Floods threaten agribusiness
Floods threaten agribusinessBy Joan Chirwa
Tuesday January 22, 2008 [03:00]
ZAMBIA’S agribusiness is likely to face a serious hitch this season owing to the current rainfall pattern, as the country is projected to slip from being competitive on the export market. And the World Development Report (WDR) 2008 has emphasised the need for greater investments in agriculture in developing countries in view of the sector’s high potential for job creation.
Commenting on this season’s rainfall pattern and the likely impact on agri-business, Small Holder Enterprise and Marketing Programme Agribusiness Development Component (SHEMP-ADC) team leader, Gerrit Struyf said there is a likelihood of reduced crop yields and subsequently, farmer incomes due to heavy rains.
Struyf said the above normal rainfall being experienced in the country had both negative and positive impacts; although the former outweigh the latter considering that Zambia was largely dependent on agriculture for household incomes, food security as well as overall economic growth.
“The heavy rains over the last six weeks will especially affect large parts of the Southern, Central and Eastern provinces. It will mainly affect cotton, being a crop which needs warm conditions and cannot withstand water logging,” Struyf said.
Following last year’s campaign by the ginning companies and Cotton Association of Zambia, more farmers have this season planted the crop. However, they are likely to get less income from cotton due to the expected low production despite the current attractive prices on the international market.
According to the Cotlook Index, international cotton prices have gone up by 30 per cent over the last few months, and local farmers would be in a position to benefit from the boom if production is enhanced.
“The prices of cotton on the international market are very strong and it will be a pity for cotton farmers not to benefit from this due to poor harvest due to current climatic conditions,” Struyf said. “This year’s rain is likely to reduce crop yields per hectare.”
Struyf further said reduced maize production resulting from poor climatic conditions would make it difficult for Zambia to benefit from regional export markets.
“The high rainfall will definitely affect yields for maize due to leaching of fertilisers from soil and water logging and shortage of sunlight. International grain prices are expected to continue to be strong in the coming year,” Struyf said. “Reduced Zambian maize production will make it difficult for Zambia to benefit from regional export markets to Zimbabwe and the DRC.”
On the other hand, Struyf indicated that the heavy rains would have a positive effect on the falling water tables in the Southern and Eastern Provinces for the improvement of livestock and irrigated production perspectives.
The Meteorological Department last week forecast reduced rains over the Southern half in the short term, although most parts of the country are expected to record normal to above normal rainfall throughout this season.
The heavy rains being experienced in the country have claimed lives of a couple of individuals and rendered hundreds of people homeless, with serious threats of food insecurity.
And WDR 2008 has established that agriculture employs 65 per cent of the sub-Saharan Africa labour force, generates 32 per cent of the region’s GDP, and is about four times more effective than non-agricultural growth in reducing poverty.
“However, farm productivity is lagging behind, threatening to push millions of people into poverty,” the report noted.
The WDR 2008 warns that the agriculture sector must be placed at the centre of the development agenda in order to achieve the goals of halving extreme poverty and hunger by 2015, as set out in the Millennium Development Goals (MDGs).
Titled ‘Agriculture for Development’, the report says the agricultural and rural “While 75 per cent of the world’s poor live in rural areas in developing countries, a mere four per cent of official development assistance goes to agriculture.
In Sub-Saharan Africa, a region heavily reliant on agriculture for overall growth, public spending for farming is also only about four per cent of total government spending and the sector is still taxed at relatively high levels,” the report stated.
“For the poorest people, GDP growth originating in agriculture is about four times more effective in raising incomes of extremely poor people than GDP growth originating outside the sector.”
In the case of Zambia, budgetary allocation to the agriculture sector is slowly getting close to 10 per cent of the total national budget.
The Economic Commission for Africa (ECA) and the African Union Commission (AUC) have also intensified their efforts to compel African countries to allocate at least 10 per cent of their budgets to agriculture.
For example, in the 2006, the government allocated 5.5 per cent of the budget towards agriculture and the figure rose to 8.8 per cent the following year (2007).
The report states that a dynamic ‘agriculture for development’ agenda could benefit an estimated 900 million rural people in the developing world who live on less than US $1 a day, most of whom are engaged in agriculture.
World Bank president, Robert B Zoellick, has also emphasized the need for giving agriculture more prominence across the board.
Zoellick said countries must deliver on vital reforms such as cutting distorting subsidies and opening markets, while civil society groups especially farmer organizations need more say in setting the agricultural agenda.
And Zambia National Farmers Union (ZNFU) executive director, Songowayo Zyambo, said a much higher allocation to the agriculture sector is expected out of this year’s budget as opposed to what was stipulated in the Medium Term Expenditure Framework (MTEF).
Zyambo said according to the MTEF, the agriculture sector is likely to receive slightly lower funding compared to last year’s 8.8 per cent of the national budget.
“We need to see more allocation towards infrastructure development in agriculture, livestock disease control and irrigation.
The target is for most African countries to start allocating at least 10 per cent of their total national budgets towards agricultural development because most of African countries are heavily dependent on agriculture for economic development,” said Zyambo.
Labels: AGRIBUSINESSES, ECA, FLOODS, MTEF, RAINFALL, WDR 2008
posted by MrK @ 7:59 PM
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