The Zambian government has identified the agricultural sector as a driver of economic diversification and job creation.
On Friday the Minister of Finance, Felix Mutati, announced that agriculture had been allocated a major slice of the 2017 ZMK64.5 Bn budget. According to Mutati, the aim is to support macroeconomic objectives to drive job creation and economic diversification, as part of the Economic Recovery Programme – Zambia Plus.
Mutati said the Farmer Input System Programme (FISP) had received the greater portion of funds in the agricultural sector, in the hopes that it would encourage farmers to diversify into cash crops such as cotton, cashew nuts, soya beans, cassava and rice.
The government hopes to incorporate the E-voucher system into FISP by the 2017/2018 season allowing FISP-beneficiaries to be able to buy various different types of seed and other necessary inputs.
“The E-voucher system will help reduce excessive overheads and wastage… and will ensure prudent use of our resources in line with our Economic Recovery Programme,” said the minister.
The Minister of Agriculture, Dora Siliya, said her department would focus on increased productivity and crop diversification, which would be facilitated through increased support for FISP to the tune of ZMK 2,9 Bn for 2017.
Siliya said the E-vouchers, rolled out in 2015 in certain parts of Zambia, gave farmers the choice of growing a variety of crops, that would help to ensure the consistency of production so necessary for export.
“Through smart subsidies at production and not consumption, our farmers will be rewarded appropriately for their hard work. Consumers will be cushioned through a choice of foods and not white maize meal only. By 2019, we wish to have 25% of the mealie-meal market to be a blend of white maize and other types of meal such as cassava,” Siliya said.
Turning to cash crops
The agriculture minister added that the department planned to increase cassava production from 800 000 tons to 1,5 million tons in 2017.
According to Siliya the department encouraged farmers to grow high value cash crops like cashew nuts, [and had assisted] with the planting of a million improved seedlings in the Western Province.
One project granted funds from the national budget was a cashew nut infrastructure support programme worth ZMK 572,75 million, that would benefit 600 000 farmers in the Western Province.
Siliya said a major challenge for Zambian farmers face is access to credit; with only 1% of farmers able to access bank finance.
“We will set up the emerging support fund especially for horticulture products. It is time to fill supermarkets with our produce, which we [can] also export.”
Although the current ban on maize exports is still in place, according to Siliya, the government has said that policy consistency is important to the agricultural sector. Consistency gives stability and predictable access to wider markets.
“Policies such as export bans and setting prices above market rates generate uncertainty which can negatively affect production. To redress this, government will refrain from using these instruments to regulate agricultural markets,” the minister of agriculture said.
Despite this, the introduction of a 10% export tax on maize exports was announced.
Several other projects received funds:
• ZMK 428, 5 million has been allocated to irrigation development to support crop production.
• ZMK 18, 3 million has been allocated for entrepreneurial aquaculture projects.
• The government plans to carry out a livestock census in 2017 and has set aside ZMK 50 million for the census.
• ZMK 30 million has been budgeted for dip tanks, and ZMK 10 million for a cordon line to control and curb trans-boundary diseases.
• The Food Reserve Agency received ZMK 942, 5 million for maintenance of national strategic food reserves.
• Funding of US$40 million has been set aside for the Emergent Farmer Mechanisation Programme.