In my previous Monday Opinion, I argued wheat can be a wonder crop that can deliver gains at different points despite continued neglect in policy and practice. I ended on an optimistic note that sector related bottlenecks vis a vis wheat can be addressed through a review of the sector, highlighting where government Kwachas can effectively be invested beyond traditional crops. In this feature, I explore various steps that can help to lay preconditions for the agriculture sector more broadly and for the wheat sub-sector to take-off. What I offer is not a comprehensive list, neither is it presented in order of importance. Rather, I offer a starting point for igniting conversations to critically think about agriculture and the wheat sub-sector as we know it. I identify four (4) areas:
1. Strengthen Support towards Wheat Value Addition and Manufacturing: Zambia’s history of agriculture seems to be a history of subsidizing farming and has not yielded desired results. Potential for job creation and improved incomes does not necessarily exist at primary production level. Any genuine transformation in the agriculture sector should focus efforts at value addition and manufacturing. Primary production should thus be viewed as a small part of the wider wheat value chain activities for support. State support should thus be strengthened at value addition and manufacturing. The potential for value addition and manufacturing around wheat already exists, and government can strengthen this level which in turn will stimulate agricultural production and job creation.
2. Promote Private Sector Participation Wheat Value Chain: Private-sector companies can find practical solutions to enter and grow the wheat sub-sector and agriculture in Zambia. Transformation of the wheat sub-sector and agriculture in general does not lie in strengthening state role or its related institutions such as the Food Reserve Agency. On the contrary, the future lies in private sector involvements across chain activities. Zambia can make the most of this through reforming its policy frameworks towards genuine liberalization, private sector participation and strengthening of production systems.
3. Address Tensions and Contestations in Policy Frameworks: Academic and policy-facing reports various evidence policy contradictions in agricultural related policies in Zambia. Here we talk about industrialization strategies, implementation plans, guidelines related to land access and utilization, and tenure security. This includes water and irrigation guidelines, input supply and use of chemicals. All these elements that all together should be harmonized in order to create conditions for wheat production should be addressed.
4. Import and export bans provide ‘killer passes’: Trade is not a luxury. Policy oscillation from imposing import bans to lifting them often driven by poor research evidence stifle manufacturing and value addition. Bans have their place in historical development of a sector such as protection of seedbed industries. However, bans create uncertainty in business environments, raise costs of doing business and can prove costly overtime. For instance, there are Statutory Instruments on import and export prohibitions of wheat grain, whole or broken, and wheat flour, dating as far back as March 2009 (SI18/2009). Of course, stop gap measures have been deployed sparing in between, but also abused. At about $450-per-tonne, Zambian wheat is the most expensive in the region. Its production has remained relatively low in part due to perennial deficits as local farmers cannot meet the local market demand. The country reportedly consumes an average of 540 000 tonnes of wheat per annum but experiences a deficit of as high as 250 000 tonnes every year. One would expect importation to be the immediate logical response especially the regional offers price-competitive wheat. Instead, Zambia has responded with a persistent outstanding import ban on wheat and an added cost to importation. Stop gap measures have been relied upon sparingly, creating distortions in the trade system. The current tax arrangement (20% tax) on wheat import which comes in form of 15% import duty and 5% surtax on importation is problematic for the sub-sector. These restrictions discourage importation of wheat, but only enriches a few commercial farmers who are involved in wheat production whilst ordinary Zambians pay the price. The Times of Zambia Business Column reported one miller saying: “It is true that wheat from South Africa costs about US$300 or so per tonne, for instance, but importing it to Zambia will cost an additional US$150 in import taxes. So, we are asking for less despite the increase.” Clearly, there are contradictions in the way this sector plays out. This is not a way to grow a sector as import-export bans fail to address outstanding trade issues, and the government may reconsider its position.
It is important to disdain that my goal is not to dismiss existing agricultural programs or efforts to critically rethink agricultural expansion. These are important efforts aimed at transforming the sector, and persistent food insecurity, low rural incomes and poor market linkages make existing efforts important and urgent than ever before but to continue advancing same systems that create rural vulnerabilities and stifle growth of the sector and expecting different outcomes at this point would be foolish. Rather, I hope this feature can encourage reflection on a particular problem, which is failure to create the conditions for the fulfilment of the potential of the wheat sub-sector – in its entirety.
About the Author: Dr Simon Manda is a Senior Researcher at the Centre for Trade Policy and Development. He is also a Visiting Research Fellow at Oregon State University, USA, a Fellow at the Inaugural Pan-African Scientific Research Council, and a Lecturer at the University of Zambia.
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