BACKGROUND

In the past decade, the Government of the Republic of Zambia has redesigned agricultural policies to achieve market liberalization as part of the Structural Adjustment Programme (SAP).  Using the Agricultural Investment Programme (ASIP) as the agricultural policy framework, the government had allowed for gradual disengagement from direct involvement by the public sector in agricultural marketing and supply of inputs.  It had liberalised prices, removed direct subsidies, privatized agro-parastatals and liberalised trade in farm products, inputs and machinery.  Government had built on a background of market interventions and initiatives aimed at optimising agricultural outputs and markets for smallholder farmers.

The evolution of agricultural markets in Zambia can be traced to the time of Independence.  The Agricultural Rural Marketing Board (ARMB), the Grain Marketing Board  and   Producer   Marketing Cooperatives were introduced soon after independence as a way of bringing more rural people into mainstream markets.  The two boards were merged in the National Agriculture Marketing Board (NAMBOARD) in 1969 to become a sole marketing agent for maize and other designated crops and inputs.

Cooperatives continued to run alongside NAMBOARD until the latter was abolished in 1989, due to the unsustainable financial burden that it exerted on the government.  It gave way to Provincial Cooperative Unions, which later amalgamated into an apex organisation, the Zambia Cooperative Federation (ZCF), as the main marketing agent for agricultural produce.

Like NAMBOARD, ZCF’s grains and finance divisions collapsed due to financial unsustainability. Soon after the collapse of ZCF, government started allowing private sector initiatives in agricultural marketing.  This was officially sanctioned when the Agricultural Marketing Act was repealed and the Food Reserve Act enacted in 1995 leading to the formation of the Food Reserve Agency (FRA).

The FRA has equally not performed well.  It has faced financial unsustainability as well as mismanagement.  The FRA has unfortunately not achieved the objectives for which it was formed.  The new government administration (so-called New Deal), once again in a hurry to find a solution to the myriad of problems in the agricultural sector introduced the idea of a Crop Marketing Authority (CMA), which it started working out alongside the first-ever agricultural policy since Independence.  During the course of 2003, the CMA bill was sent out of Parliament to enable government to consult more widely and be more prepared.  After countrywide consultation and debate the government back-pedalled on the idea and decided to revamp and stay with the FRA.

SECTOR PROBLEMS

Despite the numerous government interventions, Zambia continues to be plagued by a host of seemingly intractable problems in the area of crop marketing.  Essential farm inputs such as fertilisers and empty grain bags are always delivered late to the farming community, and sometimes of the wrong variety.  Agricultural produce such as maize, beans, and groundnuts, which are grown mostly by small-scale farmers, usually lack a ready market.  But even when a market is found, unscrupulous private grain dealers offer sub-economic prices.  Also the dearth of agricultural lending institutions in the country has meant that the bulk of small-scale farmers do not have access to credit with which to improve their production output.

All the above-mentioned factors plus many more have made the agricultural sector to be one of the least-exploited sectors of our national economy.  This is so despite our country’s natural endowments like good soil, good rain and abundant lake and river water.  Among others, this malaise has manifested itself through persistent decline over the years of production levels.  The poor performance of the sector accounts, to a greater extent, for the increasing levels of poverty, especially in the rural areas.

LEARNING FROM THE PAST

It is reported that the pioneers of agriculture in this country at the beginning of the 20^th century did very well.  Records have it that these farmers started from the basic level of growing the same crops we grow today, maize, cotton, tobacco, etc.  The major difference, however, is that they used organic fertiliser and ploughed with oxen.  Yet good results were achieved.  It is reported that 50 years ago the average yield of maize was 5 bags per acre, rising to 19 bags under good management.

Cattle production, similarly, boomed around the same period for both commercial and traditional farmers. There is a report of   the   establishment  of veterinary services as early as 1913, though with  untrained  staff and poorly equipped systems. However, the Department of Agriculture placed such a high priority on veterinary services over the years that they contained the various cattle diseases and cleared the pleuro-pneumonia disease in Western Province.

Later on, maize marketing, cattle marketing, dairy marketing and meat marketing boards were established.  These boards were so successful that by the 1950s production went high and we became exporters of farm produce.  The production of coffee, cotton, wheat and horticultural crops reached such a high level in quality and quantity that our farmers competed successfully on the world market.

It is also very important to look at the traditional small-scale farmers who make 80-90% of the farming community in this country. Right after Independence the new government of the United National Independence Party (UNIP) was of the view that high agricultural production would come from mechanisation, fertiliser and bank overdrafts.  Certainly these are important, but they do not have the full solution.

In fact, right up to Independence time, small-scale farmers had a reasonably healthy amount of cattle, totalling around three million.  The veterinary department was also very well organised.  Culturally, cattle were also the pride of these farmers and the source of income and other needs.

Because of what the new government policy encouraged, small-scale farmers switched from cattle to become mechanised crop growers.  They became reliant on seasonal credits to buy fertiliser, which over the years continued to affect soil fertility and consequently crop yield.  A trade delegation to Malawi in 1974 reports that though on their tour they saw no single tractor on farms, Malawi’s agricultural output was ten times that of Zambia.  They produced 200 million kilos of tobacco compared to Zambia’s 3-4 million.  They grew many agricultural crops for sale to other countries and had processing plants for their products.  This success was achieved by traditional methods of farming from small-scale farmers who accounted for 95% of the total production.

FACING THE FUTURE

In light of this brief background, it is clear that if we have to find the way forward for the agricultural sector in this country, we need to fall back on our history and learn from the past.  It is true that we urgently need to address the situation as we face a threatening future but we must realise that we started well and just lost it somewhere.  This is where we need to learn.

As we face the future we must realise there is hope, that we have so many things on our side.  We have a beautiful country.  Despite the droughts we have faced, we have regular rainfall, five big rivers and four big lakes.  It is said that we have a fifth of all the SADC waters.  We also have 42 million hectares of arable land but are only using just above two million hectares.  The universities and colleges have produced for us the needed technocrats in the field of agriculture and we have a dedicated farming community.

We are yet to see if we have a government that appreciates the contribution of agriculture to the economy.  What we know is that we have never had a government that fully appreciated agriculture.  For a long time we concentrated on loss-making parastatals, especially ZCCM.

It is indeed right that after consultation the government decided not to go ahead with completely new plans but rectify the already existing problems facing the FRA.  The government is overhauling the FRA and trying to ensure all the loans owed to it are paid back.  This effort is indeed commendable.  I hope the government is also working on reducing political interference in the running of the FRA.  I still maintain that it is indeed necessary at this stage for government to intervene and to find its appropriate role, as liberalization of the agricultural sector has not done us any good. What then is the way forward?

SOME PROPOSALS

a)       Yes, let us clean up the FRA and continue with it.  But in the light of what has happened to NAMBOARD, ZCF and the original FRA, I propose a private/public initiative.  In other words let FRA be a marketing company listed on the Lusaka Stock Exchange but let it be 51% government owned and 49% private owned.  This company also is to run on commercial basis and should have private management  appointed by its board and not by government.  These should be top executive officials of high calibre to run the institution in a professional manner for the benefit of the shareholders and the farmers.  Putting the FRA in the hands of professionals will put the responsibility for the success of Zambia’s agriculture in the hands of experienced and knowledgeable people.  This will ensure autonomy and efficiency.  On the other hand, Government ownership of 51% shares will give it enough room to intervene in crisis moments and also to curb myopic capitalistic selfish interest.

b)       This company (alongside government departments in poor areas) will also have the objective of providing other necessary commercial services that have been poorly done by government.  These services would include the provision of inputs, extension services and information on new crops that can be grown profitably by Zambian farmers.

c)       The FRA can indeed acquire storage facilities and run the existing ones commercially on behalf of government.  It can also acquire interest in the milling companies and set up plants like rice mills, tobacco processing plant and so forth.

d)       With the persistent threat of droughts, floods and other calamities, the FRA needs to form an insurance company and set up other sources of agricultural project finance, for example, a merchant bank.

Such an undertaking certainly needs a well thought out business plan and massive project financing.  An important factor in this light is government support in various areas.  It is obvious that colossal amounts of initial financing are required.

Therefore, it can be envisaged that on top of private and public investment, donor financing would be solicited from both bilateral and multilateral donors in form of grants where possible.  If the source of finance be loans, then there will be the need to negotiate for long term concessional or low-interest loans.

FAIR MARKETS

Finally, it is important that government provides the so-called enabling environment we have been trying to create the last twelve years.  Yes, in some cases, the idea of free market has helped many farmers, especially cotton growers.  But it has badly hurt the ordinary person and farmers in general.  To date consideration has not been given to setting up safeguards for the products of our economy, as is the practice in EU or elsewhere.

Zambia’s free market has not been for Zambians but free for foreigners who have dumped their cheap goods, forcing Zambian producers out of business market.  The government needs to be cautious when it enters into trade agreements with regional and international bodies.  We need to be more independent and not always dance to other people’s tunes.

Let us look at the behaviour of the EU and the US in the agricultural arena.  Learning from the recent World Trade Organisation (WTO) meeting in Cancun, we need to stand together with other developing nations in solidarity and fight marginalisation in the global market as well as counter the effects of overly subsidized products from the US and the EU.  In this solidarity stance, we also need to continue to fight for more access to foreign markets.

Charles Chilufya, N.S.J
Jesuit Novitiate
Lusaka