The Zambian Government’s agricultural subsidy programme (FISP) is failing and it should investigate and promote other options to encourage growth in the agricultural sector, says the Indaba Agricultural Policy Research Institute (IAPRI).
“Despite evidence showing how the country’s signature Farming Input Subsidy Programmes, FISP, has failed to spur agricultural diversification, address low agricultural productivity, food security and stubbornly high rural poverty rates, the country has continued to allocate significant resources towards their implementation,” IAPRI said in a Policy Advisory Paper released this week.
IAPRI advises the government to reroute its discretionary spending of the national budget away from FISP to alternative social protection programmes, which still support economic growth and social development. According to the paper, government should cut FISP spending to no less than US$105, or 20% of its agricultural budget (as opposed to 57% of the current agricultural budget).
“The government needs to make bold decisions and implement reforms that will have more far-reaching positive impacts on the agricultural sector.”
The institute made three alternative proposals to address poverty and social upliftment.
The first is to spend more on the social grant system, called Social Cash Transfers. It should also implement two other programmes: an expanded Home Grown School Feeding Programme and a Women, Infants and Children Programme.
“The last two programmes will provide direct support in the form of food to households in need, whilst indirectly supporting farmers by providing a reliable market for a diverse range of agricultural products.”
IAPRI also recommends that more government funding should be distributed to key drivers of agricultural growth.
These include irrigation development, crop, soil and livestock science research and development, extension programmes and rural infrastructure development.
To ensure transparency and accountability of the projects, IAPRI says effective monitoring systems must be in place.
IAPRI mentions several problems with the current system. These include the failure to address agricultural variability in soil fertility and climatic conditions, since FISP is a “one size fits all”. Reports also show late subsidies add to failure, as well as disproportionate allocation to households with regards to farm assets and size.