briefing on zambian agriculture
TRANSCRIPT
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Indaba Agricultural Policy Research Institute INDABA AGRICULTURAL POLICY RESEARCH INSTITUTE
By Nicholas J Sitko
World Food Programme Executive Director briefing Intercontinental hotel
Lusaka, Zambia
January 14th 2016
BRIEFING ON ZAMBIAN AGRICULTURE
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Indaba Agricultural Policy Research Institute
• Land locked • Borders 8 countries
• Land mass: 743 million hectares • 2.8 million cultivated by
smallholders • Most of the country well-suited
for crop production • Population: 15 million
• 59% rural • 1.5 million smallholder
households
Country Overview 1
Population distribution in Zambia
Source: Generated from Afripop
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Economic performance: The aggregate picture
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Sustained high GDP growth ~6% per year Headcount poverty rate Declined from 73% in 1998 to 61% in 2010 Reclassified as low middle income
Source: World Bank Data
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Agricultural Performance: The aggregate picture
Sustained surplus maize production Marketable surplus avg. ~1.5
million tons since 2010 Only African country self-
sufficient in wheat Erratic growth pattern Generally high since 2010
Declining contribution to GDP Consistent with economic
transformation Public expenditure on ag high
and growing
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Source: World Bank Data
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Digging Deeper: The paradox of Zambian agriculture
4
% R
ural
Pov
erty
Year
Despite positive develops Rural poverty
virtually unchanged Rural people
disproportionately experience poor nutritional outcomes
Source: Living Conditions Monitoring Survey various years
Source: Living Conditions Monitoring Survey various years, RALS 2012
wasting
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Land size and land constraints 5
• Approximately 70% of Zambian farmers own 2 hectares of land or less
• 58% of smallholder HHs indicate there is no land available in their villages
• Primary reasons: • Geographic clustering of
populations • Alienation of large tracks of
land • Labor constraints
Source: RALS 2012
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Market concentration 6
Smallholder maize market position
2-5% of households account for 50% of marketed surplus Market participation closely linked to cropped area and household assets • ~3% of smallholders cultivate 5
hectares or more Source: RALS 2012
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Public Expenditure 7
Public spending on agricultural has grown steadily in nominal terms since 2010 • Not keeping pace with
total spending • Budget allocations
mostly lower than CAAPD goal
Over 50% of budget on maize input and output subsidies
• FRA and FISP
Ag budget composition 2015
Ag budget trends 2001-2015
Personnel Emoluments
10% Operational Funds
8%
FRA (Maize Marketing)
23% FISP (Maize Production)
31%
Agricultural Development
Programs 15%
Others 13%
Source: Kuteya et al 2015
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Distribution of public expenditure 8
Total area cultivated (maize + all other crops)
Number of farms % of farms
% of farmers receiving FISP
fertilizer
kg of FISP fertilizer
received per farm household
% of Total FISP
fertilizer received
% of farmers expecting to
sell maize
Expected maize sales
(kg/farm household)
(A)
(B) (C) (D) (E) (F) (G)
0-0.99 ha 596,334 39.6% 14.3% 24.1 12% 22.2 135
1-1.99 ha 499,026 33.1% 30.6% 69.3 30% 47.7 609
2-4.99 ha 354,116 23.5% 45.1% 139.7 43% 64.0 1,729
5-9.99 ha 49,410 3.3% 58.5% 309.7 13% 82.1 6,613
10-20 ha 6,999 0.5% 52.6% 345.6 2% 86.8 15,144
Total 1,505,885 100% 28.6% 77.1 100 42.7 950
Source: RALS 2012
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Limited diversification 9
Percent households by number of crops grown Zambia, 2011
Source: 2012 CSO/MAL/IAPRI Rural Agricultural Livelihoods Survey
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Low Yields 10
-
0.50
1.00
1.50
2.00
2.50
Maize Sunflower Groundnuts Soya beans Mixed beans
Yield Comparison Zambia and LDCs
Zambia avg. yield
LDC yield avg.
• Avg. yields remain below Least Developed Country Averages
• Yields are increasing, but at a marginal rate
• Mostly the result of good weather conditions
Source: Crop Forecast Survey, FAOSTAT
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Input use 11
Fertilizer use on maize
Improved seed use rates
First generation (F1) hybrid
Maize 54.8 Sunflower 28.9 Groundnuts 17.9 Soyabeans 12.9
Source: RALS 2012
Source: Crop Forecast Survey, various years
• Improved input use for maize has increased substantially since 2000
• Driven by large subsidy program
• Improved seed use for non-maize crops remains low
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Cell Technology Use and Access 12
Yes No Obtain information about farm produce prices
15.8% 84.2%
Locate buyers for your farm products 17.6% 82.4%
Assist in running your own non-farm business
20.4% 79.6%
Send or receive money 12.0% 88.0%
Do phone banking 2.9% 97.1% Get extension information 5.0% 95.0%
Get weather predictions .7% 99.3%
Talk to family and other general communication
100.0% 0.0%
Cellphone functions and internet - calculations, etc.
100.0% 0.0%
2012 2015 Changes in cell phone ownership in rural Zambia 53% 60%
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Economic headwinds
Growing fiscal deficit Much of it from domestic credit markets
Treasury bill yields on 182 day bills increased from a low of 2.6 to 17.5 %
Rapid devaluation of the kwacha Since August has lost more than 75% of its value relative to the
dollar Massive electricity shortage Minimum of 8 hours of power outage per day
Rapid inflationary pressure Below 8% in August, as of December 21.1%
Presidential elections slated for August 2016
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Conclusion
How can we achieve transformational change?: 1. Strategies to contend with geographic dispersed, thinly traded markets
- Effective aggregation - Investments in hard and soft infrastructure
2. Get technologies and information into farmers’ hand - Last mile solutions - Leveraging HH investments in cell phone technology
3. Manage risks: - Price, weather, default, exchange rate, and policy
4. Policy environment - Need predictability - Level playing field to engage the poor
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Thank You 15