-scale farmers Not directly affected Do not buy or sell maize 23% Maize net sellers 28% Maize net buyers 49% Harmed Helped Urban consumers Source: 2008 CSO/MACO/FSRP Supplemental Survey
Allocation of Public Budget to Agriculture, 2012 14 Arrears 0.3% PRP (All Other) 1.4% Ag Show 0.4% Capital Expenditure 5.6% Ag Dev Programs 21.6% Poverty Reduction Program (FRA) 18.4% PE 12.6% RDC 8.5% Poverty Reduction Program (FISP) 30.6% Grants 0.7%
% Share of Agriculture to GRZ Budget 15 Agriculture s Share of Zambian National Budget 2000-2012 14 Includes supplemental funding of K1,449 Billion mostly to FRA and FISP 12 10 CAADP Target 8 6 4 2 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Allocation Year 0.2% drop if we ignore supplemental funding to FRA and FISP in 2011 Actual (2011 - only up to Oct)
Other Policy Challenges 16 Most of the key agricultural growth drivers (e.g., R&D, feeder roads) are still under funded FISP distribution has not been targeted in a way consistent with poverty reduction goals Public expenditures on FRA largely captured by relatively large farmers Maize-centric policies through FRA and FISP discourage crop diversification FRA s above market prices crowds out and stifle private sector investment & market participation
Way forward 17 Review FRA s roles to concentrate on strategic reserves Use flexible FISP (E-voucher) to cover other farm inputs Need increased commitment to invest in key drivers (R&D, extension) of agricultural growth Enact the Agricultural Marketing Act Create a conducive environment for the private sector investment and participation Ensure predictable, rules-based market and agricultural trade policies esp. from government
Thank You 18 Any Questions?