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Thursday, 2 October 2008

Chilli powered development?

The Times report on how farmers in Mfuwe are earning a living from growing chillies. What started as a simple campaign to scare away elephants from crop fields, is now turning into a viable commercial farming activity for several Mfuwe residents. Excerpt:

....Peasant farmer Boniface Mbao, 63, first planted the hot spice crop in 2006. By the end of the last season, he had managed to raise enough to buy iron sheets, household goods, and even built a standard house on his farm.

“I have bought a big radio cassette, 10 iron sheets, and even this house I have built out of the same money,” Mbao told this writer at his farm in Chitilila area. I started picking (harvesting) this chilli sometime in February this year, and even now I am still picking. It is very profitable, more profitable than any crop I have grown before. I sell at K7,000 per kilogramme,” he says.

Mr Mbao is one of the many residents in the tourism resort town who are now working their way out of grinding poverty on the back of well-paying returns from growing chilli, thanks to the South Luangwa Conservation Society (SLCS), a local community-based natural resource conservation project, supporting residents to find alternative livelihoods to poaching and snaring of wildlife in the area.

Small-holder chilli growers like Mr Mbao often group themselves in small teams of up to 20 people to ensure effective crop output and better bargaining. Through such groups, the farmers are able to receive free extension services on the production process of chilli as well as expert knowledge on various income generating activities that they could venture into.

The SLCS also helps in finding a ready market to purchase the crop from the peasant farmers. At the moment, measures are being put in place to ensure that Mfuwe chilli is branded with its own logo, while a market of up to six tonnes of chilli per year has already been secured....


Like bee powered development, it appears the key constraint facing many rural dwellers is "market discovery". There are many good opportunities for income creation in rural areas, but locals are just not aware of the opportunities or they struggle with discovering the profitable markets. We have chronicled many on these opportunities on this site from handicrafts to jewellery to mushrooms. The list is endless. Although organisations like SLCS are doing their bit to unlock the potential that exists, I think our government can learn from what the Namibian government has been doing with village tourism. It can take a more proactive role at the local level working with communities to identify their local assets and solving the coordination and "market discovery" failures that exist. These in my view are among the strongest binding constraints at the local level, and overcoming them probably involves very little expendire compared to reducing fuel prices or providing pots of loans. Its just about filling in the knowledge gap.

5 comments:

  1. Literacy and universal access to the internet should help.

    ReplyDelete
  2. Cho,

    Between the bee powered development, crocodile powered development, and now the chilli powered development, it is safe to say that a lot of Zambia's future is going to be in agriculture.

    I am thinking of a model of 100 hectare farms, run by a single family, and parttime labourers. This would be part of a 400 farm complex.

    This would revolutionize agriculture.

    The way I envision it, is to have chiefs directly involved and benefiting from this development.

    The business model would be as follows:

    1) Workers are paid first and receive 20% of what they have produced minus cost.

    2) The farming families (management) receives 80% of what is produced, and pay 20% of that to ownership.

    3) Owners collect 20% of what is left after the workers are paid (which is 16% of total profits).

    4) All payments on the farm must be made through an independent auditing firm or a specific bank account, so all payments can be monitored and have a paper trail.

    This model allows workers to gain experience, build some savings and make a reasonable living; they also form a reservoir that new farmers can be drawn from. The farmers (management) collect most of what is produced on their farm, which they can funnel into new enterprises - greenhouses, tree plantations, dairy operations, manufacturing. Company owners do no work, they just put up the original capital or generate the original idea (hint) and a considerable number of shares should belong to the local chief, giving him/her an income independent from the government.

    The government could make the company new form of business, which would be largely tax exempt, apart form the ownership - no income tax for labour or management, tax exemption for farm equipment, etc. If they can create 'free trade zones' for foreign corporations, they can do the same for rural companies that bring development, slow urbanisation, add to the food supply, reduce rural unemployment and poverty and generate new businesses.

    Ownership would own the business (shares and profits after payment of workers and farmers), but the farmers would own title to the farm as long as they are employed by the business. This would give the farmer some protection against local politicians, developers, foreign investors. (I would need to work out more details on this issue.)

    Chiefs could be directly involved in hiring farmers, receiving profits and directing development. The companies could be called "Royal Development Corporations" (RDC's). They would be largely tax exempt, but would benefit the state by providing food, jobs and businesses, reversing urbanisation, and generally stabilizing the economy. Chiefs would be strictly prohibited from receiving income from these companies beyond what they are due as shareholders. They would operate within a chiefdom (hence the title) and would help giving chiefs a say in how development takes place, within the boundaries of the specific concept.

    I think this idea could become popular as food becomes more expensive. There are already ways to be elligible for capital, in the context of global warming (more details later).

    What I would like to see, is organic, sustainable agriculture, which is relatively labour intensive, which will provide a lot of people with a good income, and that can be sustained for centuries to come. The thing with organic agriculture is that it improves the soil, instead of depleting it as chemical based agriculture does. Also, there are a lot of interesting things that can be done with regards to hydrology, in that the increased presence of water deepens the soil and makes year-around agriculture possible, which in itself doubles yields.

    The biggest capital investment would be in improving hydrology (digging swales, ponds, restocking aquifers, keyline design, etc.), farm buildings, equipment (which can be shared) and building feeder roads. However, there are ways of paying for this too, and for the government to profit from it.

    A pilot RDC could also house a Keyline Design school, which would spread methods of sustainable commercial organic agriculture throughout the country and region.

    I think a company that size could have a turnover in the $10 million range easily and would employ upward from 1000 people when fully operational.

    You are Kazembe's nephew - would this fly in Northern Province?

    ReplyDelete
  3. I think the idea can work. Sounds very interesting.

    It appears though that it relies a lot on tax breaks - that may not go down well with the commercial farmers...how would be handled?

    Local knowledge...from what you have described this does not require much training....but my view is that we need to UP the knowledge curve in any model..so I favour not just expanding production but expanding people's knowledge of agriculture practice.... or do you think that is not necessary in the short term?

    The other issue is being clear on what is grown...

    I mean in Luapula..we have water...and I suspect that is where our comparative advantage lies...how would your model work with that?

    ReplyDelete
  4. oh...Mwata is a cousin...not my uncle...!

    lol!

    ReplyDelete
  5. It appears though that it relies a lot on tax breaks - that may not go down well with the commercial farmers...how would be handled?

    In the short term frankly they'll have to put up with it, just like the manufacturers did when the free trade zones were created for FDI. In the long run, they too will benefit from the presence of more skills, services and infrastructure in the rural areas, as well as the markets that are going to be opened up. And they will have many more skilled workers to employ.

    Local knowledge...from what you have described this does not require much training....but my view is that we need to UP the knowledge curve in any model..so I favour not just expanding production but expanding people's knowledge of agriculture practice.... or do you think that is not necessary in the short term?

    There could be all kinds of courses. Education for farmers would be a very stripped down first two years of agricultural school, especially as most people will already have a lot of experience with agriculture. They would have to learn how to do things on a larger scale and business/accounting skills, basic mechanics, construction, safety and first aid.

    Laborers wouldn't need much training and learn on the job, or could take individual courses as required.

    The other issue is being clear on what is grown...

    I think there should be a minimum of 50% of these farms dedicated to the staple crop. Other than that, there is a whole range of products that can be grown on the other 50%. That kind of crop diversity combined with crop rotation plays a big role in preventing the spread of crop diseases. Which in return makes possible reducing inputs like pesticides, herbicides, etc. which makes the farm more selfsufficient. Natural pesticides (neem trees for neem oil, predatory insects) could be grown on the farm itself.

    I mean in Luapula..we have water...and I suspect that is where our comparative advantage lies...how would your model work with that?

    I think this model would be extremely flexible and could be applied to aquaculture. It would already involve a lot of stocking of ponds with water during the rainy season, which could be used to grow fish, or be used raising crocodiles (see above).

    Also agroforestry is a very lucrative option.

    The basic principle is that the biggest rewards go to management, because it makes more money available to the persons most likely to start more businesses. The farmers would basically run their farm as a business, and start new businesses on their land. The person who runs that business would receive 80% of profits, and pay 20% of that to the farmer.

    oh...Mwata is a cousin...not my uncle...!

    lol!


    Ok, my mistake. :)

    ReplyDelete

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