Wednesday, November 13, 2013

Heavy spending on FISP worrying, says Kabaghe
By Gift Chanda and Chiwoyu Sinyangwe
Wed 16 Oct. 2013, 14:00 CAT

CONTINUED heavy spending by the government on FISP and the FRA at the expense of other agricultural programmes is worrying, says Chance Kabaghe. And Kabaghe, who is the executive director of the Indaba Agricultural Policy Research Institute (IAPRI), says the government should be careful not to stifle competition in the fertiliser business as it seeks to revamp the Nitrogen Chemicals of Zambia (NCZ) by awarding it big tenders to supply inputs under Farmer Input Support Programme (FISP).

But agriculture minister Robert Sichinga says the government's decision to buy agriculture inputs for this season's FISP, cutting out the private sector will save the country millions of dollars.

Commenting on strategic policy measures the government plans to undertake next year in the agricultural sector, Kabaghe, the former agriculture minister, said the government should be commended for focusing on some key drivers of the sector such as roads, irrigation and dip tanks but that the continued heavy spending on FISP and the Food Reserve Agency (FRA) was a concern.
"We have serious question marks with huge allocations going to only those two programmes. These programmes, according to our research, have shown that they have not produced the required results," he said.

"Productivity per hectare has remained constantly low - at two tonnes per hectare. The potential of the maize seed varieties produced by seed companies in this country is above eight tonnes per hectare."

Last Friday, finance minister Alexander Chikwanda proposed in the 2014 national budget to spend K500 million on FISP, while the strategic FRA would gobble about K1 billion.

"We would have loved a lot of money going into research and development because this is an area that is crucial for growth of the agriculture sector," Kabaghe said.

He further cautioned the government not to allow NCZ to cloud out the private sector in the fertiliser business.

The government, according to Chikwanda, plans to continue revamping the NCZ in 2014, extending its operations to produce urea.

"I know everyone now is very happy that NCZ is being recapitalised and they have already supplied 70,000 tonnes of D compound fertiliser to the government and the minister said that next year, they will also be producing urea. In the short run, it is a good thing to do but I can assure you that we should not continue to do that," he said. "All that is going to do is stifle competition."

Kabaghe said the past years had seen vibrant companies competing in the fertiliser business but these could collapse if all the contracts would be awarded to NCZ.

But Sichinga has defended government's move to eliminate private companies that imported fertilizers for resale to government.

The government this year plans to spend over US $1 billion in buying and distributing seeds and fertilizers to peasant farmers.

Sichinga said the government is subsidizing the inputs by 51 per cent while beneficiary farmers would pay 49 per cent of the K1, 070 which involved two bangs of basal dressing, another two for top dressing and a 10 kilogramme bag of seed.

"If you look at the cost, the tender that came in, they private suppliers were asking for a US $1, 000 per metric tonnes," he said. "But we are paying US $383 per metric tonne with Zambia paying for costs of the fertilizer from Saudi Arabia."

Meanwhile, Sichinga said the FISP was flawed in that it captured only 900, 000 poor farmers, leaving out 600, 000 eligible farmers.

He said effective next year, the flopped electronic voucher system would be replaced with electronic cards that carried biometrics for beneficiary farmers.

Sichinga revealed that the use of electronic voucher system which had been touted since 2011 failed to take off due to lack of computers and an operation centre.

"We have just completed creating the data base for the e-card for farmers," he said. "With this e-card which farmers will get, it will carry the value which government can send to beneficiary farmers. This e-card will have the number of the farmer, his or National Registration Card number and also a password."

Sichinga also said the FISP was supposed to cater for 1.5 million farmers and not the 900, 000 serviced currently.

"We have just finished our FISP census and according to our census, we just have under 1.5 million eligible farmers for FISP," he said.

"So, there is a 600, 000 farmers that we are not supporting because the amount of money we have is limited. So, that 241, 000 that was supposed to be on e-voucher, now, we have to put them on the revised FISP. From next year, it's just gonna be Farmer Input Support Programme which is electronically done."

And Sichinga said 50, 000 metric tonnes of the top dressing fertilizer was expected in the country this month via Nakonde from Dar es Salaam and distribution would start from the Northern parts of the country.

"My plan is that before the end of October all the fertilizer and seeds should be with the farmers but suffice to say it will be in time because it basal dressing fertilizer is all in the districts right now," said Sichinga in an interview.

"We expect to procure, in total, just under 100, 000 metric tonnes of top dressing while the entire D-Compound of slightly over 72, 000 will be produced from Nitrogen Chemicals of Zambia. We are almost finished with production of basal; as of last week, we produced 68, 000 metric tonnes and of that number, more than 50, 000 metric tonnes has already been dispatched to the districts."

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