Focus shifts to agri-economy

President Levy Mwanawasa has announced measures aimed at turning agriculture into one of the main drivers of Zambia's economy. The fall in copper prices, Zambia's main source of foreign currency, has made the country focus on economic diversification. Among the measures announced by Mwanawasa include sourcing "cheap foreign currency" for long- term agricultural sector financing, zero-rating tax on imported farming equipment and keeping power tariffs low. "My administration wants to make agriculture a priority. We are sure that with long-term financing, more Zambians shall engage in agriculture, create jobs, earn foreign exchange and improve food production," Mwanawasa said. He was speaking during the Zambia Agriculture Investment Promotion Conference (ZAIPC), held this week in Lusaka over two days. The conference was an initiative of the Bank of Zambia and the Commonwealth Development Corporation (CDC). Zambia's Central Bank governor Caleb Fundanga told IRIN the aim of the conference was "to attract and promote investment in the agriculture sector because, regrettably, very little was done [to stimulate the agri-economy] in the last decade". "We want to see an increase in food production and food security, so that we can stop importing food," he said. A critical food shortage after two consecutive droughts left Zambia with a shortfall of 635,000 mt of grain last year. Food prices rocketed, and 2.9 million people needed food aid. Zambia returned to multiparty politics in 1991 under former president Frederick Chiluba, when the government liberalised the economy, including agriculture, and removed subsidies in compliance with International Monetary Fund (IMF) and World Bank conditionalities. Prior to Chiluba's reforms, cooperative banks had lent money to farmers at favourable rates, while national marketing boards bought their crops. Agriculture Minister Mundia Sikatana says the current government intends to revive some of these facilities. "If you have no land, you have to buy land before you can farm. Water costs [money], equipment costs [money] - all these things cost, hence the reason we are reviving the cooperative banks [to] lend specifically to the agriculture sector. We shall also have a specific fund to lend to small-scale farmers," he said. In a bid to boost production, the government has also continued to support more than 150,000 farmers with subsidised maize seed and fertiliser. The scheme began last year and has resulted in a harvest of some 1.2 million mt of maize, double that produced at the height of the food crisis. Despite the recent success, there remains some scepticism around the implementation and efficacy of the recently announced measures. "The plans sound good on paper but in reality farming is still a rip-off in Zambia. Take for instance the reduced power tariffs they [government] are talking about ... you have to grow at least five hectares of maize for you to qualify, and anyone in farming will tell you that [farming] five hectares [is] three times more expensive than the [savings realised by the] reduced rates. It does not make sense at all," Vincent Malambo, a commercial farmer from Lusaka North, told IRIN. Another farmer, former vice president Enock Kavindele, commented to IRIN: "It is easy to make policy statements that sound good, but implementing them is often a problem." He warned that unless government fast-tracked implementation of the new policies, "we shall keep talking about this agriculture-driven economy without achieving results". An example is the government's sluggishness in accessing a US $50 million World Bank facility, half of which is a loan and the other half a grant. The money was made available after a workshop held two years ago to find ways of diversifying from copper to agriculture. Laurence Clarke, the former World Bank representative to Zambia, told IRIN that "up to now, Zambia has done nothing to access the money that could have helped in agriculture".