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Thursday, 8 December 2011

Why have farming subsidies failed to reduce poverty?

The past two years are a tribute to Zambian farmers: they have responded admirably to government efforts to promote maize production. Being the most important staple food in Zambia, maize surpluses contribute to food security and benefit the nation. But the smallest farmers in Zambia— those cultivating less than 2 hectares who account for over 70% of all the smallholder farms in the country —participated only marginally in the maize production expansion of 2010/11. These farmers received relatively little FISP fertiliser and sold very little maize, hence they were unable to benefit from the FRA producer price of 65,000 kwacha per bag. The farmers benefiting the most from the government’s expenditures on supporting maize prices were clearly those selling the most maize.

This disaggregated picture of Zambia’s maize production expansion may reveal why rural poverty rates remain so high despite the record maize harvests in the past two years. The benefits of the two main poverty reduction programmes have been enjoyed disproportionately by the larger smallholder farmers who received more subsidised fertiliser per farm and sold substantially more maize than the 73% of farmers cultivating less than 2 hectares. In fact, about 30% of the relatively poor smallholder households actually had to purchase more maize and maize meal than they produced to meet their families’ food needs and hence were adversely affected by a support price
policy that raised maize prices in the countryside.
From a recent FSRP policy synthesis paper - Mountains of Maize, Persistent Poverty.  The authors go on to recommend that future efforts to reduce rural poverty by the new government could focus on targeting subsidised FISP fertiliser to the smallest farmers. This would provide them with greater opportunities to produce a surplus and benefit from FRA support prices. Targeting subsidised fertiliser in this way would have a greater likelihood of reducing rural poverty. It all seems fairly obvious, but it was not so obvious to the last government. 


  1. we are coming as Diamondale Foundation Inc
    we are starting a project in Kungu Village in Kasama. we will loan fertilizer and provide Tractors to help cultivate the land for the community.

    check us at
    at the moment we are based in USA

  2. How about growing more crops that don't require as much fertiliser and irrigation as maize ? Isn't that fairly obvious ?

  3. Preposterous suggestions in the article disregarding the fact these same 'disadvantaged rural farmers' went ahead to produce bumper harvests in three consecutive seasons,despite these claims.

    Give credit where it is due. You can trash what is clearly an unprecedented fit which should be built on by any serious minded regime. Hope they see this than this myopic view.

  4. There are other beneficiaries of the bumper maize harvest. The maize surplus created a beef shortage due to the fact that nobody sold cattle to avert starvation. The beef shortage increased the beef price which increased demand for chickens, goats, pork and eggs. This in turn increased stockfeed requirements which created a soya shortage. Millers are now importing soya and offering forward contracts for farmers to grow soya.
    I think the huge subsidy of maize production is too expensive and wrong but there are many benefits to it beyond just the growers of maize.
    One alternative would be providing more employment in towns which would end the low prices which keeps production low.
    There are many many other cheaper ways to produce a food surplus starting with farmer education and continuing through extension services, crop and livestock diversification, organic and conservation farming, better irrigation methods and so on. Its not impossible, its just often not profitable to produce a cetain item and then people with any business sense don't. Maize shortages can be caused by bad weather or expensive inputs but are also often caused by low prices. If the price in November is below cost of production only the financially ignorant will plant.


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