During a recent meeting between the Zambian National Farmers’ Union (ZNFU) and the ministers of finance and agriculture, the union brought several worrying factors affecting growth in the agricultural sector, to the attention of the ministers.
“The ZNFU pointed out that the high cost of doing business because of the high tax burden and cumbersome regulatory environment, threat of imports on local products and reduced funding to extension services and research, were some of the key challenges constraining agricultural expansion and economic diversification,” the latest brief states.
The 2017 National Budget includes several proposals which will put additional financial pressure on farmers. This includes the 15% import duty added to machinery spare parts, a 10% export tax on maize, non-claimable VAT on petrol, only 90% VAT claimable on diesel, the doubling of toll gate fees end the reduced budget allocation to livestock research and development.
Felix Mutati, minister of finance, told farmers that issues around the tobacco tax had been addressed, and that the 15% machinery parts import duty would not affect agricultural machinery.
Agriculture minister, Dora Siliya, said she had discussed the possibility of increasing the budget allocation for extension services with Minister Mutari.
Both ministries urged the ZNFU to identify legislation that needed modification. Acts identified during the meeting included the Livestock Developing Policy, Agricultural Marketing Act and the Wildlife Act.
Other topics requiring government action included:
- Protection of the US$40m emergent farmer fund announced in the budget, and the addition of this to existing programmes like the Bunjimi Asset Plus programme. Bunjimi Asset Plus is a national partnership between the ZNFU and Natsave, which aims to improve access to commercial credit, sustainably, for small scale farmers.
- The amendment of Vat Rule 18 to include Airway Bill or Bill of Landing as proof of exports for the Zambian Revenue Agency.
- The withdrawal of the circular from the Bank of Zambia on value limits on cheques and electronic fund transfers (EFT), a decision that was made in June to promote the use of electronic payment methods.
- Roll out of irrigation infrastructure and the agriculture ministry’s ownership of all irrigation projects.
The ZNFU plans to meet again this week to prioritise these issues according to short- , medium- and long term importance, and to provide a list of the most urgent needs that the departments should address