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
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There is need to address challenges in agriculture marketing – Chituwo
Written by Kabanda Chulu
Saturday, September 26, 2009 6:04:41 PM
AGRICULTURE minister Brian Chituwo has said there is need to address challenges facing the marketing of agricultural commodities if the agricultural sector is to make a meaningful contribution to Zambia’s economic development.
During the Agriculture Consultative Forum (ACF) stakeholders’ meeting on the possibility of establishing a Public Private Partnership (PPP) marketing institution for Zambia in Lusaka on Wednesday, Dr Chituwo said the development of the agriculture industry was important to economic growth as well as poverty reduction.
“In this regard, development of a well-functioning agricultural market is seen as a necessary element towards achieving this economic development and marketing of agricultural commodities especially those produced by small-scale farmers has continued to be a challenge to both government and private sector and has probably stifled growth in the sector for a long time now,” Dr Chituwo said.
“Since the dissolution of National Agricultural Marketing (NAMBoard) in 1989 and subsequent transfer of marketing functions particularly for maize to the Zambia Cooperative Federation, agriculture marketing in the country has not been very encouraging.”
He said the establishment of the Food Reserve Agency (FRA) in 1995 partially responded to the problems created by the lack of an agricultural marketing institution.
“While FRA is intended to purchase designated crops for strategic food reserves, there are still problems in the market with regard to general crop marketing, especially for crops not designated as well as other commodities,” said Dr Chituwo.
“In this regard, I implore all stakeholders to critically analyse the situation and chart the way forward towards creating a PPP marketing institution and I strongly believe that some of the modalities of the dissolved NAMBoard can still find room in the proposed institution set up.”
Labels: ACF, AGRICULTURE, BRIAN CHITUWO, MARKETING, MARKETING BOARDS, NAMBOARD, PPPs
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Consultative forum regrets lack of cotton industry regulatory board
Written by Fridah Zinyama
Friday, March 06, 2009 6:19:35 PM
THE Agriculture Consultative Forum (ACF) has observed that the absence of an effective regulatory framework (Cotton Board) in the cotton industry is hampering its growth.
In a presentation on effective public private sector coordination in Zambia’s cotton sector to members of parliament in Chisamba, ACF Research project officer Stephen Kabwe said the lack of a regulatory framework was undermining the sector’s growth as there were no rules to control the players in the industry.
“Over the past few years, there has been an increase in ‘side buying’ (buying a crop financed by somebody else) due to the proliferation of companies buying seed cotton,” he said.
Kabwe observed that most of the problems being faced by the cotton sector would be minimised once the cotton board was put in place.
“The cotton sector has slowly been growing and supports over 280,000 households in Zambia, meaning that there are over 2,200,000 people who are directly or indirectly dependent on cotton production,” he said.
Kabwe said the sector earned Zambia between US$ 64 million and US $70 million in 2005/206 in foreign exchange from cotton exports.
“This revenue could be increased if most of the challenges that the sector is experiencing are addressed,” he said.
Kabwe however noted that the unstable exchange rate that the country was experiencing was not good for business as it was increasing production costs.
“And the sharp increase in profits tax on lint exports and also on cotton seed in this year’s budget could further destabilise the industry, especially in absence of a functioning Cotton Board,” Kabwe said. “These factors could reduce the ginners’ ability to offer farmers high seed cotton price. The Cotton industry could further be destabilised due to reduced demand of cotton lint on the international market due to the financial crisis.”
But Kabwe noted that the high reputation on the quality of Zambian cotton lint could help give it an edge on the international market.
Labels: ACF, COTTON, REGULATION
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