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Zambia 's agricultural sector has the potential to spearhead the country's growth. The leading role of agriculture has been emphasised by formal acknowledgement through a sound agricultural policy. The agricultural policy aims at increasing private sector participation in production, processing and marketing of agriculture products and commodities with minimal government interference. To achieve this, government is facilitating the establishment and expansion of land, development of infrastructure, finance, investment and marketing all of which will support the growth and development of Zambia 's agricultural sector.
AGRICULTURE FACTS ON ZAMBIA
Area: 752 614 km2
Mean Altitude: 1200m above sea level
Surface water: Zambia has 25% of the Southern African's regional surface water potential.
Climate: Tropical with clearly separated dry and rainy seasons.
Average annual rainfall: 1,000mm
Land use distribution
Arable land – 47%
Forests - 9%
National parks, Game Management Areas - 30%
Hills, Escarpments, Swamps - 12%
Urban Development - 2%
Vegetation: Savannah and other woodlands type mainly found on plateau.
Energy: 4 major hydro power stations and various smaller power stations.
INVESTMENT OPPORTUNITIES
A large proportion of the country's arable land remains idle therefore offering great investment opportunities in agriculture. The country's soils and climate are suitable for growing various types of food crops and high value export crops.
Among the most rewarding areas of investment in the sector are: -
Primary Agricultural Commodities
Tobacco Zambia has excellent soils and climate that are highly suited for intensive cultivation of tobacco. Production of tobacco countrywide especially in the dryer Southern region can be increased threefold.
Cotton
The country has the ability to increase its export earnings by raising cotton exports through increased output.
Coffee
Zambian coffee has unique quality that is highly demanded by expert master brewers worldwide. However, current production levels are by far below corresponding demand.
Floriculture/Horticulture
Opportunities exist to increase output of fresh flowers, fresh beans, snow peas, mushrooms, citric fruits and other fruit, flower and fresh vegetables.
Livestock Products
Poultry, fisheries, animal products Zambia 's abundant land and freshwater resources offer great opportunities for investments in livestock products. In addition, these products are highly demanded locally as well as regionally.
AGRICUTURE INCENTIVES
Coporate Tax
Income received from farming – 15%
Export on Non Traditional items – 15%
Farming Tax Allowances
Wear and tear allowance (only on assets directly used in farming) - 50%
Capital recovery is restricted to the allowance given.
Farm improvement allowances - 100%
Farm work allowance of 100% for expenditure on farm land such as stumping, clearing prevention of soil erosion, boreholes, wells, water conservation and aerial or geophysical surveys;
Farm dwelling allowance - ZK10 million
Capital expenditure allowance on the growing of coffee, tea , bananas, citrus fruits or similar plants qualifies for a development allowance of 10% per year up to the first year of production;
Income Tax on Dividend from Farming
Income received by way of dividend declared from farming shall be exempt from tax for the first 5 years of operations.
Customs Duty
Customs duty exemptions on some capital machinery and equipment used exclusively for agriculture;
Reduced duty on /duty free imports of certain raw materials.
Value Added Tax (VAT)
Unprocessed agricultural goods are VAT exempted.
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