Maravi

ZNFU bemoans production cost in agriculture

ZNFU bemoans production cost in agriculture
By Fridah Zinyama
Wed 21 Oct. 2009, 15:49 CAT

ZAMBIA National Farmers Union has observed that there will be no growth in the country’s agriculture sector if nothing is done to reduce the cost of production. And ZNFU president Jervis Zimba said Zambia has lost out on the opportunity of becoming the bread basket of the region.

During the Agricultural Consultative Forum (ACF) and Food Security Research Project (FSRP) breakfast meeting to analyse the 2010 national budget, Zimba said the annual growth rates recorded by the agricultural sector in the last five years had remained low due to the additional costs imposed on farming which have contributed to making the agriculture sector in Zambia uncompetitive compared to other countries in the region.

“The decision to increase excise duty from seven per cent to 10 per cent will further increase production costs for farmers as they mainly depend on diesel for their production,” he said.

“Furthermore, agricultural products are VAT Value Added Tax exempt which does not favour farmers as VAT is paid on certain inputs even before the process of production has begun. Costs of production are further driven up by other non-production related costs farmers have to pay up because of being involved in the business of farming.”

Zimba said the high cost of production was hindering the growth of the agriculture sector which was making Zambia uncompetitive.

“South African products are much cheaper, meaning that they are able to reach markets that Zambia cannot because of there low production costs,” he said. “Why should South African products which pass through Zimbabwe and Zambia still land in the Democratic of Congo at a cheaper price?”

Zimba explained that this was why ZNFU had made specific proposals during the 2010 budget submission process and requested for agricultural products to be zero rated for VAT purposes in a bid to reduce costs of production, stimulate demand and expand production.

And Zimba said Zambia had lost out on the opportunity to become the food basket in the region when Zimbabwe was experiencing difficult times because it could not adequately deal with serious issues affecting the agriculture sector.

“Soon Zimbabwe might regain its lost position because of the goodwill of the donor community and Zambia will continue to struggle to produce enough food for its own people and to export to other countries,” said Zimba.

And commenting on the budget on behalf of ACF and FSRP, Chance Kabaghe said agro-dealer and private output marketing would remain stifled in Zambia due to the continued involved of government in the crop marketing season.

“Government has continued play an active role in the crop marketing process as seen by the 18 per cent budgetary allocation of the agriculture allocation which has been set aside for the Food Reserve Agency to buy maize in the 2009/10 season,” he said.

Kabaghe further added that many drivers of agricultural growth were still under-funded, adding that this would affect government’s intentions of achieving the sector’s competitiveness and diversification targets.

Labels: ACF, AGRICULTURE, JERVIS ZIMBA, ZNFU

posted by MrK @ 3:56 PM