Govt acts to spur agro growth, investments
Published On October 11, 2023 » 959 Views» By Times Reporter » Business, Columns
 0 stars
Register to vote!

ACCORDING to the Zambia Statistics Agency, the agriculture sector accounts for about 20 per cent of Zambia’s Growth Domestic Product (GDP) and employs over half of the workforce in the country.
However, the contribution to GDP has been gradually declining from 15.60 per cent in 2010 to 3.39 per cent in 2022 as per World Bank data for 2022.
Productivity remains low by global standards due to several factors such as adverse effects of climate change, high cost of inputs, unaffordable finance, inadequate irrigation and other agricultural support infrastructure, poor livestock and crop management practices, as well as inadequate mechanisation.
The Government, cooperating partners and stakeholders have paid particular attention to this sector by putting in place various measures and programmes for its growth.
Growth in the agriculture sector is key because of its potential to reduce poverty among members of rural communities who depend on farming for their livelihood.
This sector also has potential to promote industrialisation through processing and value addition.
To spur growth and investments in the sector, the Government has, in the 2024 National Budget, proposed measures that will support the scaling up agriculture productivity through mechanisation, farm bloc development as well as tax relief to promote the crop productivity.
To ensure that, Finance and National Planning Minister Situmbeko Musokotwane has proposed to allocate K13, 826, 019,474 or 7.8 per cent towards agriculture, livestock and fisheries interventions.
This is an increase from the K11, 209, 692, 002, which was allocated to the sector in the 2023 budget.
The increase in the funding allocations shows the Government commitment towards the Maputo Declaration which requires African countries to have a minimum allocation of 10 per cent to agriculture from the total budget to achieve a six per cent annual growth.
Dr Musokotwane proposes the development of farm blocs through investment of basic infrastructure for agriculture, such as feeder roads, electricity, water for irrigation and communication facilities.
In the 2024 budget, he announces the Government’s intention to construct 300 kilometres of roads in Nansanga, Luena and Shikabeta farm blocs.
“In the same vein, the government will also embark on the construction of 10 bridges to enhance connectivity in the farm blocs. In order to facilitate the installation of power to farms within the farm blocs, 200 kilometres of power-lines will be constructed in Luena, Luswishi and Shikabeta farm blocs,” he states.
To reduce heavy reliance on rain-fed agriculture and facilitate year-round crop cultivation, Dr Musokotwane says there will be increased investments directed towards enhancing irrigation infrastructure.
Dr Musokotwane proposes the use of smart farming technologies with support from cooperating partners in the 2024 budget.
These will include conservation agriculture, water harvesting, adaptive research, on-farm research programmes, agricultural insurance, as well as early warning systems.
To promote and grow cotton production, Dr Musokotwane proposes a tax holiday of five years for cotton seed production and ginning of cotton and a 10-year tax holiday for spinning and thread weaving.
PriceWaterCoopers (PwC) Zambia says the proposed tax holiday for the cotton value chain will enhance the growth of the local textiles industry.
PwC says the tax holidays proposed for the cotton value chain represent a determined effort to expand the cotton industry in Zambia.
The company states in its 2024 budget analysis that the government has a clear goal in growing the local cotton and textiles industry.
“With the emphasis on longer tax breaks for processes such as spinning and weaving, there is a clear push to transition from exporting raw cotton to manufacturing and exporting cotton products,” it states.
It states that the holiday will foster local value addition and increase export revenues.
PwC indicates that the 2024 budget shows Government commitment to grow the agriculture sector.
“It is encouraging to see that the Government recognises the importance of incorporating technology in this sector. The plan to enhance smart agriculture is commendable as this is part of the solution to addressing challenges associated with climate change,” it further states.
PwC observes that the sector remains heavily reliant on rain, leaving the crop yields vulnerable to the effects of climate change such as drought and floods.
The company states that infrastructure plans around the farming blocks should go a long way in attracting the investment required for the development of the farm blocks and actualising the 2024 budget plans.
In the same light international economic relations professor, Oliver Saasa expresses his contentment of the interventions the government has put in place for the agricultural sector in the 2024 National Budget.
Prof Saasa, who is the current Mulungushi University chancellor, reiterates that the agriculture sector caters for the majority of the population of the country hence the need for extra focus from the Government.
He acknowledges that the Government has allocated enough resources to seriously boost productivity and production in the agriculture sector.
However, he notes that to ensure food security the Government should consider incentives around milling machinery so that citizens are able to grow their own maize and process it at a cheap price.
“This will not only ensure food security in the country but also help alleviate poverty among Zambians considering the majority of poor people are in the agriculture sector,” Prof Saasa said.
Prof Saasa says the 2024 budget has tackled issues such as prohibitive cost of inputs, inadequate access to finance or high cost of finance that has inhibited the growth of the sector.
He also expresses happiness with the Government’s decision to address insufficient irrigation and related agriculture support especially around farm blocs noting that the country counts for a significant share of water in the sub-region and that with irrigation support Zambia can be an agricultural hub.
“Zambia accounts for 35 per cent of water in the sub-region, making the nation quite viable to exploit this resource and ramp up agricultural production,” he says.
Furthermore, the professor encourages the Government to consider medium and small scale farmers in the irrigation and agriculture support programs as they account for 75 per cent of the entire grain production in the country.
He also hails the announcement of the Comprehensive Agriculture Transformation Support program (CATSP) in the 2024 National Budget saying that the initiative encompasses all the necessary tools to grow the agricultural sector.
“initiatives such as extension services, access to finance, irrigation development support value chain as well as enhanced storage facilitiesare a part of the CATSP programme,” Prof Saasa says.
He adds that the budget also focuses on climate change which is very vital for the sector as well as the economy.
Prof Saasa explains that in case of drought it will not only be the agricultural sector affected but also the energy sector as electricity generation also relies on water.
Agriculture expert Oliver Bulaya says the Government should make the procedure of accessing the agricultural credits facilities user friendly for smallholder farmers especially in rural areas to benefit from such initiatives.
Dr Bulaya says this is necessary in terms of unlocking the potential of the agriculture sector and seizing the export opportunities it presents while ensuring domestic food security.
He says the Government should ensure that the agriculture credit facility captures the vulnerable but viable farmers that need the support most.
“Because beneficiaries of such programs are mainly the elite and not the smallholder farmers from the rural areas, significant progress may not be seen,” Dr Bulaya says.
He further encourages the Government to continue sensitising farmers and make the procedure for accessing the credit facility user friendly so as to capture vulnerable but viable farmers that need the support.
“The Government must also create interest in producing a report on how many farmers have benefitted from these programs otherwise the resources will end up being accessed by the exposed few and leave out productive farmers,” he says.
Agriculture is undeniably an important sector in the country, especially that it determines not only the nutrition of citizens but their health.
Therefore, it is vital that the Government in the 2024 National Budget addressed all the issues raised around the sector.
Doubt may only linger around execution, however it may be concluded on good authority that the sector is of keen interest to the sitting Government

Share this post

About The Author