The Zambia Agriculture Policy, Plans and Budget
Christopher Mbewe, Lusaka
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Key Points
1.
This policy brief is a desk
study based on literature review from various government documents and research
findings from prominent research institutions and individuals.
2.
The Zambian agricultural sector
is guided by the Second National Agricultural Policy (SNAP) whose implementation
is in line with other national policy documents such as Vision 2030, and the
NAIP.
3.
Despite recording strong
economic growth and attaining a middle income status, 54.4% of the Zambian
population is still living below the poverty line with nearly 800,000 people
who are food insecure.
4. The public funding to the agricultural sector during the 2017
budget has increased to 9.4% of the total national budget. However, the bulk
of it goes towards the support of the FISP and FRA. There is therefore, need
to increase funding to other programmes such as extension services, R&D,
and agriculture infrastructure that can accelerate growth and reduce rural
poverty. Further, to achieve the desired aspirations, releases to government
agricultural Programmes must be improved whilst an effective monitoring
mechanism is put in place.
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1.0
INTRODUCTION
Zambia has an estimated
population of 15.5 million people of which 58.2% is concentrated in rural areas
compared to 41.8% in urban (CSO, 2016). From independence to date, the country’s
economy has been dependent on mining, in particular copper. This is despite copper’s unreliability arising
from the ever fluctuating prices at the international markets. In addition,
copper just like any other mineral is a waste asset.
The immense natural
resource endowment in terms of land, water, climate and labour gives Zambia
high potential to expand agricultural production and productivity, thereby
contributing to poverty reduction, job creation and economic growth. Further,
recent food deficits in the SADC region have created a demand for food products
from countries with food surpluses thereby making the country a favourable
destiny for agricultural investment.
The current Government has
identified agriculture as a key driver to economic diversification. In his
opening address at the 12th National Assembly, September, 2016, His
Excellency the President of the Republic of Zambia Edgar Chagwa Lungu stated the
country’s vision as one based on agriculture namely: “To move the economy from
its current heavy dependence on copper, to one based on agriculture, livestock
and fisheries and their entire value chain”. To realize this Vision, Government
should be seen to take the reading role in financing the sector and creating a
favourable environment for full participation of stakeholders.
This policy brief critically
looks at the existing agricultural policies, plans and programmes in the
agricultural sector and the involvement of the small scale farmers in their
formulation. In addition, an overview is given on the budget towards the
agricultural sector in achieving the Malabo goals. It also looks at government’s commitment in
terms of investing in the sector in order to realize it vision. Information was
collected from various policy documents and plans within and outside the
agricultural sector. Research findings and other literature were also used.
2.0 EXISTING POLICIES, PLANS AND PROGRAMMES
The agricultural sector is
guided by an umbrella policy document named “The Second National Agricultural
Policy (SNAP), 2016. It is accompanied by an Implementation Plan
2016-2020. The main thrust of the Policy
is to enhance crop, fisheries and livestock production and productivity. The
Policy also provides great scope for attaining a sustainable food and nutrition
security particularly at national level and contributing significantly to
profitability to agricultural enterprises, job creation, increased income
generation, poverty reduction as well as increased contribution of the
agriculture to Gross Domestic Product (GDP). The Policy contains
measures/strategies aimed at addressing the numerous challenges affecting the
sector such as low production and productivity, climate change, and low value
addition, among others.
The implementation of this
Policy is in line with others national documents such as the Vision 2030, the
Seventh National Development Plan (work in progress) National Agricultural
Investment Plan (NAIP) under the Comprehensive Africa Agriculture Development
Programme (CAADP) framework. The NAIP 2014-2018 is the major plan guiding the
implementation of agricultural programmes in Zambia by key stakeholders.
In
order to achieve the various policy objectives and meet the national goals, a number
of programmes and projects are being implemented different stakeholders in the
sector. Notable programmes include:
2.1 Farmer Input Support Programme
(FISP)- This is a national wide programme which started in
2002/2003 farming season. The overall objective of the Programme is to improve
the supply and delivery of agricultural inputs to small-scale farmers through
sustainable private sector participation at affordable cost, in order to
increase household food security and incomes. Farming inputs to support crop,
fisheries and livestock production are given to small scale farmers belonging
to farmers’ groups or cooperatives at subsidised prices. Currently there are two delivery mechanisms or
systems being implemented under FISP namely: (i) Conventional; and (ii)
E-voucher system. The Conventional FISP
is promoting crop diversification by supporting the production of maize, rice,
sorghum, groundnuts, cotton, soybeans, sunflower, beans and orange maize. The
e-voucher system gives a voucher of a specified value (K1,700 0r USD170, for
2016/2017 farming season) which enables farmers get farming inputs of their
choice for crop, fisheries and livestock production. The 2017 budget has set
about USD 285.64million budget to finance the FISP Programme. During the 2016/2017 farming season, more than
1,600,000 small scale farmers (1,000,000 Conventional FiSP and 602, 521
e-voucher system) will benefit from the Programme (MoA, 2016). Government’s
plan is to fully migrate to the e-voucher system starting 2017/2018 farming
season.
2.2 Livestock development- The
Government has embarked on the agricultural diversification programme which
includes the promotion of livestock production especially small ruminants. One area of intervention is to improve the
breeding stocks. In the 2017 budget, USD 1.0million has been budgeted for the
establishment of a Nitrogen Liquid Plant in order minimize the cost of
importing liquid nitrogen used for the storage of semen for artificial
insemination. This intervention is in addition to other measures such as
breeding centres, milk collection centres and livestock service centres established
across the country.
The
2017 also contain a total budget of USD 4.16million for animal disease control.
The funds include the construction of dip tanks, vaccine production and
procurement, and construction of a codon line to prevent trans-boundary
diseases.
These
measures are expected to improve production and productivity among small scale
farmers.
2.3 The Agricultural Productivity Programme for Southern Africa (APPSA)- Zambia is among the three (3) Southern
African countries (others being Malawi and Mozambique) that have benefited from the USD29.8
Million World Bank Loan to establish a
Centre of Leadership (CoL) in Legumes. The five (5) year (2013-2017) programme
aims at technology development and dissemination principally in legume crops.
The Programme has also contributed to crop diversification by attaching
importance to the legumes.
2.4 Irrigation
Development Programme: In
order to mitigate crop failure that arises due to dependency on rain-fed
agriculture and increase the resilience of the agricultural sector while
offering farmers the opportunity to grow a variety of crops throughout the
year, the government has embarked on massive irrigation development projects
and programmes throughout the country. In collaboration with development
partners, Government intends to develop 17,500 hectares of land for irrigation
by 2018. This will is being carried out through the five (5) projects namely; Small
Scale Irrigation Project (SIP), Irrigation
Development Support Project (IDSP), Agriculture Productivity and Market
Enhancement Project (APMEP), Finish Government Expanded Sip and JICA-COBSI-T
Project. The major crops under irrigation include sugarcane, wheat, rice,
maize, soybeans, citrus fruits, coffee, bananas, vegetables and tobacco
nurseries.
In the 2017 budget, the Government intends to
set up 20 irrigation schemes, while scaling up the sustainable utilization of
wetlands. Further, irrigation projects will continue using the Public Private
Partnership models, particularly in farm blocks.
2.5 Aquaculture Development
Programmes- Zambia has a fish deficit of
35,000mt.This is largely due to the population increase and the depletion of
fish stocks from the natural water bodies. In order to offset this deficit, the
Government is promoting aquaculture or fish farming. The 2017 budget will
enable the construction of four (4) fingerling centres in Rufunsa, Mungwi,
Kasempa and Chipepo. In addition government will train farmers in fish feed
production. One private company has
already established a fish feed manufacturing plant in Siavonga District and is
expected to be fully fledged before the end of the first quarter of 2017. The
Government has also introduced fiscal incentives to encourage the private
establish fish feed plants, freezing facilities and hatcheries. Furthermore, an
equivalent of USD 250,000 has been budgeted as Fisheries Development Fund.
2.6 Food Security Pack Programme
The
Government has been implementing a social protection programme called the Food
Security Pack. The Programme is targeted at the vulnerable person like the
aged, differently abled, orphans, child headed households, among others. The
beneficiaries are given a Pack for agricultural
production in order to alleviate hunger and poverty among vulnerable but viable
farmers. In the 2017, the Government will scale-up the Programme from 30,000 to
40,000 beneficiaries.
3.0 VISION AND MISSION OF THE AGRICULTURAL SECTOR
The Vision of the
Agricultural sector is an “efficient, completive and sustainable agricultural
sector, which assures food and nutrition security, increased employment
opportunities and incomes (SNAP, 2016).This vision is in line with the theme of
the NAIP which is “Towards Diversification and Job Creation in the Agriculture
Sector.
The NAIP runs for a period
of five (5) years from 2014 to 2018. The
strategic direction of the NAIP are: (a) Sustainable natural resources management; (b) Agricultural
production and productivity improvement; (c) Market access and services
development; (d) Food and nutrition security and disaster risk management; (e) Key
support services; and (f) Cross-cutting
issues.
4.0 UPDATES IN ACHIEVING THE MALABO GOALS
At the 23rd
ordinary session of the African Union Assembly held in Malabo, Equatorial
Guinea in 2014, the Heads of States recommitted to the CAADP principles and
goals and defined a set of targets and goals referred to as the “Accelerated
Agricultural Growth and Transformation Goals 2025”. The Declaration in
particular outlined seven commitments that are geared towards fostering
agricultural growth and transformation. To
date, this how far Zambia gone in meeting Goals/ Commitments 1,2,3,4 and 7:
4.1 Goal 1: Recommitment to the Principles and Values of the
CAADP Process
Agriculture’s contribution
to GDP in 2015 was 8.1%. Livestock’s
contribution to the agriculture GDP is 30%. Agriculture employs close to 53%
(approx. 2.9 Million) of the total Zambian labour force (CSO, 2016). There are about 1.5million farmers in
Zambia. According to the Ministry of
Agriculture, the Extension Worker to Farmer ratio is 1:900. This ratio does not take into account the
extension staff involved in livestock and fisheries extension delivery system. The agricultural sector lacks a reliable data
of farmers and farmland. This affects the delivery of agricultural programmes
and services by the ministries responsible for agriculture and other government
agencies thereby resulting inefficient and ineffective service delivery.
Attempts were made to develop a Farmer Register that would assist in the
collection and storage of farmers’ data. However, these efforts have been
hampered by numerous factors.
4.2 Goal 2: Recommitment to enhance investment finance in
Agriculture
The public budgetary
allocation towards the agriculture is still below the 10% minimum recommended
by the Malabo target. Since the launch
of the NAIP in 2013, there has been a general increase in the budgetary
allocation towards the agriculture sector as shown in Figure 1 below.
Figure 1Budget Allocation to the Agriculture for
2012 -2017
Source: IAPRI, 2017
Although the 2017
budgetary allocation appears impressive (9.4%), 70% of the budget for the
Ministry of Agriculture (MoA) is allocated towards crop purchase under FRA and
input procurement and distribution under the FISP programme. This means that
R&D and extension has to share within the remaining 30%.
Figure 2 Proportion of Agricultural
Budgetary Allocation towards R&D
Source: IAPRI, 2015
4.3 Goals 3 &4: Poverty and hunger levels in the country
Despite registering strong
economic growth and its status as a lower middle-income economy, poverty has
remained a major challenge in Zambia. The
high birth rate, a relatively high HIV/AIDS burden, and market-distorting
agricultural policies have done much to exacerbate the problem. The proportion of the population living below
the poverty line is 54.4%. Rural poverty is at 76.6% compared 23.4% in urban
area. Among the poor, 40.8% of the population are extremely poor while 13.6%
are moderately poor (CSO, 2016).
Although Zambia has been
recording maize bumper in the recent years, a large proportion is still food
insecure. During the 2015/2016 farming season, 798,948 people were food
insecure, a 127% increase over 2014/2015 which was 351,267 (SADC), 2015). In the 2017, Government will continue buying
grain foe strategic reserve through FRA. To this effect, USD 94.25 million has
been put into the budget. At national level, stunting for children 5 is at
48.6% while underweight is in the medium range at 13.3%. Wasting is at 6.6% (CSO,
2016).
4.4 Goal 7: Commitment to Mutual Accountability to Actions
and Results
The last joint sector
review was conducted in 2014 in collaboration with a consultant. The results are however, not yet made available
to the public.
5.0 THE IMPACT OF TAXES AND CESS TO SMALLHOLDER FARMERS
In the 2017 national
budget, the Minister of Finance announced tax incentives meant at growing the
agriculture sector. The following are the tax incentives announced:
5.1 Capital Allowances Rate on Plant, Equipment and Machinery
Used in Farming and Agro-processing Increased from 50% in 2016 to 100% in 2017 – This incentive may not directly benefit
smallholders since most of them are not yet mechanised and do not keep farm records
to help them make the claims to their equipment
and machinery. As a result, this measure may only benefit large commercial
farmers.
5.2 Fittings for
Irrigation – 25% Customs Duty to be Waived- Most smallholder farmers are
not importers of irrigation fittings. Their benefits could arise from the price
reduction of the irrigation fittings by the traders, if market forces are
allowed to dictate prices.
5.3 Fish Seed and Fish Feed Exempt for VAT Purposes- Most individual smallholder farmers are not VAT registered
therefore, cannot claim it. They can however, benefit if they below to a
cooperative that is VAT registered.
5.4 Aquaculture Implements –
Customs Duty to be Suspended for a Period of Three Years- The suspension of this duty is expected to
lower aquaculture implements thereby making them more accessible and affordable
to the smallholders.
In order to promote value addition, the Government
proposed to introduce an export duty on maize at the rate of 10 percent. The
Government also increased duty on semi-processed edible oils from 5% to 15%.
6.0 THE ROLE OF CONTROLLER
AND AUDITOR GENERAL (CAG) AND AGRICULTURE PARLIAMENTARY COMMITTEES ON PLANS,
BUDGET AND IMPLEMENTATION OF THE SECTOR OVERSIGHT
The Zambian budget is presented to the National
Assembly by the Minister of Finance for approval by the law makers. Each budget
line from respective ministries is debated by the parliamentarians before the
entire budget is finally approved or disapproved. However, in a parliament that is dominated by
members from the running party, the purpose of the budget debates become
irrelevant as no single budget has been disapproved. However, the fact that the budget is debated
helps the responsible ministries become more cautious in their formulation for
fear of being embarrassed or exposed by the legislators from the opposition.
During its implementation, the budget is monitored by
the Parliamentary Committee on Agriculture which goes round the country
visiting various agricultural projects and later produce a report which is make
available to the entire Assembly. The controlling officer for the ministry
responsible for agriculture is summoned to answer quarries within a given time
period.
The office of the Auditor General (OG) audits accounts
of every government spending agent annually, including the ministry responsible
for agriculture. The audit report is presented to Parliament before being made
available to the public. The Committee
on Public Accounts (PAC) of the Parliament summons the Permanent Secretary
(Controlling Officer) and his officer to respond to audit quarries. This
meeting is broadcast live on the Parliament Radio for all members of the public
to follow. The erring officers are reprimanded and urged to remedy the problem
in future. There is however calls, especially from the Civil Society
Organizations (CSOs) that offenders should be prosecuted and once they are convicted
will serve as examples to future abusers of public resources.
7.0 POLICY FOCUS AND
RESOURCES TO SUPPORT AGRO ECOLOGICAL AGRICULTURE AND FOOD SOVEREIGNTY
Zambia is divided into three agro ecological regions
namely: (i) Region I; (ii) Region II; and (iv) Region III. Region I receives
less than 800mm of annual rainfall and suitable for the production of cotton,
sesame, sorghum, groundnuts, beans, sweet potatoes, cassava, rice and millet.
It is also suitable for extensive cattle production and fisheries
development. The valley part is not
suitable for cattle rearing because of tsetse fly infestation.
Region II receives between 800mm to 1,000mm of annual
rainfall. A variety of crops are grown which include maize, cotton, tobacco,
sunflower, soybeans, irrigated wheat, ground nuts and other arable crops. It is
also suitable for flowers, paprika and vegetable production. It is good for
beef, dairy, poultry and fisheries production.
Region III receives
between 1,000mm and 1,500mm of annual rainfall. It has potential for millet,
cassava, sorghum, beans, groundnuts, coffee, sugarcane and pineapple
production.
The Government is promoting
the production based on the agro-ecological suitability. For example a project
was launched to promote cashew nut production in Mongu District of Region IIb
where it is suitable. Aquaculture and irrigation is also concentrated in
Regions that are suitable.
8.0 RECOMMENDATION FOR SMALLHOLDERS TO EFFECTIVELY ENGAGE IN
PLANNING AND BUDGET PROCESSES AT NATIONAL AND DISTRICT LEVEL.
The Budget cycle or
implementation in Zambia begins in January and ends in December each year. The
Ministry of Finance work in close collaboration with the line ministries in
budget formulation. The Ministry responsible for agriculture starts the budget
preparation as early as the month of May.
The camp officers who are on the lowest level of the government
extension engage consult with farmers on their needs in terms of feeder roads,
dams, dip tanks and other infrastructure they want in their area. This
information is relayed to the district for consideration into the budget. The
district in turn takes the recommendations to the province which make a final
provincial budget containing activities and costs. The Ministry then calls all the provinces for
making the final budget which is submitted to the Ministry of Finance.
On the other hand, the
Ministry of Finance engages stakeholders on tax and non tax measures to be
included in the budget. The call for stakeholder participation is made as early
as July. This call appears in national newspapers and other mass media.
Stakeholders are requested to make their recommendations in any form workable.
And then later, the Ministry of Finance constitutes a committee from mainly
economic ministries such as Agriculture, Commerce, Mines and Energy to review
the submissions by the stakeholders. During this period, some stakeholders are
invited to make their submissions to the Committee. The Committee makes some
recommendations to the Cabinet for approval and other this is done the
recommendation is incorporated in the national budget.
The budget process by the
Ministries is guided by ‘Call Circular’ which spells out the national priority
areas. These priority areas are based on the National Development Plans which
are also formulation in a participatory manner. However, due to resource
constraints, the Ministry of Finance gives budget ‘Ceilings’ to each ministry
or spending agent who is turn align their programmes according to the resource
envelope.
9.0 CONCLUSION
Although there has been a
significant improvement in the national budgetary allocation towards the
agricultural sector, poverty levels have remained high. This is despite
government spending colossal amounts of resources to programmes such as FISP
and crop purchase through FRA. There is therefore need to for Government to
reflect on the implementation of the current interventions. More resources should be allocated to
programmes to support extension, R&D and infrastructure development. Further,
a conducive policy environment should be created to enable fully participation
of the private sector. For programmes like FISP which take huge proportion of
budget, there is need to improve on the targeting to benefit the intended
beneficiaries. Further, weaning mechanisms should be devised to avoid financing
the same farmers who do not grow.
The Government should also
implement an effective monitoring mechanism that would help track the results
especially those under the Malabo commitments. Currently, the private has shown
real commitment to tracking the results and indicators in the sector.
Finally, Government should
improve on the releases from the approved budgets. The 2015 analysis shows that
important programmes such as Livestock Development, Fisheries Development,
Research to Agriculture (crops and soils), Fisheries Research, and Veterinary
and Livestock Research had releases below 40%. Whilst releases to FISP, FRA and
Veterinary Services exceeded 100%.
References
1.
CSO, 2015. 2015 Living Conditions
Monitoring Survey Key Findings.
2.
GRZ, 2013. Zambia National
Agriculture Investment Plan (NAIP) 2014-2018
3.
GRZ, 2016- Second National
Agricultural Policy
4.
GRZ, 2016. 2017 Budget Address
5.
IAPRI, 2016. 2017 Agricultural
Sector Budget Analysis
6.
IAPRI, 2016. An In-depth
Analysis of Zambia's Agricultural Budget:Distributional Effects and Opportunity
Cost
7.
MoA, 2016. Electronic Voucher
Implementation Manual, 2016/2017 Agricultural Season
8.
MOA, 2016. Implementation Manual
2016/2017 Agricultural Season
9.
NEPAD, 2015. The CAADP Results
Framework 2015-2025.
10.
SADC, 2015. Regional Food
Security Update, July to September, 2015.
