Agro Diversification Beneficial for Zambia’s Economic Growth

Zambia is a country endowed with vast stretches of land suitable for massive agriculture. If the land is harnessed well for agriculture and agro-processing, Zambia can be a hub of agro products in the Southern Africa Development Community (SADC).

Since the year 2001 successive governments have embarked on improving access to inputs and finance for small scale farmers as a way of diversifying the economy from heavy reliance on copper production and exports.

In most parts of the country, especially among the rural and peri-urban populations, agriculture is already the major source of livelihood and income. Government is aware of the vast opportunities in the agriculture sector and is putting a lot of emphasis on a diversified and competitive agriculture sector.

This is evident from the 2017 national budget where government revealed that in order to ensure greater economic stability and growth, the country needs to develop a sustainable, diversified and competitive agriculture sector.

From the 1990s, Zambia’s crop production has been biased towards maize the country’s staple food which accounted for over 60% of total agricultural production.

Currently, the main producers of maize are small scale farmers which exposes production to weather related risks in case of drought.

It is for this reason that government has committed to promote diversification to cash crops such as cotton, cashew nuts, soya beans, cassava and rice in the 2017 national budget.

In mitigating the effects of climate change, government is continuing with the construction of multi-purpose dams and promotion of irrigation schemes.

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This year, government is scheduled to set up 20 irrigation schemes while scaling-up the sustainable utilisation of wetlands. In addition, irrigation projects will be undertaken using the Public Private Partnerships model, particularly in farm blocks.

Government is also aware that policy consistency is important in the agricultural sector as it facilitates stability and predictable access to wider markets.

Consequently, policies such as export bans and setting of prices above market rates have the effect of generating uncertainty that in turn negatively affects production. In this regard, government will refrain from using these instruments to regulate agricultural markets in redressing the situation.

In the livestock sector, Government is continuing with the construction of 18 artificial insemination centres this year. With regard to fisheries, Government is scheduled to complete the construction of fingerling centres in Rufunsa, Mungwi, Kasempa and Chipepo. To enhance productivity, government challenges the private sector to participate in the establishment of fish feed plants, freezing facilities and hatcheries.

A recent analysis by the Indaba Agriculture Policy Research Institute (IAPRI) on maize outlook and regional analysis for the period 2016/2017 resonates with government’s aspirations and commitments.

The Institute notes that maize has the potential to boost Zambia’s export revenue especially at the time when the country is struggling from the reduced export revenues due to the unstable copper prices.

In 2015, Zambia earned $210 Million from the export of maize and related products. Zambia has the potential to increase its maize exports without undermining its own food security.

In their report, IAPRI states that Zambia will this year produce enough maize to meet its domestic requirements while exporting the surplus. The agricultural think tank anticipates growth in production will mainly be driven by yield increase rather than the growth in the planted area.

In addition, under the assumption of weather patterns, maize productivity is expected to increase as a result of adopting improved technologies by farmers such as the use of improved seeds and fertilizers.

Further, A La Nina event may result in generally above normal rainfall in Zambia and neighboring countries. This implies that the regional maize supplies will improve and if the export situation is not managed well, Zambia may find itself sitting on very expensive stocks which traders will not be able to buy from farmers.

As a result, prudent decisions need to be taken to facilitate a balance between domestic needs and exports, and to incentivize farmers to grow more next season and to encourage private traders, millers and other market players to invest more in the sector.

The report foresees continued high demand for Zambia’s maize into the next maize harvest of 2017. In terms of regional demand, the most attractive markets for Zambia are Zimbabwe and Malawi.

However, export restrictions imposed on the 2016 harvest may entail that Zambia may miss the opportunity to utilise its potential to maximize earnings from maize sales, as regional demand is likely to be satisfied by imports from markets such as Mexico, Brazil and the USA.

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