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Monday, 6 February 2012

Opportunity Cost of FRA

Brian Tembo helpfully reminds us that the money being spent on the current agricultural regime is not "free":
"According to research, there is also no impact on poverty reduction. This should tell the government that if you are not getting anything, then there is something wrong. What us Zambians and the new government need to understand is that for a lot of money being spent on maize, there is a school that hasn't been built; drugs that haven't been built and many more...The government spends about US $500 million to purchase maize from the farmers which they do not even have capacity to store. There is no return on the investments made in the manner that the government has made on maize. About 40 per cent of budget on agriculture spent on input support."
We have previously touched on Zambia's broken maize marketing policies. Our prayer must surely be that this madness started by the previous Government is brought to a quick end sooner rather than later. 


  1. Return of The Imbangala6 February 2012 at 16:32

    Unfortunately the PF govt is the most visionless govt to have ever run Zambia. And for this reason, I dont expect this lot to have any solutions. Besides the 'problem' does not involve 'fighting someone' so it is less attractive for the PF govt to expend any effort on. Herein lies the solution. During the planting season i.e October to early December, inputs were not delivered to all the intended receipients and by so doing the PF half solved the problem. The only Agriculture policy they have implemented with a lot of zeal was to order the export of 1m tonnes of Maize harvested under the 'incompetent' MMD administration.

  2. I don't know who did the research showing no impact on poverty reduction. Its simply not true. Fertilliser and mealie meal subsidies have benefited a lot of people, mostly indirectly. Rural food security has vastly improved. Its just that the current set up is not a very effective method and extremely expensive. There are cheaper more effective ways to reduce poverty. We are also subsidising neighboring countries at our taxpayers expense.
    In my opinion the subsidy on fertiliser must be gradually reduced but made more widely available. The subsidy on mealie meal should be removed as it benefits large millers and hurts small scale ones. Crop diversification is important. We need a decent, working extension system and widespread farmer education.We need access to affordable credit so that others can participate in maize purchasing.
    More money should be spent on rural road maintenance (grading not tarring)so that transport costs come down.
    But the most important thing a government can do for a farmer is to improve employment levels in the country. More jobs = more consumers = better markets=better prices.
    I am not seeing any debate on the best way to go about job creation. Instead people are agitating for higher wages which in the absence of higher productivity or profits reduces employment.


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