2014 had ups and down for Zambian farmers-ZNFU

The Zambia National Farmers Union says 2014 has been a year of mixed fortunes for Zambian farmers with many ups and downs.

In her end of year review, ZNFU President Dr Evelyn Nguleka said as farmers tried to remain afloat in 2014, there were also threats of added costs from new fees and levies introduced by local councils and other statutory organizations which eventually are borne by farmers.

Dr Nguleka cited the Workmen’s Compensation Fund which revised the assessment rates upwards without any consultations with stakeholders while parking and loading fees were introduced in some local councils.

She said as farmers’ constantly strive to make adjustments in order to remain in business, government is an important partner in addressing policy induces cost centers and other external factors which farmers’ have no control over.

Dr Nguleka said already, the rainy season has delayed so much and farmers have lamented that this is the worst late rains ever seen in many years which could be sign of an uncertain farming season yet investment in massive irrigation has remained at the back burner of the agriculture agenda.

The ZNFU President said maintaining genuine dialogue is key to avoid springing surprises on farmers saying when farming business thrives, the multiple positive effects are shared by the entire chain including government and society at large.

‘As the year draws to a close, there cannot be a better time to look back at the year that has quickly gone by to take stock. The year 2014 started on a grip of uncertainty as macroeconomic instability set in early in the first half of 2014 as evidenced by continued increase in the annual rate of inflation which reached 8.1% as at end of November which is above the government end of year target of 6.5% and the monetary policy rate was increased to 12% in April and to 12.5 % in November,’ Dr Nguleka said.

She said, ‘Additionally, the Zambian Kwacha continued to fluctuate against major currencies such as the USA dollar and the British pound. These changes in macroeconomic fundamentals negatively affected the performance of key economic sectors such as agriculture because farmers encountered high input costs, high cost of borrowing, electricity and transport against a backdrop of generally declining producer prices of certain commodities.’

The ZNU President said the unstable macroeconomic environment led to government eventually abandoning the radical balance of payment policy measures introduced through numerous SIs (SI 33, 78, 32 & 55) in a bid to repatriate foreign exchange earnings into the country.

‘The overall effects of all these factors translated into reduced competitiveness of local agricultural commodities against imported products and growing uncertainty in the agriculture sector because of evident government policy inconsistency.’

She added, ‘In the same vein, 2014 saw a resurgence of production of some commodities although this was accompanied with marketing challenges. Emerging from the pronouncements of a maize vs. fertilizer barter system policy made in 2013 as a solution to funding FRA purchases, production was predicted to drop in the 2013/2014 season.’

‘However, this was not the case because the private sector came to the party and offered maize farmers attractive prices which gave impetus to farmers, including some large scale farmers, to grow more maize harvested in 2014 than in the previous season plus improvement in yields among small scale and emergent farmers.’

Dr Nguleka said, ‘Hence, against all odds a bumper production of maize estimated at 3.1 million tonnes confirmed by the ZNFU post agriculture production survey was achieved. However, this positive development has been masked by the marketing challenges that ensued as the crop mainly sold to the FRA has remained unpaid for right into the new farming season, a factor which is likely to affect negatively maize production going forward as farmers are disappointed.’

She said the delayed payment for maize to most small scale farmers in 2014 has caused serious cash flow challenges which has made it difficult for farmers to adequately prepare for the 2014/2015 farming season as well as to honour loan repayment obligations with some commercial banks operating in the country.

She said other seasonal crops such as groundnuts, sunflower, millet, rice and tobacco also exhibited growth while soyabeans, sorghum and cotton recorded decline in production.

‘On the other hand, irrigated crops such as wheat and sugar posted remarkable growth. It is gratifying to note that amidst all the challenges that the sector is facing, farmers in Zambia have continued to produce enough maize, wheat, sugar and soyabeans to meet national consumption requirements and export markets are being sought after for the surplus.’

She said that wheat production in 2014 reached 338,000 metric tons compared to 314,463 largely on account of improved yields which hit 7.6 Mt/ hectare from 7.2Mt/hectare reported in 2013.

‘With these strides, Zambia continues to expand export of wheat flour into regional export markets mainly in the DRC and this should be nurtured carefully. The eminent threat to this industry is that of cheap imports of wheat from outside the continent and the high cost of doing business in Zambia which the Union continues to highlight to the authorities in bid to find lasting solutions.’