ZNFU reckons 2011 budget a chance to tackle hopelessness

ZNFU reckons 2011 budget a chance to tackle hopelessness
By Mutale Kapekele
Tue 28 Sep. 2010, 04:00 CAT

THE 2011 national budget provides the government with an opportunity to address the despondency that has beset the agriculture sector, the Zambia National Farmers Union has observed.

In their submissions for the 2011 national budget, the union observed that it was time for the government to make long-lasting and favourable decisions for the agriculture sector.

“The Union is convinced that this is an opportune time for the government to take far-reaching decisions that will forever change the Zambian agricultural sector for the better and achieve the shared view of economic growth through competitiveness and diversification,” ZNFU observed.

In its 2011 budget submissions, the ZNFU has observed that the agriculture sector has remained uncompetitive due high production costs.

“Lack of competitiveness has become an eminent threat to any further expansion in agriculture production because the surplus that has been produced cannot land in export markets at a competitive price,” the ZNFU stated.

“The main reason for this is that farmers in general (small, medium or large scale) engaged in production of maize or other crops and livestock (dairy, beef, pigs, poultry etc) all buy inputs at retail commercial prices and have to survive in the business of farming without subsidies.”

ZNFU observed that production costs had risen to unsustainable levels despite consumer price resistance on the local market that saw farmers getting sub-economic prices.

“This is one of the contributing factors to farm liquidations and perpetuation of poverty in the rural areas,” the ZNFU stated. “In the export markets, products are uncompetitive compared to products sourced from other countries. Therefore, while there is desire to diversify the economy through agriculture, it is eminent that this will only come about if production costs are reduced across the board.”

ZNFU is demanding value added tax (VAT) exemption for all agriculture products, the removal of import duty on electric delivery vehicles and livestock levies among other things.

It has proposed an increase in VAT to 16.5 per cent for the country to realise the lost revenue if agriculture products get the zero rating.

ZNFU is also demanding an increase in tax for edible oils to encourage local production.

It also called for the introduction of duty on mobile phone airtime and urged the government to target expenditure for the agriculture sector at programmes that support private sector growth “in line with the free market principles.”