Africa Region Working Paper Series No. 85 Poverty Reducing Potential of Smallholder Agriculture in Zambia: Opportunities and Constraints Prepared by Paul B. Siegel Jeffrey Alwang for Social Development Department (SDV) The World Bank Washington, DC, USA July 2005 34246 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
Transcript
Africa Region Working Paper Series No. 85
Poverty Reducing Potential of Smallholder Agriculture in Zambia:
Opportunities and Constraints
Prepared by
Paul B. Siegel Jeffrey Alwang
for
Social Development Department (SDV)
The World Bank Washington, DC, USA
July 2005
34246
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Poverty Reducing Potential of Smallholder Agriculture in Zambia:
Opportunities and Constraints
Africa Region Working Paper Series No. 85 July 2005
Abstract
The objective of this paper is to investigate poverty-reducing potential of smallholder agriculture in Zambia, considering suggested public actions expected to stimulate broad-based growth in the rural economy. This paper was prepared as part of the Poverty and Social Impact Analysis (PSIA) work carried out to inform the Zambia Country Economic Memorandum (CEM). Following PSIA guidelines, it combines quantitative and qualitative analyses from a variety of sources Several analytical techniques are used to examine opportunities and constraints facing typical Zambian smallholders. These include enterprise budgets, a smallholder household model, and reviews of recent studies. Using a one-period linear programming model of agricultural production activities by smallholder households, the authors examine potential impacts of land tenure reforms, changes in fertilizer policy, infrastructure investments, and HIV/AIDS on land and labor use and income-generation. Based on the results of the smallholder model and other analysis, the authors are not very optimistic about the potential for agriculture-led poverty reduction, especially in the short term. A major transformation is required for smallholders’ agricultural potential to become reality. Large-scale investments are needed in research and extension, market and transport infrastructure, capacity-building for individual farmers and groups of farmers, and more. These investments require time to reach fruition. Policies to stimulate non-agricultural economic activities in rural areas should also be explored. Although high seasonal labor demands create bottlenecks at key times, there is an opportunity to spread labor more evenly through the year as a means to increase household incomes. In all cases, a more comprehensive and holistic approach to rural development is needed, not just an agricultural or commodity-specific strategy.
The Africa Region Working Paper Series expedites dissemination of applied research and policy studies with potential for improving economic performance and social conditions in Sub-Saharan Africa. The series publishes papers at preliminary stages to stimulate timely discussions within the Region and among client countries, donors, and the policy research community. The editorial board for the series consists of representatives from professional families appointed by the Region’s Sector Directors. For additional information, please contact Momar Gueye, (82220), Email: [email protected] or visit the Web Site: http://www.worldbank.org/afr/wps/index.htm. The findings, interpretations, and conclusions in this paper are those of the authors. They do not necessarily represent the views of the World Bank, its Executive Directors, or the countries that they represent and should not be attributed to them.
Acknowledgement Guidance for this research was provided by Steen Lau Jorgensen (Sector Director, SDV) and Zlatina Loudjeva (Junior Professional Associate, SDV). Research assistance was provided by Mr. Sibusiso Moyo, a graduate student at Virginia Tech. Dr. Mwape, of UNZA in Zambia, prepared a background paper on cropping patterns and crop budgets that was a valuable resource. Helpful comments were received from Abebe Adugna (AFTP1), Stefano Paternostro (PRMPR) and Anis Dani (SDV). Administrative support was provided by Milagros Benedicto (SDV). Editorial assistance was provided by John-Paul Ferguson. Any errors are solely the responsibility of the authors, as are all the opinions.
This paper was prepared as part of the Poverty and Social Impact Analysis (PSIA) work carried out to inform the Zambia Country Economic Memorandum (CEM). Funding was provided by the Norwegian government. The original draft of this report was delivered in June 2003. Revisions of the original draft report were coordinated with Abebe Adugna (AFTP1). Momar Gueye provided logistical support.
More information on the PSIA approach can be found at: : www.worldbank.org/psia
ACP Agriculture Commercialization Programme ASIP Agricultural Sector Investment Program CEM Country Economic Memorandum CF Conservation Farming CIF Cost, Insurance and Freight CLUSA Cooperative League of United States of America CSO Central Statistics Organization FHH Female-Headed Household FAO Food and Agricultural Organization GRZ Government of the Republic of Zambia Ha Hectare HH Household HYV High Yielding Variety IDS Institute for Development Studies Kg Kilogram Km Kilometer LP Linear Programming MAC Ministry of Agriculture and Cooperatives MAFF Ministry of Agriculture, Food, and Fisheries. MHH Male-Headed Household Mt Metric Tons NGO Non-governmental Organization PHS Population and Health Study PRSP Poverty Reduction Strategy Paper PSIA Poverty and Social Impact Assessment ROADSIP Road Sector Investment Project ZK Zambian Kwacha
TABLE OF CONTENTS
EXECUTIVE SUMMARY ............................................................................................................. I
Background and Objectives .................................................................................................... 1 Structure of the Agricultural Sector........................................................................................ 2 Constraints to Smallholder Production ................................................................................... 4 Changes in the Agricultural Sector since the 1990s ............................................................... 6
2. THE SMALLHOLDER MODEL......................................................................................... 15
Model Description ................................................................................................................ 15 Main Findings from the 1994 Baseline Model and Scenarios.............................................. 16 Updating the Model in View of the Changes in the 1990s ................................................... 17
Updated Baseline Model....................................................................................................... 19 Stylized Policy Reform Scenarios ........................................................................................ 21 Model Results ....................................................................................................................... 22 Beyond the Model: Moving into Higher Value Crop Activities and Conservation Farming25
4. SUMMARY AND CONCLUSIONS ................................................................................... 28
Looking Ahead: Tapping Smallholder Potential .................................................................. 28 Suggestions for Further Research ......................................................................................... 30
Table 1: Typology of Agricultural Producers in Zambia.............................................................. 36 Table 2: Estimated Shares (percent) of Zambian National Production by Typology of Producers
............................................................................................................................................... 36 Table 3: Major Agro-Ecological Zones of Zambia...................................................................... 37 Table 4: Distribution of Rural Households, Land per Household and Agricultural Activities, by
Province ......................................................................................................................... 37 Table 5: Major Smallholder Crops in Zambia 2000 – 2002 and Distribution by Province......... 38 Table 6: Estimated Composition of Zambia’s Agricultural GDP (percent) ................................ 38 Table 7: Major Crops in Southern, Eastern and Northern Provinces (in hectares)....................... 38 Table 8: Baseline model results ................................................................................................... 39 Table 9: Model results with land constraint, output and input price adjustments ....................... 40 Table 10: Model results under remoteness scenario, Eastern Province....................................... 41 Table 11: Labor decreased by 20 percent (columns 2 and 4). ..................................................... 42 Table 12: Net incomes by crop, financial model ......................................................................... 43 Table 13: Net incomes by crop, financial model ......................................................................... 43 Table 14: Comparison of Yields, Inputs, Labor, and Returns of Different Smallholder Crops
1994/5 and 2001/2....................................................................................................... 43
Table 15: Estimated Costs of Entry into Commercial Farming for Selected Enterprises ........... 44
Figure
Figure 1: Maize land planted and total production, 1993-2002................................................... 45 Figure 2: Land planted to various crops, 1993-2002 ................................................................... 46 Figure 3: Production of various crops, 1993-2002 ...................................................................... 47 Figure 4. Impacts of landholding on net returns .......................................................................... 47 Figure 5: Impacts of increased labor availability on net returns and acreage under cultivation,
hand-hoe and oxen technology households. .................................................................. 48 Figure 6: Impacts of cash constraints on model solution, Eastern Province. .............................. 48 Figure 7: Impacts of fertilizer price changes on model solution, Eastern Province. ................... 49
Boxes
Box 1: Agricultural Performance Since the mid-1990s................................................................. 6 Box 2: Fertilizer Prices and Maize Production .............................................................................. 8 Box 3: Inter-relationships Among Constraints in Fertilizer Supply .............................................. 9 Box 4: Changes in Agricultural Production Patterns................................................................... 10 Box 5: Data Constraints in Zambia Limit Analytical Techniques............................................... 16 Box 6: Using the Smallholder Model for Policy Dialogue with and Stakeholders ..................... 16 Box 7: Resettlement Schemes: Urban to Rural Migration........................................................... 28 Box 8: Needs for Sustainable Smallholder Farming Systems ..................................................... 29 Annexes ANNEX A:.................................................................................................................................... 53 ANNEX B..................................................................................................................................... 56
EXECUTIVE SUMMARY
Zambia’s recent Poverty Reduction Strategy Paper (PRSP) views development of the
agricultural sector as a critical pillar for rural growth and poverty reduction. The PRSP proposes, inter alia, improving the land tenure system, liberalizing fertilizer markets, and improving rural infrastructure. These actions are expected to stimulate broad-based growth in the rural agricultural economy.
Given the importance of agriculture to the livelihoods of rural Zambians, most poverty reduction strategies focus on improving income generation through agriculture. Since smallholder agriculture predominates throughout the country, the impacts of policy reforms and investments on smallholders will, to a large extent, determine effectiveness in reducing rural poverty. An important consideration is whether agriculture can be a viable poverty exit strategy for rural households in Zambia.
The objective of this paper is to assess the poverty-reducing potential of smallholder agriculture in Zambia, in light of suggested public actions. Several analytical techniques are used to examine the opportunities and constraints facing typical smallholders. These include basic enterprise budgets, a smallholder household model, and reviews of recent studies. This paper was prepared as part of the Poverty and Social Impact Analysis (PSIA) work carried out to inform the Zambia Country Economic Memorandum (CEM). Following PSIA guidelines, it combines quantitative and qualitative analyses from a variety of sources (see World Bank, 2003a).
Most traditional smallholder crops in Zambia, such as local maize, groundnuts and cotton, have low input costs, but also relatively low returns. Given the lack of dependable input and output markets and high prices of inputs relative to outputs, the low-input low-return strategy is an economically rational strategy for smallholders, especially those located in remote areas. In many cases, labor and credit constraints dominate land constraints. Higher-value crops, such as paprika and tobacco, have higher cash-input and labor demands. Conservation farming, a minimum tillage technique that is gaining popularity because it increases the efficiency of inputs, can also require additional purchased inputs and labor. Furthermore, the prices of many higher-value crops stagnated or fell since 1994, while input costs tended to rise.
Crop budgets for commercially oriented emergent farmers and large-scale farmers might show more promise to increase incomes, but initial investments and operating costs for such enterprises require substantial outlays. Complementary infrastructure and support services are also needed. Hence, a major transformation of smallholder agriculture faces serious constraints. Although adoption of improved technologies by smallholders might contribute to improvements in household food security and supplement incomes, given their limited assets, they cannot be expected to make major contributions to reducing rural poverty -- especially in the short term.
ii
The negative impacts of HIV/AIDS on labor availability and increased dependency ratios have exacerbated the constraints facing many smallholder households.
Using a single-period linear programming model of agricultural production activities by smallholder households, we examine the potential impacts of land tenure reforms, changes in fertilizer policy, infrastructure investments, and HIV/AIDS on land and labor use, and income-generation. Major findings include:
• Food security concerns imply a significant (real and opportunity) cost, even though staple food production to assure food security is the main goal of most smallholders, especially in remote areas.
• Using hoes and oxen, smallholder households can only cultivate about two to four hectares of land, respectively, before household labor constraints become binding. Increased access to land would therefore not benefit most households unless hired labor became available at a relatively low cost. Labor-saving technology may substitute for labor and allow for improved labor allocation. Or technologies such as conservation farming can help spread out labor demand more evenly though the year. However, the “entry costs” of such technologies may be prohibitively expensive for the majority of resource-poor smallholders.
• Higher official market prices for fertilizer and lower prices for maize have made hybrid maize production less economically attractive for smallholders. Lower maize/fertilizer ratios and the continued lack of dependable input supplies have slowed the adoption of improved technologies and encouraged a “retreat” to semi-subsistence farming, especially in remote areas.
• For most smallholders, there are relatively low returns to farming—less than $1 per person per day. This low return to labor makes it difficult to generate surpluses that could be saved or invested in improved technologies, and thus contributes to a cycle of poverty.
• Market liberalization and commercialization increases the need for cash, other liquid assets, or credit. The scant amounts of cash available and the high returns to cash suggest that returns to and demand for credit will likely be robust.
• Improved infrastructure should, in theory, lower transport and transaction costs, and increase the commercial orientation of smallholders. However, lower costs might not compensate for the drop in output prices and rise in input costs that have hurt smallholders. Thus, the incentives to diversify into higher-value crops using improved technologies are limited, and further constrained by the lack of credit.
• Remoteness leads to less land under cultivation, lower returns per household member and
lower returns to land. This indicates the welfare costs associated with remoteness. Improved transport should benefit remote households and encourage more intensive and extensive utilization of land, and higher income-earning potential.
iii
• Improved infrastructure may also increase confidence in markets. Such confidence could, over time, reduce the tendency of smallholders to allocate scare resources to the production of staple foods for own consumption. The combination of less remoteness and increased confidence in the market can lead to significant improvements in household well-being. The food security constraint severely lowers household returns, and its “removal” should allow smallholders to produce higher-value crops instead of traditional low-value staple crops. Over time, these households might adopt improved technologies and possibly increase their demand for land.
• HIV/AIDS and other serious illnesses will likely continue to negatively impact household welfare. Labor reductions lead to less land under cultivation and more staple foods as a share of total crops. Purchased inputs increase as a share of the total value of production, indicating some substitution of purchased inputs for scarce labor.
Land reform that increases access to land can not be expected to help most smallholders.
The “land as collateral” argument, whereby access to land helps guarantee loans, needs to be examined, and alternative means of financing (e.g., micro-finance, contract farming) should be considered. The absence of affordable transport and more dependable markets are interrelated, and make fertilizer reform per se a questionable exercise. How would the reform of fertilizer markets affect the price and availability of fertilizer? Access to fertilizer appears to be more important than its price. Improving transport and access to markets is necessary for improving rural welfare, but complementary investments in labor and financial markets are also required. New opportunities from higher value crops and conservation farming hold out some promise for smallholders, but high costs of entry and are a constraint.
Based on the results of the smallholder household model and other analysis, the authors are not very optimistic about the potential for smallholder agriculture-led poverty reduction, especially in the short term. A major transformation is required for smallholders’ agricultural potential to become agricultural reality. Large-scale investments are needed in research and extension, market and transport infrastructure, capacity-building for individual farmers and groups of farmers, and more. These investments require time to reach fruition. Policies to stimulate non-agricultural economic activities in rural areas should also be explored. Although high seasonal labor demands create bottlenecks at key times, there is an opportunity to spread labor more evenly through the year as a means to increase household incomes. In all cases, a more comprehensive and holistic approach to rural development is needed, not just an agricultural or commodity-specific strategy.
1. INTRODUCTION
Background and Objectives
Zambia’s recent Poverty Reduction Strategy Paper (PRSP) views the agricultural sector as a critical pillar for rural growth and poverty reduction. “Agriculture is given the highest priority in the PRSP for diversifying production and exports, creating employment, increasing incomes, and improving food security (World Bank, 2002a, p.7).” To stimulate broad-based agricultural growth the PRSP proposes, inter alia, improving the land tenure system, liberalizing fertilizer markets, and expanding rural infrastructure (notably roads) through a combination of policy reforms and investments.
There is optimism about the potential for Zambia’s agricultural sector to be an engine of growth (see, for example, World Bank, 2003b). This optimism is based on the country’s abundant and underutilized land and water resources, and rural labor force. Although Zambia’s agricultural sector has significant untapped potential, it is characterized by structural problems and risks that constrain realization of that potential. The smallholder sector, which accounts for over 90 percent of rural households, faces unique constraints.
Most rural residents are smallholders who derive most of their income from agriculture. There is a general lack of non-farm, non-agricultural activities in rural Zambia (Milimo, Shilito, Brock, 2003; Skjonsberg, 2003). Given the importance of agriculture to the livelihoods of rural Zambians, most poverty reduction strategies focus on improving income generation through agriculture. Since smallholder agriculture predominates throughout the country, the impacts of public actions on smallholders will, to a large extent, determine effectiveness in reducing rural poverty.
The objective of this paper is to investigate the poverty-reducing potential of smallholder agriculture in Zambia, in light of suggested policy changes and investments. This paper was prepared as part of the Poverty and Social Impact Analysis (PSIA) work carried out to inform the Zambia Country Economic Memorandum (CEM). Following PSIA guidelines, this study combines both quantitative and qualitative analyses from a variety of sources (see World Bank, 2003a). We first review major changes that have taken place in the agricultural sector in Zambia since the early 1990s, with particular focus on changes in the smallholder sector. Results from an analysis undertaken for the 1994 Zambia Poverty Assessment using a smallholder household model are also reviewed. The model has been updated to examine the current opportunities and constraints facing typical smallholder households. We examine impacts of proposed reforms and investments for land, fertilizer and infrastructure on typical smallholder households. In addition, we examine impacts of HIV/AIDS on smallholder households. An important consideration is whether smallholder agriculture can generate sufficient surpluses to generate a virtuous cycle and lift rural households out of poverty
The model captures many of the major features of the smallholder decision making environment, but other important factors are not easily modeled. Thus, we also examine findings
2
from other quantitative and qualitative studies and discuss their implications with respect to the model parameters, scenarios, and results. The paper concludes with policy implications and suggestions for future research.
Structure of the Agricultural Sector
Structural problems are manifested in the dualistic structure of the Zambian agricultural sector.1 Dualism has been influenced by historical factors – which are beyond the scope of this paper (see Jensen, 1977). In addition, policy incentives and investments in public infrastructure have contributed to the differentiation in crop and livestock enterprises among different types of farmers.
The overwhelming majority of Zambia’s agricultural producers are smallholders, who use simple technologies (hand hoes and oxen) and cultivation practices (minimal purchased inputs such as hybrid seed or fertilizer). Productivity on smallholder farms tends to be relatively low. They mainly produce rain-fed maize, groundnuts, roots and tubers, primarily for own consumption on five or fewer hectares (see table 1). Most lack access to functioning input and output markets and support services.2 It is estimated that only 40 percent of smallholders sold crops during the 1999-2000 season (World Bank, 2003b).
At the other extreme are large scale commercial farms using modern inputs with access to global input and output marketing chains. In some cases, large commercial farms are vertically integrated with agro-processing (Francis, et al., 1997; World Bank, 2003b)3 More commercially oriented medium-sized (“emergent”) farmers use animal traction, hybrid seed and fertilizer to grow rain-fed crops. Some attempts are being made to introduce micro-irrigation for emergent farmers and some smallholders.
Zambian producers can also be differentiated by the types of crops they produce. Smallholders tend to produce low-value-to-weight food staples, including about 60 percent of the country’s maize, 90 percent of sorghum, 85 percent of groundnuts and virtually all the cassava and other starchy staples (see table 2). Smallholders produce some higher-value cash crops, such as cotton, tobacco and paprika, and have small livestock, primarily poultry and pigs for home consumption. The differentiation of crops and livestock by producer type is largely a function of the higher capital requirements for higher-value enterprises. Emergent and large-scale producers generally have better access to markets and infrastructure. Land tenure arrangements also
1 The structure of Zambia’s agricultural sector is dualistic with respect to technology, cultivation practices and market orientation, crops produced, locational factors such as agro-ecological conditions and proximity to transport and markets, and the distribution of land and other household assets (e.g., human capital and financial assets). 2 The GRZ’s “Agriculture Commercialization Programme” (ACP), which was designed to implement the agricultural component of the PRSP specifically notes problems with input and credit markets, which “were not adequately addressed in the PRSP (GRZ, 2001, p.7).” 3 Emergent and larger-scale farmers use hired labor and contribute to national agricultural production and exports, but their relative small numbers and reliance on labor-saving technologies limit their contributions to poverty reduction. However, as mentioned in the final section on suggestions for additional research, more empirical information is needed on the labor generation and linkages of emergent and larger scale commercial farmers.
3
differentiate producers and affect access to credit. Commercial farmers have title to lease state lands, while smallholders produce on lands under customary tenure. Customary land is distributed by chiefs, which can lead to more or less land access and security, depending on factors such as types of marriage/social organizational systems and ties, legth of residence, and the integrity of chiefs.
Crop and livestock patterns are influenced by agro-ecological zones. Zambia can be divided into three major agro-ecological zones (see table 3). Region II, including most parts of Central, Southern, Eastern, and Lusaka Provinces has the most favorable agro-ecological conditions in terms of rainfall, soil quality, and absence of tse-tse fly that allow for a diverse mix of crop and livestock enterprises.4 Besides agro-ecological factors, another important locational factor is proximity to the “line-of-rail” and major urban centers and markets. The railroad line runs from copper mine areas in the Copperbelt to Southern Province. As mentioned previously, most commercial farms are located close to the line-of-rail, whereas many smallholders are located in more remote areas with less favorable agro-ecological conditions. Region I, has drier conditions than Region II and has experienced numerous droughts since the early 1990s.
Eastern and Northern Provinces contain the most rural households (see table 4), but farming systems greatly differ in the two areas. Eastern Province, known as the “maize basket,” is characterized by relatively more productive smallholders and widespread livestock production, and has higher population and less land abundance than other areas of the country. Northern Province (Region III) has higher rainfall and more humid conditions and problems with soil acidity and declining soil fertility5 Land is relatively abundant in Northern Province and shifting cultivation (e.g., slash and burn) has been widespread until recently, and is still the norm in some areas. Unlike other areas of Zambia, cassava (and not maize) is the major food staple. Conditions in Southern Province are fairly similar to Eastern Province (tradition of maize and livestock production), except for less rainfall. Southern Province contains the third most rural households and is of special interest because there are relatively abundant land and water resources. Southern Province is an area where cotton production has expanded in recent years, and there has been some growth in the number of emergent and commercial farmers. Western Province is the driest area of Zambia. Northwestern Province, in contrast, has high rainfall and conditions are more similar to Northern Province. Central and Lusaka Provinces have agro-ecological conditions similar to Eastern and Southern Provinces, and are located along the line-of-rail.
4 Average yields vary substantially among provinces. In general, yields are higher in agro-ecological zone II for most crops. Higher yields are due to more favorable agro-ecological conditions and the fact that much of this zone is located along the “line-of-rail.” This area has better access to infrastructure, higher use of inputs, and a higher share of medium- and large-sized farms using improved technologies. 5 Northern Province accounts for 20 percent of Zambia’s land area and about 14 percent of the population. The poverty rate is about 80 percent, and non-agricultural employment is virtually non-existent. There is relatively high rainfall, but the highly acidic soils need lime in addition to fertilizer. Since the early 1990s the province’s maize output has fallen to less than one-half of pre-reform levels. In the absence of fertilizer, some smallholders have reverted to “slash-and-burn” and growing cassava. Coffee and sugar plantations are relatively minor, yet important. Sheshami and others (2002) identified the major constraints on agricultural production in Northern Province as poor infrastructure and market integration, and the lack of irrigation, safe water and sanitation and credit.
4
On average, rural households have access to approximately three hectares of land (see table 4). This amount of land should allow households, in most areas, to produce enough food staples and other foods to cover consumption needs. Access to land and the quality of land, however, varies by Province. The lowest mean access to land is in Northwestern Province and the highest is in Central. Eastern and Southern Province have areas (notably near line-of-rail or towns) that are relatively densely populated and average land availability per household is often insufficient to cover food staple consumption needs.
Constraints to Smallholder Production
In the past, price and institutional factors made maize production an economically viable activity for farmers throughout the country. Subsidized maize and fertilizer prices and pan-territorial pricing, maize-biased public agricultural research, extension and credit systems all contributed to maize being produced in areas not particularly suited for it. Past policies encouraged dependence on maize as a staple food and on government institutions for marketing, extension and credit. Over-cultivation led to decreasing soil fertility, natural resource degradation and inefficient use of human resources. Deininger and Olinto (2000, p.3) note: “Producer subsidies for fertilizer led to the extension of maize cultivation into unsuitable areas which increased vulnerability to drought, distorted factor prices, and biased the direction of research away from high value export crops to staples with low profitability.”
Despite its low value, economic logic influences smallholder decisions to produce maize, primarily for home consumption. “The low value to weight ratio of maize adds to the profitability of producing for own or local consumption, while at the same time restricting opportunities for sale to urban consumers with good market access (Copesake, 1997, p.24).” As long as markets are poorly integrated and transaction costs high for low value food staples (like maize), in remote areas the costs of such staples is relatively high.6 In fact, there is evidence that most smallholders practice a “safety-first” strategy to allocate household assets first to producing enough food staples for own consumption and only adopt a profit maximizing strategy once food requirements are fulfilled (See Alwang, Siegel, and Jorgensen (1999)).
Deininger and Olinto (2000) highlight the constraints to increased productivity and adoption of higher-value crops faced by Zambian smallholders. They note:
i. Purchased inputs and adoption of improved technology can be profitable, but non-price factors—such as the lack of markets for timely buying and selling, and the lack of support services like credit and extension—hinder increased productivity.
ii. Under conditions of land abundance, access to complementary productive assets is a key constraint on productivity, the amount of land cultivated, the use of credit and purchased inputs, and adaptation to climatic risks.
6 Loy and Wichern (2000) examined regional and international integration of maize markets in Zambia to test whether the liberalization policy has led to integrated food markets. Results indicate that regional maize markets are integrated. However, the level of regional and international market integration is low and has not increased over time. Transaction costs in these markets are still high.
5
iii. “Constraints facing rural producers in Zambia are still related more to market access and the ability to obtain necessary inputs in a highly volatile economic environment rather than application of more productive technology. At the same time, this calls for a thorough assessment of the technology available and the messages that are being disseminated through public technical assistance (p.15).”
Deininger and Olinto (2000) conclude: “this reinforces the importance of providing
public goods, in addition to price policies, to bring about a sustained supply response much needs to be done to address non-price related constraints to agricultural production, generate and disseminate technology, and thus help rural producers make better use of the resources at their disposal.” For example, confidence in markets is a critical non-price factor. In the past, market imperfections such as the undependable and untimely availability of inputs and basic consumption goods have undermined market confidence, leading to conservative decision-making. Also, the lack of credit and insurance markets for smallholders slow the adoption of new technologies and/or new enterprise mixes. In addition, new technologies and crop enterprises often have relatively high initial investment costs, creating barriers to entry. These problems are exacerbated by the low value of surpluses and savings generated by smallholder agriculture, which preclude new investments in improved technology.
Risks Faced by Smallholders. Structural problems are exacerbated by numerous risks facing agricultural households. Risks include weather- and price-related fluctuations in harvests and crop prices, death or distress sales of livestock, and human health risks that affect labor availability. Smallholders tend to have greater exposure to risks and less ability to manage the risks.
Risk factors also affect smallholder decisions about crops, technology adoption, input use and productivity (Ruiske, et al.,1997). For example, since 1990, about three out of every 5 years have essentially been drought years in Zambia (Bwalya, 1999). Price and yield risks may undermine an emerging liberalized fertilizer market and “efforts to increase fertilizer use on small farms are plagued with fundamental problems such as climatic risk, a dearth of technology packages that are farmer tested to be profitable and risk-decreasing, especially in less-favorable agro-climatic zones; lack of technical and management skills and information on application rates and agronomic methods to increase efficiency and profitability of fertilizer use; high transport costs; underdeveloped credit markets; and risky output markets. Sustainable strategies for increasing fertilizer use must address these fundamental problems (Ruiske, et al., 1997, p.3).” Uncertainty with respect to input and output markets also influences decisions about crops, technology adoption, and input use (Gordon, 2000). Because of widespread risk and uncertainty, many Zambian smallholders have retreated to semi-subsistence farming systems in recent years. Smallholders also face risks related to human illnesses, and diseases and pests that affect crops and livestock. The proliferation of HIV/AIDS7 has highlighted health risks and impacts on household labor and dependency ratios, but rural Zambians have long suffered from many
7Research indicates that one in every four Zambian adults is HIV positive. The high incidence in rural areas has become more than a public health concern placing demands on limited household resources, exacerbating labor constraints, and lowering productivity (World Bank, 2003b; Pillai, Sunil, and Gupta, 2003).
6
illnesses, which affect labor availability, household composition and household production decisions.
Changes in the Agricultural Sector since the 1990s
Performance of the agricultural sector since reforms began in the early 1990s has been uneven. Reforms aimed at market and trade liberalization were expected to benefit smallholders, but evidence shows that the reforms harmed many such households, particularly those in remote rural areas (Evans, 2001). In particular, the collapse of markets for credit and inputs that followed liberalization seriously hurt smallholders. Reductions in government expenditures on transport and communication infrastructure compounded the problem. The collapse of expenditures on transport and communications appears to have exacerbated difficulties faced by rural households. This collapse discouraged the private sector involvement, and, as a result, many poor farmers were unable to exploit their agricultural potential. (McCulloch, Baulch, and Cherel-Robson, 2000, p. 31-32).
Many of the core weaknesses of Zambian agribusiness lie outside its own confines, in the forms of weak overall infrastructure within the country, an unstable and unpredictable exchange rate, extremely high costs of finance, and weak capacity of government to address trade-related anomalies and problems (World Bank, 2003b, p.xiii). For example, throughout the past 15 years, Zambia has experienced macroeconomic instability (World Bank, 2002b). Also, its public institutions for agricultural development (such as the Ministry of Agriculture and Cooperatives (MAC)) are weak and fragmented (World Bank, 2002b).
Many of the changes in the agricultural sector during the 1990s were the results of policy reforms, while others stem from factors such as changing conditions in international commodity markets and recurring droughts. These changes have had different impacts on technology adoption, enterprise mixes, profitability, and market orientation on different types of farmers (World Bank, 2003b). Below we highlight some of the changes that are relevant to smallholders - and our subsequent analyses.
Policy shifts
Major policy shifts in the 1990s include the dismantling of state institutions for marketing and distribution of agricultural outputs and inputs, the abolition of producer subsidies, the liberalization of trade in food items, and the introduction of market-determined input and output prices (see GRZ, 2001; World Bank, 2003b, p. 64-66 for details). It was hoped that these policy shifts could benefit producers of all sizes, but this has not been the case (janyne, et. Al., 1991,
Box 1: Agricultural Performance Since the mid-1990s. World Bank (2002b, p.5) highlights the following changes in performance of the agricultural sector since the mid-1990s: “The food production index fell from 130 in 1995 (1981=100) to 128 in 2001. Agricultural gross domestic product barely rose from 395 billion kwacha in 1995 to 419 billion kwacha in 2001. During this period, agricultural production fluctuated significantly around a stagnant mean. Agricultural productivity continued its long-term decline. Moreover, agricultural incomes fell from 70,000 kwacha to 62,000 kwacha in 2001. {However}… Agricultural exports increased dramatically, particularly of nontraditional exports such as horticulture and floriculture. The total value of agricultural exports rose from USD$55 million in 1995 to USD$ 160 in 1998, although it declined to USD$125 in 2001.”
7
SGS Zambia, 1999; Milimo, Shilito, and Brock, 2000). See box 1. Many cite the absence of private service providers and structural constraints to entering agricultural input and output markets as a major source of ongoing market imperfection and uncertainty (Smale and Jayne, 2004).
Land Policy Reform Initiatives8
Land reform has been on Zambia’s political agenda since independence in 1965. More recently the PRSP highlighted the need to amend the 1995 Land Act.9 The Draft Land Policy is an attempt to revise the act, but this initiative has stalled. Pre-independence the most fertile lands were designated “Crown Land” and reserved for the white settlers, while the less fertile, or “Reserve and Trust Lands,” were made available to blacks. Upon independence, the government repossessed and re-leased most of the land. Currently all land in Zambia is vested in the President, who holds it in perpetuity for and on behalf of the people of Zambia. Ninety-four percent of the land is under customary tenure, distributed by the chiefs. Customary tenure comprises more than 70 ethnic traditions and four types of marriage/social organizational systems, which affect access to land. The remaining 6 percent, which are held under state title, includes cities and towns, game reserves, mining areas and land set aside for commercial agriculture. Commercial farming areas constitute about half the state-titled land.
Considered a land-abundant country, the under-utilization and inefficient use of Zambia’s land base is perceived to be a problem. The PRSP explains the under-utilization of land is due, in part, to complicated procedures for obtaining title deeds and the lack of incentives to utilize (or sell) idle land (such as collectable land taxes). One factor influencing the re-evaluation of land tenure practices is the desire by GRZ to provide more land for commercial and emergent farmers. Demand for land by disenfranchised Zimbabwean commercial farmers is one factor driving this search for ways to better utilize Zambia’s idle agricultural natural resources. One suggested solution is the selling of 1,000-hectare “farm blocks” to qualified local businessmen/farmers to develop commercial agriculture. This would not require immediate reform of the customary land system, but could rather quickly get un-utilized lands under production and add to government revenues. The revenues from land sales could be used to support smallholder agriculture. The reform of traditional agricultural land tenure practices should strive to provide greater equity and efficiency in land use (especially equal access for women, new residents, and other groups whose rights to land are not protected in many cases).
8 Information on land issues is largely drawn sections of the Zambia PSIA draft report. 9 The 1995 Land Act tried to make customary land arrangements more efficient and equitable. The act introduced a Land Tribunal to address failures of customary land dispute-resolution systems and provide assistance for those who could not afford the courts. The tribunal was meant to balance the power of the chiefs; yet it has been moribund, and its impact has been marginal. The 1995 act also introduced a 30 percent community set-aside for women and other excluded groups and individuals.
8
Land quality issues are gaining prominence in Zambia. Despite claims of underutilization of land, in some rural areas with land scarcity there has been a trend toward continuous cultivation and reduced fallow. This has led to increases in soil acidity and decreases in fertility (Haggblade and Tembo, 2003). To maintain productivity, many need to apply lime and increasing amounts of fertilizer over time. Conservation farming, which we discuss later, is an effort to preserve and enhance soil quality and improve productivity and profitability – partly through more efficient fertilizer use.
Fertilizer Policy and Prices
The price of fertilizer more than doubled during the 1990s and fertilizer use fell by about one-half (Howard and Mungoma, 1996; Jayne, et al., 1998; Kherallah, et al., 2000, GRZ, 2002). See box 2.
Box 2: Fertilizer Prices and Maize Production
According to participatory studies in rural Zambia, increased fertilizer prices were the most commonly mentioned constraint on agricultural production in all agro-ecological zones in all years since 1992. “Maize is now perceived a low value crop by farmers who can no longer afford the heavy dose of fertilizer which is necessary to make maize cropping productive enough to be profitable (Milimo, Shilito, and Brock, 2000, p.15).” In addition, since the beginning of market liberalization, farmers in all zones perceived that delivery of inputs had become less dependable. The data show, however, that fertilizer prices have not risen substantially relative to maize prices. In 1993, the national maize/fertilizer price ratio was 0.41 (Alwang and Siegel, 1994); recent data from CSO show this ratio to be 0.51 in Eastern Province, 0.42 in Northern Province and 0.53 in Southern Province. While fertilizer prices have risen, maize prices have risen more than proportionally, leading to increased profitability of fertilizer use on maize. Despite this increased profitability, fertilizer use declined nationally between 1990 and 2000 (World Bank, 2003). But, others note that the official prices used to calculate maize/fertilizer price ratios are misleading, since few can buy fertilizer at official prices.
Timely access to fertilizer can be more important than its cost. Government-supplied inputs, although less expensive, have a history of not being provided on time. Late application of fertilizers can result in significant reductions in yields. Many studies highlight the lack of timely inputs as a major constraint for smallholders (e.g., Gordon, 2000; Keyser, Helsop, and Abel, 2001; Milimo, Shilito, and Brock, 2000; Skjonsberg, 2003; Haggblade and Tembo, 2003).
With fewer than 20 percent of Zambian smallholders using fertilizer in 1999-2000, GRZ feared that discontinuing fertilizer subsidies would exacerbate food security problems (Mwape, 2004).10 “There are serious concerns over private traders’ willingness to deliver inputs on credit to resource-poor farmers. According to this view, government fertilizer and credit distribution are indispensable for promoting smallholder agricultural productivity and growth (GRZ, 2002, p.iii).”
Recent programs to improve smallholder access to fertilizer are MACO-FSP (50% subsidy program) and MCDSS-FSP (100% grant). These programs were each supposed to reach
10 An institutional analysis of fertilizer markets in Zambia was undertaken as part of the PSIA (see Mwape, 2004).
9
about 200,000 households in 2002/2003.11 About to two-thirds of the planned number of households received assistance in 2002/2003, but problems persist, such as: late delivery, limited program benefits per household, seemingly inefficient use of subsidized fertilizer, reselling of subsidized fertilizer and/or use on other crops, and high costs to maintain the program (even if the major share of costs are borne by donors and NGOs).
It has been argued that continuation of subsidized fertilizer programs inhibits private sector development of fertilizer production, purchases and sales (GRZ, 2002; Mwape, 2004). In fact, some contend that market privatization, with appropriate investments in infrastructure to lower transport costs and make remote areas more accessible, could benefit smallholder farmers more than current policies that subsidize fertilizer prices (GRZ, 2000). In addition to appropriate roles of government and the private sector, questions about the transition to a private-sector-led input supply system must be addressed. In addition, it is important to recall that efforts at lowering transaction costs through road construction and improved communication and storage infrastructure can take many years to materialize. With all these inter-related factors, it is questinable what liberalization of fertilizer markets alone can achieve (see box 3).
Box 3: Inter-relationships Among Constraints in Fertilizer Supply
Constraints of fertilizer supply and access have been attributed to: limited purchasing power, poor road and market infrastructure, inadequate private sector capacity especially in remote areas, late delivery of inputs, reductions in Donor support for fertilizer subsidies, and reduction in domestic production of fertilizer. Ironically, Zambian smallholders are reported to overuse fertilizer. Mwape (2004) details many of the inefficiencies and high costs from lack of a coherent fertilizer policy. It is clear that fertilizer supply and prices are affected by numerous factors outside the realm of the Ministry of Agriculture and Cooperatives. It is thus important to have a multi-sectoral and inter-Ministerial approach. That includes investments in infrastructure combined with improved extension messages, and incentives for more efficient use of fertilizer.
Rural Infrastructure and Transport Costs
Zambia is a large landlocked country with relatively unreliable and expensive access to ports; be they in Tanzania or Mozambique (or South Africa). Smallholders are dispersed throughout the country, many located far from the line-of-rail, which is a major transport artery. The lack of direct port access, the poor state of rural infrastructure, and the physical dispersion of smallholders all make the marketing of agricultural inputs and outputs expensive (Copestake, 1997; SGS Zambia, 1999; Keyser, Helsop and Abel, 2001; GRZ, 2002; Mwape, 2004). Furthermore, many rural roads are in bad condition and often not passable during the rainy season. Private traders therefore tend to concentrate their business to the line-of-rail and other main roads, leaving farmers in remote areas without reliable service. These factors contribute to high transaction costs and uncertainty about markets, and have had a negative impact on
11 In 2003 MACO-FSP administered by FAO and assisted members of cooperatives who paid their required 50% of input costs for a pack consisting of 4 50kg bags of urea, 4 50kg bags of D-compound, and 20 kg of maize seed. Under MCDSS-FSP, administered by PAM, target households were poorer and affected by recent droughts. Their pack consisted of inputs for 0.25 ha of a staple grain (maize or sorghum or millet), legume (groundnuts, beans or cowpeas) and tubers (cassava or sweet potato) for home consumption.
10
Zambia’s competitiveness in international commodity markets. For example, farmgate prices of fertilizer can be about double the CIF price in many areas of the country (Mwape, 2004).
To some extent, past policies of pan-territorial pricing masked the problem of differential access to transport infrastructure and services in the country. Since elimination of pan-territorial pricing for fertilizer and maize, spatially differential prices of inputs and outputs have influenced the distribution of different cropping patterns and cultivation practices.
During the 1990s GRZ made some efforts to improve major roads (primary and secondary roads) and also has supported local and community efforts to improve and maintain tertiary rural roads (World Bank, 2004).12 However, with such a large country and dispersed country, there is still a long way to go to improve access to transport and markets for many rural Zambians. Improving access to transport and markets and lowering transport costs are key factors for improving market integration for staple food crops and higher value enterprises. In addition, improved rural transport should help improve access to rural and urban labor markets, and help improve conditions for development of non-agricultural activities.
Shifts in Production Patterns and Yields
Evidence suggests that the breakdown in maize marketing arrangements and the rising cost of fertilizers led many smallholders - especially those in more remote areas - to shift to low-input technologies and increased production of alternative staple crops for home consumption (Masters et al., 1998; Milimo, Shilito, and Brock, 2000; World Bank, 2003b; Skjonsberg, 2003). This shift has been quite pronounced in Northern Province, where agro-ecological conditions do not favor maize production and transport costs are high (Francis, et al., 1997). See box 4.
Box 4: Changes in Agricultural Production Patterns
“In the early-to-mid-1990s, there occurred a noticeable shift in production patterns, with a reduction in maize plantings and a corresponding increase in the production of an array of drought tolerant cereals as well as crops that do not require much fertilizer (i.e., legumes). Some renewed interest was taken in growing industrial crops (e.g., cotton) and there occurred an initial spurt of growth in non-traditional agricultural exports. The elimination of maize meal and transport subsidies contributed to the rapid emergence of many micro and small-scale milling and oil expressing operations.…Networks of private traders and framer-based marketing companies developed, especially along the Livingstone-to-Copperbelt ‘line-of-rail’ and in surplus producing areas elsewhere. In contrast, in more remote locations, little private trading emerged and smallholder farmers began to revert to more subsistence-oriented production patterns (World Bank, 2003, p.66).”
Maize continues to dominate agriculture, but its relative importance has lessened to some extent (see table 5). Maize area planted declined somewhat since the early 1990s.13 Fluctuating 12 Under the Road Sector Investment Program (ROADSIP) over 1,400 km of trunk, main, district, urban, and feeder roads were rehabilitated, 6,400 km received periodic maintenance, and 1,500 of community roads were improved. ROADSIP has also been an important source of employment (World Bank, 2004). 13 Maize production increased at a 1.9% average annual rate from 1970 to 1989 and declined at a 2.4% average annual rate from 1990 to 2000 (Smale and Jayne, 2004). Rural households use either local or hybrid maize seed.
11
climatic conditions, especially recurring droughts, contribute to variable yields (figure 1). The area planted to maize declined by more than total production did, which indicates that yields increased slightly over time.14
Patterns of production have shifted, but agricultural production is still concentrated in grains and staple foods. Major shifts into cassava have taken place. Cassava requires no purchased inputs and can produce good yields in a wide variety of soil-water conditions (including drought). Its flexible planting and harvesting calendar make it one of the easiest crops for labor-constrained households. There is some evidence from Zambia that many HIV/AIDS affected households have shifted to cassava production (Nweke, Haggblade, and Zulu, 2004).
Land planted to groundnuts (which are widely grown throughout the country and used for relish and oil extraction and have a relatively high value per weight), increased substantially between 1993 and 2002 (figure 2). However, production increases have not mirrored the increase in acreage (figure 3). Sorghum and millet plantings (mostly done by smallholders) increased during the mid-1990s but leveled off and even declined since. Sorghum, which performs well in drought-prone areas and stores well, is grown in many provinces, often inter-planted with local maize varieties. Land planted to sunflowers, which are produced for sale to oil processing plants, has fluctuated around a fairly constant level since 1997.
A major shift in crop production by smallholders has been the significant increase in land planted to cotton (Boughton, et al, 2002). Much of the cotton production has taken place using contract farming arrangements, whereby smallholders receive inputs on credit and extension assistance along with guaranteed output markets. Over the past few decades, cotton production by smallholders has gone through periods of expansion and contraction. Cotton production increased from 20,000 mt in 1994 to about 100,00 mt by 1998 and evened off at about 80,000 mt. During 1998 to 2000, cotton exports were Zambia’s major agricultural export. Cotton planting is sensitive to prices; unusually high international prices in 1998 preceded a spike in land planted and production in 1999. Cotton prices have continued to fluctuate in recent years and there is evidence of a long term decline in real prices (Baffes, 2004).
As mentioned, there were significant increases in production of nontraditional exports such as horticulture and floriculture. There were also significant increases in coffee production and exports in recent years, mostly by commercial farmers. In most cases, commercial farmers and some emergent farmers have been the major producers of these nontraditional exports. A notable exception is paprika, which like cotton, has largely been produced by smallholders under contract farming arrangements. In most cases declining or stagnant international prices have constrained any significant increase in the value of agricultural exports or increased incomes for producers.
14 Note that in some cases we report that average maize yields have slightly increased and in others that it has slightly decreased. Different publications have different starting and ending periods, and data is of questionable quality, but nationally there have not been significant changes in average yields.
12
Shifts in Value of Production and Shares of GDP
Since the mid 1990s, the contribution of agriculture to national GDP increased from about 15 to 20 percent (World Bank, 2002b). The contributions of different crops and livestock to agricultural GDP have also changed (table 6). Maize still is the largest component of agricultural GDP, but it declined from 26 percent in 1994-5 to 19 percent in 2000-1; while the share of roots and tubers increased from 5 percent to 14 percent. Other notable changes are the increases in the value of cotton (from 15 to 19 percent) and high-value cash crops such as horticulture and floriculture products (from 8 to 14 percent), and the decrease in the share of livestock (from 30 to 20 percent). The large-scale decline in livestock numbers (especially work oxen and cattle) during the 1990s is a major reason for this decline in the value of livestock.
Decline in Livestock Numbers
Oxen use and mechanization increased some since the early 1990s in Central and Eastern Provinces. But, oxen use has declined dramatically in Southern Province due to East Coast Corridor disease (FAO, 2002). Official agricultural census statistics indicate that draught animals numbers declined by 50 percent between 1994 and 2000. A similar decline was recorded for other types of livestock. Reasons include repeated droughts, spread of the tick-borne corridor disease and deterioration in the availability and affordability of veterinary care (Copesake, 1997). Oxen use is virtually non-existent in Northern Province. Nationally, it is estimated that only about 25% of smallholders use oxen (Haggeblade and Tembo, 2003).
In most areas virtually all farm labor is provided by household members. Labor markets are consequently thin (Mwape, 2003). Oxen use can help raise average yields and save labor at critical points in the cropping cycle. Such innovations can help smallholders plant more land without resorting to hired labor, or be constrained by household labor availability. Increasing land under production by smallholders is one of the keys for agricultural growth to be poverty reducing.
Emergence of Private Sector Outgrower Schemes
Some evidence suggests that the private sector can fill the void left by the public sector and that smallholders can adapt to new market conditions. Smallholder outgrower and contract farming schemes proliferated in the 1990s, after the public marketing and agricultural finance systems collapsed. This private-sector led initiative to fill the voids has certain appeal. In addition to cotton, schemes have been set up for tobacco, paprika, sugarcane, castor, and for seed production (Copestake, 1997; SGS Zambia Ltd., 1999; Keyser, Heslop, and Abel, 2001).
Many of these outgrower schemes are in danger of failing. A major problem is that Zambia’s legal system does not protect or enforce buyers’ contracts; instead it protects the rights of farmers not to honor their obligations. “Side selling” of outputs by smallholders is common15, as are the resulting high rates of loan delinquency and non-payment. Buyers have grown weary of such contractual arrangements and are either looking for other ways to encourage production
15 Side-selling is when contracted farmers do not sell their outputs to the provider of inputs on credit, as stipulated.
13
and purchase crops or are simply pulling out of the business (SGS Zambia Ltd., 1999; Keyser, Helsop, and Abel, 2001; Boughton, et al.,2002; Parker 2003).
Lonhro, the major private sector firm involved in contract farming for cotton, withdrew from Zambia in 1999 due to problems with high credit defaults and the lack of legal sanctions for defaulters (Boughton, et al, 2002). Dunavant Ltd. took over Lonhro’s cotton business and insituted a new system called “Dunavant Distributor System”, whereby independent agents contract with the company to receive inputs on credit and deliver them along with extension services to farmers. Agents’ earnings are a function of credit recovery, so they have an incentive to provide quality inputs on time with extensionand to have high yields and repayment rates (Boughton, et. al., 2002).
Changes in Kefa Village Over the Past 25 Years: Findings from a Participatory Study
For the World Bank’s 1994 Zambia Poverty Assessment, a background paper by Skjonsberg (1994) examined living conditions in a village in Eastern Province using a serious of semi-structured interviews with residents.16 For the PSIA, Kefa Village was revisited and changes documented (see Skjonsberg, 2003). The findings presented below are interesting, and in most cases they corroborate the storyline presented above on changes taking place in rural Zambia since the early 1990s. In particular, there are additional insights about changes taking place and conditions in a typical village in Eastern Province.
Major findings from Kefa Village include:
(a) Demise of the GRZ extension system that provided farmers with technical support, subsidized credit, seeds and fertilizer, and the lack of public or private sector to replace these services.
(b) Land issues tend to be debated, but land reform per se is not an issue for the community (only 25 percent of interviewed residents said they did not have enough land).
(c) Land is not equally distributed (advantaged groups include clan members, wealthier farmers and long-time residents).
(d) Soil fertility problems are increasing the need for fertilizer and improved seeds. However, farmers do not have cash or credit to buy improved seeds and fertilizer.
(e) Seeds and credit are sometimes available from agents of the cotton and tobacco buyers.
(f) Seeds and fertilizer are rarely available in a timely manner.
16 The 1994 paper was an update of an extensive study undertaken in the 1970s and documented in a book: “Change in an African Village: Kefa Speaks” (see Skjonsberg, 1979).
14
(g) On average, a household cultivates about 1 ha maize and 0.4 ha groundnuts, primarily for home consumption. The major binding constraint tends to be available household labor, not land.
(h) Livestock numbers, especially cattle, populations are declining due to drought and illness.
(i) Small livestock (e.g., chickens and goats) are gaining in importance.
(j) Water scarcity is a major problem.
(k) Lack of fertilizers is claimed to be the biggest problem. When people say that there is a “lack of fertilizer”, this includes the lack of suppliers and the high cost of fertilizer when available.
(l) GRZ programs for subsidized fertilizer do not reach Kefa farmers or reach them in insufficient quantities.
(m) Lack of fertilizer and water scarcity are driving cropping choices. Cotton production has increased because it needs less fertilizer and water, and because and agents for cotton processors tend to provide advances of inputs and guaranteed markets)
(n) There is also a lack of output markets. “One big problem that we all have is where to sell our produce. There is no market so instead we just have to sell it one by one.”
(o) Increased problems with malaria, HIV/AIDS, and orphans.
(p) Increased dependence on assistance from donors and NGOs (church groups).
(q) Persistence of beliefs in witchcraft and fatalistic attitudes.
The findings from Kefa Village indicate that there are many factors that influence the opportunities and constraints faced by smallholders., including important social and cultural factors.
15
2. THE SMALLHOLDER MODEL
Model Description
As part of the World Bank’s 1994 Zambia Poverty Assessment, a stylized linear programming (LP) model was constructed to better understand the economic opportunities and constraints of “representative” smallholder households. This model was used to measure impacts of changes in policies and investments on smallholder cropping patterns and cultivation practices, and subsequently on households’ well-being outcomes (see Alwang and Siegel, 1994; Alwang, Siegel, and Jorgensen, 1996). A strength and weakness of the household model is its simplicity and ease with which parameters can be revised.
The model is a single-period linear programming (LP) model of smallholder households in rural Zambia. It is comprised of an objective function, model activities, and constraints for different resources, with labor disaggregated by month. 17 See the annex for a formal presentation of the general LP model.
The model maximizes annual returns from agricultural production given fixed assets, subject to the technologies and constraints. The model only considered labor incomes from on-farm agricultural activities. Although could be expanded to include off-farm wage labor activities.18
Production technologies (i.e., cultivation practices) are reflected in crop budgets. Constraints include access to land, household labor availability, and household food security objectives. In initial model runs, land was not considered to be a binding constraint, but for different scenarios, the availability of land is constrained. The food security constraint is modeled by applying a “safety-first” condition to the household’s objective function, whereby the household maximizes net income only after first producing enough food staples for their own consumption. This food-security constraint is relaxed in different model runs to evaluate the opportunity cost of household concerns about food security.
There is a lack of consistent data on Zambian agricultural production (see box 5). The smallholder model combined census data (information on household composition, land holdings, economic activities), socio-anthropological data (time-use studies of household members, gender distribution of labor for different activities), with farm budgets for different cropping activities to 17 The household model analyzes a single 12-month period, disaggregated by month. 18 Smallholders derive a majority of their income from agriculture. There is a general lack of non-farm, non-agricultural activities in rural Zambia (Milimo, Shilito, Brock, 2003; Skjonsberg, 2003). Only considering agricultural incomes focus more clearly focuses on agricultural incomes and the potential for agriculture, by itself, to reduce poverty of representative rural households. Expanding the model to consider off-farm agricultural or non-agricultural incomes is possible, but requires additional data (see Alwang and Siegel, 1999 for a similar smallholder model that does consider off-farm wage labor).
16
generate the economic variables of interest (crop production patterns, household income, shadow prices of land and labor). See Siegel and Alwang (1994) for details.
Box 5: Data Constraints in Zambia Limit Analytical Techniques
“A major challenge in understanding the performance and competitiveness of Zambian agriculture and agribusiness stems from the unreliability of production-related agricultural statistics and the paucity of available data pertaining to agro-industry. There are wide variations among production statistics reported by different sources and a high level of uncertainty regarding the accuracy of data on plantings, production, and yields for most crops. Data on livestock production and marketing is even more tentative. There are serious problems with both the, methods and underlying data used to calculate agricultural GDP in Zambia. Available data on agricultural trade probably represent a reasonable approximation of actual trade flows, although much of the informal cross-border trade in food may not be regularly measured. The depth and quality of available agricultural statistics are not sufficient to subject this data to sophisticated analytical techniques (World Bank, 2003, p.63).”
The model contributes to policy dialogue by providing quantitative estimates of the benefits
and costs of stylized changes in policies and investments to smallholders. That is, once a baseline model is constructed and results analyzed, it is possible to change parameters to reflect different scenarios and to quantify the impacts. In the context of the PSIA and CEM, the model was used to examine impacts of changes in land availability (and, implicitly, land reform), fertilizer prices and availability, infrastructure investments and transport costs, and HIV/AIDS on cropping patterns, labor allocation and input use, land cultivated and incomes for “representative” rural households’.19 See box 6.
Box 6: Using the Smallholder Model for Policy Dialogue with and Stakeholders
One of the appealing features of the simple LP based smallholder model is the ease with which it can be updated, revised for which different scenarios can be examined. The technical data and price data for the LP model can all be easily viewed and updated/revised. As such, it is hoped that there will be follow-up consultation and dissemination activities in Zambia with stakeholders whereby the smallholder model can be adjusted and tested with stakeholders in “real time” to generate additional discussions and debates about how to most accurately portray representative households.
Main Findings from the 1994 Baseline Model and Scenarios
The main findings from the 1994 smallholder baseline model and different scenarios are presented below:
• Access to land was not a binding constraint for households, because labor constraints were binding. A typical household using hand-hoe could cultivate about 2.5 hectares at most. Labor constraints during land preparation, weeding and harvesting limited more extensive use of land resources (we assumed that only household labor was used in farm production activities).
19 Several factors limit the model’s insights. These include a) the prevalence of non-price constraints, b) the importance of household assets and bundles of assets in addition to cash flows, c) risks associated with fluctuating prices and climatic conditions, and d) consideration of fixed investment costs in addition to variable input costs. To incorporate these factors, a multi-period dynamic model would be required; this would require additional data. See suggestions for further research at end of the paper.
17
• Oxen (and implicitly other labor-saving) technology reduced labor constraints and led to more output per hectare and brought more land into production. When oxen cultivation was assumed to be available, the maximum land used by the typical household increased to around 4 hectares. Labor constraints were still binding at this higher level of land use.
• The impacts of price liberalization depend critically on access to infrastructure. More remote households were adversely affected by liberalization because of increased transport costs, while those with better access to infrastructure and thus to markets saw their well being improve.
• Input supplies for improved technologies were an important constraint for households. Model results showed that most smallholder households were more adversely affected by late and irregular access to hybrid maize seed and agricultural chemicals than they were by increased prices of such inputs. When inputs become only irregularly available, households substituted labor and land for scarce modern inputs. As a result, yields declined and households could devote less labor to other agricultural and non-agricultural jobs.
• The impact of HIV/AIDS and other serious illnesses depend on household composition. In female-headed households (FHHs), a loss of 20 percent of household labor leads to a proportional loss in income. For male-headed households (MHHs), who initially had more labor at their disposal, impacts of such illness were less severe. It must be emphasized that the modeling of HIV/AIDS did not include out-of-pocket expenses associated with the disease, psychic costs, and time spent caring for the sick; but the model still shows a strong impact of the pandemic.
• Gender-differentiated agricultural activities (in some Zambian cultures, women and men perform separate tasks) represented a real cost to the household, because they constrained available household labor at peak periods. The net value of agricultural production was 20 percent lower for gender differentiating households, compared to non-gender differentiating households.
Updating the Model in View of the Changes in the 1990s
The model was updated to reflect current conditions—technologies, cropping patterns, input and output prices, and household composition, constraints and asset endowments). In addition to the updating, the model was regionalized, since market liberalization has widened regional price differentials, cropping patterns and cultivation practices across regions. The technical input-output parameters for the various crop production activities were adjusted to reflect new technologies and cultivation practices. The updated model was calibrated for stylized smallholder households in Eastern, Southern and Northern Provinces. The model also includes additional crop activities to represent the major crops produced by smallholder farmers in the respective areas. For Eastern and Southern Provinces we include an option for cotton production, while in Northern Province we include a cassava production activity. See table 7 for major crops produced in Eastern, Southern and Northern Provinces.
Over the years, hand-hoe and oxen technologies have not significantly changed, therefore, the technical input/output coefficients are assumed to be similar to the past
18
(Mwape, 2003).20 In provinces with significant oxen populations, both hand-hoe and oxen technical coefficients are considered as available options to household at all levels of management. In the areas with small numbers of oxen, hand-hoe technical coefficients are the most applicable at all management levels. Since gender differentiation of agricultural tasks is not as prevalent as in the past, differentiated male and female labor allocation by task was not considered as in 1994 (Mwape, 2003).
20 While use of hybrid maize, fertilizers and other modern inputs changed since the reforms of the 1990s, few innovations in maize or other technologies have been made available to small-scale producers. Thus, the technical relationships between input uses and outputs have not changed much. These technical input/output relationships form the basis of the household model. The main difference between the updated model and the 1994 model is the use of higher yields for local maize. For Eastern Province, we use yields of 1200 kg/hectare under hand-hoe conditions, compared to 800 kg in the 1994 model. We justify this change based on data from Zambia (Mwape, 2003; World Bank, 2003 statistics, and FAO Agricultural Statistics data)showing average maize yields to be about 1450 kg/hectare. With less than 30 percent of farmers in Zambia using hybrid maize, local yields would have to be substantially higher than 800 kg/hectare and our best information is that yields are approximately 1200kg/hectare using relatively low technology. Conservation farming (CF) was not modeled due to lack of data.
19
3. UPDATED BASELINE SMALLHOLDER MODEL, POLICY REFORM SCENARIOS, AND RESULTS
Updated Baseline Model
The updated baseline models considered the following crops, technologies and cultivation practices (see annex, tables A and B for details on assumptions on crops and input/output relationships and prices for Eastern, Southern, Northern provinces):
(a) groundnuts (early/late planting and hand-hoe/oxen)
(b) sorghum (local/hybrid seed, hand-hoe/oxen and fertilized/unfertilized),
(c) millet (hand-hoe/oxen)
(d) sunflowers (hand-hoe/oxen)
(e) cassava (hand-hoe/oxen)
(f) sweet potato (hand-hoe/oxen)
(g) cotton (local/hybrid seed, hand-hoe/oxen and fertilized/unfertilized).
Early/late planting options have implications for monthly labor requirements and yields (and reflect household labor/cash constraints and the problem of untimely input supply). Problems from late planting due to untimely input supply are frequently cited in the literature on Zambian smallholders (e.g., SGS Zambia, Ltd., 1999; Skjonsberg, 2003). We model the cost of untimely inputs by running the model with and without an option for early planting. In addition, good/bad management affects labor requirements, inputs and their costs, and yields. We model this by making different assumptions about management levels. As expected, use of hand-hoe compared to oxen technology has implications for labor requirements, timing of activities and yields.
Updated Baseline Model Results
Model results generate the objective function value (net returns in ZK to the household), the amount of land and labor devoted to different crops, and shadow prices for binding constraints (see annex for details). We have added a few indicators that reflect household well being, such as the share of household income devoted to staple foods (to reflect food insecurity), and the value of purchased inputs as a share of household gross revenues (to reflect credit needs and market exposure). Model results are presented in tables 8 to 11.
20
We begin with the baseline results (table 8), for the updated model representing conditions in Eastern Province. The results reflect the finding that - under current conditions - smallholder agriculture has a limited role to play in reducing rural poverty because of its low income-generating potential. Given labor, cash and food-security constraints, prevailing technologies and prices smallholders would choose to produce local maize, groundnuts and millet. Net returns are about ZK2.7 million per household from 3.2 hectares of land using hand-hoe technologies. On a per-household basis this represents about $1.7021 per day, about $0.30 per person per day.
Results from Southern and Northern Province are similar to those from Eastern Province. The food-security constraint pushes smallholders in Eastern and Southern Provinces to primarily produce maize and groundnuts for own-consumption. As expected, net returns are highest in Eastern Province, followed by Northern. In Northern Province, relatively large amounts are spent on purchased inputs, but, because staple food prices are relatively high, households also receive larger net returns.22 Land under hand-hoe cultivation is highest in Eastern Province.
The baseline model for Eastern Province shows that, under existing prices and technologies, hybrid maize yields would have to increase by 500 kg/ha (from 2200 to 2700 kg/ha under hand-hoe cultivation) before hybrid maize would supplant local maize in the optimal solution. Using hand-hoe technologies, the household cultivates approximately 3.2 hectares of land, and cannot cultivate more due to limited household labor availability during November and December, months of land preparation and beginning of season weeding.23 Without alleviating these labor constraints, additional land availability will not benefit these households.
Oxen clearly help reduce the importance of these early-season labor constraints for Eastern Province households.24 With oxen, land in production grows to 4.2 hectares and the household is bound by labor availability in March and April, when the maize harvest is in full swing. Oxen are still associated with local maize production (as opposed to hybrid maize), but if the yield of local maize were to fall by 200 kg/hectare (to 1000 kg/ha) with the use of oxen, hybrid maize would replace local maize production in the model solution. Oxen technology leads 370 percent higher returns and because it increases hybrid yields by relatively more than it increases local maize yields, it makes hybrid maize relatively more profitable.
Availability of oxen and the ability to alleviate early-season labor constraints allows the household to produce sweet potatoes instead of millet. The former crop yields better returns, but requires substantial amounts of labor for land preparation at about the same time land is being prepared for maize production. Introduction of oxen also leads to higher use of purchased inputs and cash exposure, as cash spent on inputs as a percentage of gross production value rises from 8 to 10 percent. In the case of oxen technology, the household spends more than ZK1.1 million
21 Using $1= ZK4,300, which was a representative exchange rate for 2003. 22 This is a problem when imputing household incomes based on food staple prices. Remote households are merely eating higher value maize and beans than less remote households. 23 Recall, the model assumes that smallholders only use household labor. 24 Results for Southern and Northern Province are qualitatively identical; information is available from the authors.
21
(about $270) on inputs. This amount may seem small, but it is significant for a household with agricultural activities generating about one US dollar per day, and represents a considerable hurdle to adopting new technologies. Generating savings to purchase these inputs could be difficult, given the low levels of “profit” from the enterprise. Credit access is thus an extremely important component of the household’s ability to take advantage of market opportunities and increase output through use of new technologies.
Interestingly, cotton never entered the model solution in either the Eastern or Southern Province scenarios. In fact, cotton prices would have to rise from MK 850/kg to MK 3900 (a 460% rise, holding all other prices constant) before it becomes attractive to smallholder producers, according to our model estimates. Even with the food security constraint removed, cotton does not enter the solution. This finding shows that, given prevailing technologies and prices, cotton will not be a profitable alternative for Eastern and Southern Province smallholders. Evidence that cotton production among smallholders is widespread is an indication of: (i) our model assumptions are incorrect or (ii) other factors are affecting the decision to produce cotton. An example of the latter might be access to credit or other inputs that induces smallholders to enter into outgrower schemes.
Stylized Policy Reform Scenarios25
We want to examine the impacts on smallholder households of the following: land reform, liberalization of fertilizer markets, and improved rural road infrastructure. In addition we examine impacts of HIV/AIDS. The specific scenarios are described below.
Land reform: in the baseline model, land availability is not constrained. Instead, labor constraints prevent the households from planting more than 3.2 hectares. Labor availability was constraining during November and December, when planting and weeding occurs. Introduction of labor-saving technologies (such as oxen) increases the amount of land the household plants to 4.2 hectares, when labor availability again constrains the household. We examine land-reform impacts in three ways26. First, we limit the households to only two hectares in production and examine the impacts on the farmers of progressive increases in land availability. Second, we examine impacts of providing progressively more land to a poor land-scarce smallholder household. Finally, we begin to eliminate the labor constraints and examine how land use patterns change as more labor becomes available to the household. This final scenario shows how demand for land use might change as labor-saving technologies are introduced into rural areas.27
25 The scenarios were not created with specific research-based information on the likely impacts of the reforms. The authors know of no such research, but the scenarios could be modified to incorporate research findings on the impacts of reforms. Alternatively, sensitivity analyses (carried out by adjusting various parameters of the model) could easily be applied to examine a range of possible outcomes. 26 Land reform might also increase access to credit because of improved collateral conditions. The model is not set up to examine access to credit, although we could look at the implications of more binding cash constraints. 27 The model reflects conditions in Zambia where land is abundant. Efforts to bring more land under cultivation should include complementary moves to improve labor markets and to increase the productivity of existing agricultural laborers.
22
Fertilizer: We examine the impacts of changes in fertilizer policy in two ways. First, we examine how increased prices of fertilizer affect farm profits and production patterns. Fertilizer price increases are likely to be more significant in Northern Province, because of its remoteness; we raise prices by 10, 20 and 50 percent and examine the impacts on the model. Second, market liberalization might make fertilizer more readily available. We constrain the model to not allow timely application of fertilizers and examine the relative impacts of price increases (and timely application) compared to late-arriving fertilizer.
Infrastructure: We assume that the major impact of remoteness is felt through higher transaction costs and the farm-gate prices of inputs (higher) and outputs (lower). Therefore, we assume that new infrastructure should lower the relative costs of purchased inputs and raise the relative prices of tradeable goods (such as hybrid maize, sunflower and cotton). Improved infrastructure should also weaken the impetus for smallholders to produce food staples for home consumption, by increasing the cost associated with making cropping decisions based on a “safety first” food-security constraint. Purchased food staples should be cheaper and returns on marketed crops higher.
HIV/AIDS: We assume that households with members having HIV/AIDS will face reductions in available labor and an increase in household food-security requirements. In other words, we assume that dependency ratios increase (extra mouths to feed and less hands to work) as a result of HIV/AIDS. We do not model the costs for medication or other treatments, or other economic and social impacts of HIV/AIDS. The results can be viewed as a “lower bound” of the costs.
Model Results
Land reform
The basic results for the scenarios in Eastern Province where land is assumed to be limited (e.g. this assumes land reform that provides a minimal amount of land to poor households) are shown in columns one and four of table 9 for hand-hoe and oxen technologies, respectively. For the hand-hoe household, the solution is infeasible with two hectares, as the household cannot produce enough maize (local) to meet its food-security constraint. With the food security constraint imposed, the minimum feasible amount of land is about 2.2 hectares; the model results with hand-hoe technology and 2.2 hectares are shown in column one of table 9. For the oxen-using household, the results are shown with a 2 hectare allocation. The low amount of land available to the household leads to almost all production being devoted to staple foods. The same scenario, but with the food-security constraints removed, is shown in columns 2 and 5. Concerns for food security clearly alter production patterns and prevent households from specializing in higher value crops.
Under oxen cultivation, returns to household labor are more than twice that of the hand-hoe household, and the land used is slightly less (two hectares versus 2.17). This result shows how land reform, together with the introduction of labor-saving technology, can help even relatively poor farmers. Notice however that the oxen-technology option assumes that oxen are readily available for rental (a big assumption considering high recent oxen mortality rates). The
23
solution requires almost ZK150,000 in cash at the start of the planting season to rent oxen and purchase other inputs (see below for more details).
Progressively increasing returns from increased land allocations clearly depend on the technology used. Access to oxen is associated with a higher marginal return to increased land, while the marginal value of land is lower (but still positive) for hand-hoe technologies (figure 4). Among Eastern Province smallholders, oxen use is still quite limited, likely due to the high price of buying and keeping oxen. Oxen rental markets require adequate cash on hand at the beginning of the growing season; anecdotal evidence shows that seasonal credit for up-front farming operations is limited. Returns to hand-hoe smallholders of maize also increase with landholding size, to the maximum acreages noted above. As noted in the 1994 study, the food-security constraint substantially lowers net returns at all production levels. More confidence in the ability of food markets to provide minimum food needs will improve conditions (by a substantial amount) among smallholders, regardless of the technology used.
Model results suggest that allocating more land to smallholders without addressing the labor constraints will have no real impact on their ability to increase production. Allocations of more than five hectares will lead to under-utilized land unless either labor markets can be created (although the demand for labor is not likely to be strong, since current conditions in agricultural labor markets suggest few transactions take place) or labor saving technologies can be introduced. We examine the case where household labor is increased by 20 percent for hand-hoe (see table 9 column 3) and oxen (column 6) technology. Additional labor will substantially increase the amount of land planted in both cases; such an innovation could put pressure on land availability in Eastern Province.
Results are shown in more detail in figure 5. Oxen cultivation, while reducing labor constraints and allowing more land to be farmed, is also associated with greater returns to labor, and increased labor use. Increased labor available for weeding and harvesting improves household returns.
As noted above, cash on hand can be a critical constraint for Zambian smallholders. In each of the above scenarios, we assume that households—either through own savings, own finance, or borrowing—have enough cash on hand to conduct “normal” input purchases and make needed expenditures in a timely way. This assumption may not hold, especially given the relatively low returns to farming (as seen in our model results). We examine the impacts of more limited cash availability and find that the representative household must have about ZK180,000 on hand at the start of the season to conduct its farming operations (figure 6). In order to reach the baseline solution, shown above, the household needs about ZK240,000 (about $55) on hand at the start of the season. At low levels of available cash, returns to cash on hand are quite substantial (the graph in figure 6 is steeply sloped), which indicates that under the assumptions of the model, returns to credit (and demand for credit) are likely to be robust.
Fertilizer Policy
We examined above the household impacts of changes in input and output prices (as a part of the remoteness scenario). To examine the impacts of fertilizer policy changes, we reran the Eastern Province model but varied the fertilizer price from 10 percent of current prices up to
24
more than 100 percent of these prices. The results are shown in figure 7. At very low prices, the hand-hoe household, which grows hybrid maize and fertilized millet, uses almost 1000 kg of fertilizer. The progressive decline in the objective function value as prices are raised is due to increased costs associated with higher-priced inputs, not to a change in cropping patterns (a basis change). When the price reaches 70 percent of current prices, the household produces less hybrid maize and total fertilizer use declines to slightly under 700 kg. At current prices, slightly over 300 kg is used, but the model shows that even a slight price increase will cause fertilizer use to drop to zero.
These results are from a model with no food-security constraint; this suggests that fertilizer policy can boost smallholder incomes only if they have confidence in the market. However, the elasticity of response is not high; a 20 percent decline in fertilizer prices is associated with only a 6 percent increase in income. As the price moves from 80 to 70 percent of current prices, a one percent decrease in the price of fertilizer is associated with a 0.3 percent increase in household income. At the point where the price is reduced to 70 percent of current prices, we reach a ceiling on fertilizer use. Below this point, additional fertilizer applications are not economically rational and the only impact of increased subsidies are on household incomes (increased incomes due to lower fertilizer prices). This finding sheds light on the impact of heavily subsidized fertilizer. It might promote inefficient over-use of fertilizer and is no better to the farmer than a pure income transfer.
Improved Road Infrastructure
Eastern Province model results under the remoteness scenario are shown in table 10. Remoteness leads to less land under cultivation, lower returns per household member, and lower returns to land. Net returns are about 10 percent lower under the remoteness scenario, indicating important welfare costs associated with remoteness.
Improved infrastructure may also increase confidence in markets. Such confidence may, over time, reduce the need to produce for own consumption. As was shown in figure 4, the food-security constraint has an important returns-lowering impact on households. Removal of the food security constraint increases well-being by about 20 percent and makes production on less land area more feasible. Without the food-security constraint, Eastern households produce higher (relative) return crops28, such as sweet potatoes, and increased amounts of groundnuts. The combination of less remoteness and increased confidence in the market is associated with about a 25 percent increase in net returns for all households (hand-hoe and oxen, and across provinces) compared to remote, food-security-constrained households. These results provide insight into the benefits to household well-being of investments that allow smallholders to purchase (rather than produce) maize for their food security requirements.
HIV/AIDS and reduced labor
Model results under this scenario are shown in table 11. Reductions in available household labor, as might occur with an HIV/AIDS, lead to much less land being cultivated and 28 Note the subtle difference between high-value crops and crops that have higher returns than other low-value crops.
25
more production of staple foods relative to other products. In addition, in the hand-hoe household, purchased inputs increase as a share of total value produced, indicating some substitution of purchased inputs for scarce labor. Decreased amounts of labor available to the household, shown in figure 5, lead to progressively lower returns and constrain the household to cultivate less land. This leads to increased production of food staples that require less labor and/or labor spread more evenly or more flexibly through the year (e.g., cassava). The opposite is true when labor is more abundant.
Beyond the Model: Moving into Higher Value Crop Activities and Conservation Farming
To complement findings from the smallholder model we will briefly examine other studies that shed some light on the potential for agricultural-led poverty-reducing growth for smallholders based on the adoption of higher value crops and of conservation farming (CF).
Moving into Higher Value Crop Activities
Given current yields and the single-season cropping associated with rain-fed agriculture, smallholder agriculture can not be expected to make minor contributions to rural poverty reduction. Our smallholder models show net returns of $0.29 per person per day with hand-hoe technologies and $1.06 per person per day with oxen technology, far below the internationally accepted minimums of $1 per person per day. 29
These numbers may be compared with recent financial analyses of returns to different smallholder crops (Keyser, 2002, see table 12). Crops grown on relatively small landholdings, while contributing to food security and supplementing family income, can not be expected to make substantial contributions to poverty reduction. An alternative is clearly needed.
Higher-valued crops yield higher net incomes but do not provide enough income by themselves to reduce poverty much (table 13). Budgets from Keyser (2002) for commercially oriented emergent and large-scale farmers show more promise, but (as will be noted below) initial investments and operating costs for such enterprises require substantial outlays.
Most traditional smallholder crops, such as local maize, groundnuts and cotton, might have low input costs, but they also have relatively low returns to labor (see table 14). Higher-value crops like paprika and tobacco have higher cash input and labor demands. Furthermore, many crops experienced stagnant or falling prices from 1994 to 2001, while input costs tended to rise. In any case, returns to labor have remained low and in many cases declined, even in cases where there might have been improvements in yields. High cash and labor requirements are a major constraint for smallholders.
Paprika represents an example of a new smallholder crop that proliferated quickly. It was first introduced into Zambia in the early 1990s and quickly developed as a smallholder crop and important agricultural export. Development of this sector was only possible due to investment decisions made by a few entrepreneurs. These entrepreneurs identified a specific market
29 Actually we make fairly optimistic assumptions about maize yields in both cases.
26
potential and made long-term investments to sustain their operations. This has required substantial investments in farmer extension, input supply, marketing support, laboratory equipment, processing facilities, construction of rural depots and negotiation with potential buyers around the world. Opportunities in other areas exist, but success still depends on individual entrepreneurs who are willing to respond to market signals and accept the risk and high cost of investing in new areas (Keyser, Helsop, Abel, 1999, p. 39-40). Producers experienced declining returns to labor despite improvements in average yields. These are not good omens for increasing paprika production.
Keyser (2002) and Mwape (2003) claim that commercial agricultural producers in Zambia can attain higher yields than small-scale producers. Higher returns per hectare, combined with the fact that these returns are spread over more hectares demonstrate that farming can be a profitable enterprise. Attainment of “commercial” status requires knowledge of advanced farming techniques and business and financial management skills. Financial barriers to entry can be daunting: table 15 presents estimates of the investment costs needed to enter selected high-value, commercial agricultural enterprises. The combination of huge outlays, the need to spread investments over large land areas and the technical skill required to produce and market at a commercial level creates a substantial barrier to entry into commercial farming. Even a smaller-scale commercial maize farmer require substantial financial resources: a basic, small-scale commercial farmer with a single 60-horsepower tractor and basic cultivation implements (plows, harrows, cultivators, fertilizer spreader and maize sheller) would incur more than $100,000 in fixed investments.
Conservation Farming
Conservation farming (CF) in Zambia is a locally adopted variant of traditional minimum tillage technologies adopted in many parts of Sub-Saharan Africa (Bwalya, 1999; Haggblade and Tembo, 2003). CF has gained popularity in the 1990s in response to market liberalization and the perceived needs to increase fertilizer efficiency, better conserve and manage water resources, increase productivity, and also to spread labor more evenly over the year. As applied in Zambia, CT involves a package of several key practices: dry-season land preparation using minimum tillage (rather than plowing after the first rains), crop residue retention (instead of burning), seed and fertilizer application in fixed planting stations (rather than spreading), and nitrogen fixing crop rotations and fallows (rather than continuous production of crops such as maize and cotton). CF technologies and implements have been developed for hand-hoe and oxen land preparation. It is important to note that minimum tillage is not synonymous with “low-input” agricultural production. In many cases there is need for increased labor and outlays on improved seeds and fertilizers. This is a reason behind the fact that the highest adoption rates of CF in Zambia have actually been by commercial and emergent farmers.
In 1998, MACO officially formally accepted CF as an official policy of GRZ, and increased promotion efforts. One of the emerging “success stories” has been the adoption of CF by many smallholder cotton producers participating in the outgrower “Dunavant Distributor System”. In fact, there is evidence that “CF farmers often receive extra extension support as well as input packages of high-yielding variety (HYV) seeds and fertilizers to which most conventional farmers have not had access in the decade and a half following the collapse of Zambia’s input supply and credit systems. Even under conventional tillage, higher fertilizer and
27
HYV seed use will increase output (Haggblade and Tembo, 2003, p.3).” Thus, it has been difficult to assess the impacts of changes in tillage practices alone versus the package of different tillage practices and use of improved inputs and increased input use. A recent review of CF in Zambia (see Haggeblade and Tembo, 2003) notes that it is hard to estimate the number of smallholders that have adopted CF, because many adopt some components and not others.30 More information is needed about conservation farming to assess its benefits and costs in the smallholder household farming system.31
30 Haggeblade and Tembo (2003, p.80) estimate that “between 20,000 and 75,000 Zambian farmers currently benefit from increased yield and incomes under conservation farming.” 31 Although some donors and NGOs advocate conservation tillage, “little published data is yet available on the economics of conservation tillage compared to alternatives… More research is also needed into intra-household effects of adopting conservation tillage technology, given that non-plowing field operations are generally carried out by women and children (Copesake, 1997, p.31).”
28
4. SUMMARY AND CONCLUSIONS
Smallholder agriculture has some poverty reducing potential in Zambia, but faces major
constraints. A major priority to benefit poor producers should be labor-saving technologies and better-functioning input and output markets. This would allow smallholders to expand their land under cultivation. This is important because in most cases smallholders are not land constrained (like smallholders in many other countries in the world). Access to credit is also important because movement to higher-productivity farming systems usually requires increased investments in inputs and working capital. Capacity building and improved research and extension services are also critical. Remoteness is a problem that can be overcome through investments in infrastructure, but complementary assets are lacking in low-productivity remote areas. Also, transport services need to be improved to lower the costs of transportation. Deeply rooted structural problems that characterize Zambia’s dualistic agricultural sector further exacerbate the problem. Issues such as land reform, liberalization of fertilizer markets, and improving infrastructure need to be part of a broader rural development strategy. The rural poor lack not only land, but other productive resources that would allow them to respond to policies and investments that are aimed at stimulating agricultural growth. Recent innovations in contract farming and conservation farming for smallholders point to the potential when a more holistic technology-technical assistance-credit-marketing approach is adopted. Also instructive are the experiences from resettlement schemes for ex-mine workers (see box 7). However, numerous constraints persist with respect to smallholder agriculture and it will be difficult to overcome them in the short term. This will require imaginative short term policy and investments that can stimulate more efficient and equitable production systems without reverting to a more centrally managed agricultural sector.
Box 7: Resettlement Schemes: Urban to Rural Migration Zambia has tried to encourage some urban residents, notably persons who were formerly employed in the copper mining sector to move to rural areas. Reports show that residents in resettlement schemes have had some success in investing in improved technologies. Many, however, bring human and financial capital with them (SGS Zambia, 1999). Residents who return to villages after spending time working in urban areas have accumulated human and financial capital that can be applied to more innovative agricultural practices. This points to some assets “necessary” for the success of emergent farmers and higher value agriculture.
Looking Ahead: Tapping Smallholder Potential
Market and trade liberalization has created opportunities for Zambian farmers. Elimination of pan-territorial maize pricing and fertilizer subsidies makes location an important factor in determining comparative advantage. Suitable farming systems must be identified depending on agro-ecological conditions, access to infrastructure and markets, and socioeconomic conditions.
29
In addition, more realistic expectations about the possibilities for smallholder transformation are needed. As Whiteside (1998, p.1) noted: “Donors and governments need to recognize that to achieve sustainable increases in agricultural productivity will take decades, not years.” Improved research and extension based on the assets held by smallholders and the new policy regime are needed, including a “basket of choices” that consider smallholder farming systems and off-farm opportunities. Investments in transport and communication infrastructure can help lower transaction costs. There is a pressing need for more technical assistance for smallholders to improve business skills and group formation.32 See box 8.
Box 8: Needs for Sustainable Smallholder Farming Systems
To achieve more sustainable farming systems for Zambian smallholders, Copestake (1997), Ruiske et al. (1997) and Saasa (2000) highlight the need for: • Appropriate technologies and farming systems that are suited to diverse agro-ecological conditions, for smallholders in remote and risky areas. • Technological innovations to raise labor productivity. • Farming systems that are ecologically and financially sustainable. • Stronger credit markets. • Better skills and information to participate in domestic and international markets. • Lower transport-related and other types of transactions costs. • Improved storage to assure timely application of inputs and to capture better prices for outputs. • Aggregated smallholder activities, to reap economies of scale, lower transaction costs and improve bargaining power with the private sector. • Improved links between smallholders and commercial input and output traders, including contract farming and out-grower schemes.
. There is need for short-term interventions to help poor smallholders make this
transformation, since the constraints they face will take time to overcome. Targeted short-term interventions for rural poverty reduction and social protection, such as public works, soil fertility improvements, and other forms of safety nets and social funds are options.
Market and trade liberalization in Zambia were unsuccessful because of the hasty elimination of the public marketing systems, private-sector weaknesses, inappropriate incentive structures, and the lack of infrastructure in rural areas. Furthermore, rural Zambians who had become dependent on public-sector marketing systems did not have the requisite human and social capital to deal with the new realities. As noted in IDS (2003, 22-24) “… making the playing field more level is an important prerequisite for effective pro-poor policies.…It is important to look at how the poor markets, and gain the capacity to engage with some strength in markets, important contributing factors highlighted by the case studies include: access to capital, gaining new skills (from marketing to business experience), building social and commercial networks, the existence of NGO ‘facilitators,’ and logistical support (from roads to mobile phones. Thus, overall, adding a pro-poor component to market oriented policies is not an easy game. Markets are highly politicized, the playing field is uneven, and, without regulation and protection, poor communities are vulnerable to potential exploitation. Without attention to improving the capacity of poor people to engage in markets – through active state support and redistributive measures – the ideals of ‘pro-poor growth’ and ‘private sector partnership’ for 32 See Parker (2003) for an interesting, and humbling account, of attempts by CLUSA to organize smallholders.
30
development will remain more rhetorical gloss than reality.” This point to the need for a more comprehensive and holistic approach to rural development is needed, not just an agricultural or commodity-specific strategy. It is also critical to consider the dualistic nature of the agricultural sector, and possibility to think in terms of specific smallholder strategies.
Suggestions for Further Research
Although the household model can contribute to the policy dialogue, a number of factors limit its insights. These include the prevalence of non-price constraints, the importance of household assets and bundles of assets in addition to cash flows, the risks associated with fluctuating climatic conditions and prices, and consideration of fixed investment costs in addition to variable input costs. Non-price, asset, risk and stock/flow cost factors cannot be easily incorporated into a linear programming model. To incorporate these factors, we would need a multi-period dynamic model; this would require additional data.
The model is a stylized model of representative households. It would be important to match and map these representative households with actual households to better understand how land and labor constraints affect outcomes. For example, model results indicate that smallholders with up to five hectares should not be “land constrained” using prevalent technologies and household labor. But which smallholder households actually have access to five hectares, and where are they located? There might be areas of the country, especially along the “line-of-rail,” with higher population densities and land constraints. In such areas better-developed land and labor markets could influence cropping decisions.
Model results and additional analysis indicate that many smallholders are trapped in a “low-level equilibrium.” Breaking out of this trap will require adopting new technologies and cropping patterns, relatively large investments in fixed assets and working capital. Additional modeling of smallholder adoption of technologies, and subsequent returns from adoption would be beneficial. This line of research will be more fruitful than focusing on how smallholders can survive using existing technologies and cropping patterns. More research needs to be carried out to investigate the economics of adopting higher value crops and/or for the adoption of conservation farming for staple and higher value crops. There is a need to explicitly incorporate risks (e.g., climate and price risks) into the modeling of smallholder agriculture and to better understand how the existence or absence of risks and risk management instruments impact the transformation from subsistence-oriented smallholders to market-oriented emergent farmers.
We also need research that explores the linkages and labor generating capacity of larger commercial farms and emergent farms. For example, how many jobs might a 1000ha farm enterprise generate – both on- and off-farm? What are viable economic units of production for emergent farmers? More also needs to be known about rural labor markets and rural-urban labor markets to better understand how off-farm employment in agricultural and non-agricultural activities might contribute to poverty reduction among smallholders.
31
REFERENCES
Alwang, J. and P.B. Siegel. (1999) “Labor Shortages on Small Landholdings in Malawi:
Implications for Policy Reforms,” World Development. Vol. 27, No. 8, pp. 1461-1475. Alwang, J., P.B. Siegel and S. Jorgensen (1996) “Seeking Guidelines for Poverty Reduction
Policies for Zambia,” World Development. Volume 24, No. 11, pp. 1711-1723. Alwang, J. and P.B. Siegel (1994). “Rural Poverty Assessment.” Volume III of the “Zambia
Poverty Assessment”, Report No. 12985-ZA. The World Bank: Washington, D.C. Baffes, J. (2004) “Cotton Market Setting, Trade Policies, and Issues.” Policy Research Working
Paper Number 3218. The World Bank: Washington, D.C. see www.worldbank.org/research Boughton, D., D. Tschirley, H. de Marrule, A. Osorio, and B. Zulu (2002) “Cotton Sector
Policies and Performance in Sub-Saharan Africa: Lessons Behind the Numbers in Mozambique and Zambia.” Flash … No.34E. Department of Statistics and Department of Policy Analysis, MADER-Directorate of Economics. See www.aec.msu.edu/agecon/fs2/mozambique
Bwalya, M. (1999) “Conservation farming with animal traction in smallholder farming systems:
Palabana experiences.” In Conservation Tillage with Animal Traction. Edited by P.G. Kaumbutho and T.E. Simaklenga. Resource Book of the Animal Traction Network for Eastern and Southern Africa (ATNESA): Harare.
Copestake, J.G. (1997) “Encouraging Sustainable Smallholder Agriculture in Zambia.”
Agricultural Services Reform in Southern Africa Report R6452CA. Centre for Development Studies, University of Bath.
CSO (2001) “Preliminary Report of Census 2000.” Central Statistics Office. Government of
Zambia: Lusaka. Deininger, K. and P. Olinto (2000) “Why Liberalization Alone Has Not Improved Agricultural
Productivity in Zambia: The Role of Asset Ownership and Working Capital Constraints.” Policy Research Working Paper Number 2302. The World Bank: Washington, D.C.
see www.worldbank.org/research Devereux, S. (2000) “Social Safety Nets for Poverty Alleviation in Southern Africa.”
Research Report for the DFID, ESCOR Report R7017. The Institute of Development Studies (IDS): University of Sussex
32
Doss, C.R. (2002) “Men’s Crops” Women’s Crops? The Gender Patterns of Cropping in Ghana.” World Development. Vol. 30, No. 11, pp. 1987-2000.
Evans, D. (2001) “Identifying Winners and Losers in Southern Africa from Globalisation:
Integrating Findings from GTAP and Poverty Case Studies on Global Trade Policy Forum.” IDS Working Paper 140. Institute for Development Studies: Sussex.
FAOSTATS-Agriculture website. See www.fao.org FAO/WFP (2002). Special Report: Crop and Food Supply Assessment Mission to Zambia.
http://www.fao.org/docrep/005/y6997e/y6997e00.htm#P101_11689. Francis, P.A., J.T. Milimo, G.A. Njobvu, and S.P.M. Tembo (1997) “Listening to Farmers:
Participatory Assessment of Policy Reform in Zambia’s Agriculture Sector.” The World Bank: Washington, D.C.
Government of the Republic of Zambia (GRZ) (2000) “Agricultural Statistics Bulletin
1999/2000.” Ministry of Agriculture, Food and Fisheries: Lusaka. Government of the Republic of Zambia (GRZ) (2001) “Agricultural Commercialization
Programme (ACP) 2002-2005.” Ministry of Agriculture, Food and Fisheries: Lusaka. Government of the Republic of Zambia (GRZ) (2002) “Developments in Fertilizer Marketing in
Zambia: Commercial Trading, Government Programs and the Smallholder Farmer.” Ministry of Agriculture and Cooperatives. Food Security Research Project. Lusaka.
Haggblade, S. and G. Tembo (2003) “Conservation Framing in Zambia.” EPTD Discussion
Paper No. 108. International Food and Policy Research Institute (IFPRI): Washington, D.C. see www. ifpri.org
Haggblade, S., editor (2004) Building on Successes in African Agriculture. Focus 12 2020
Vision. International Food and Policy Research Institute (IFPRI): Washington, D.C. see www. ifpri.org
Howard, J.A. and C. Mungoma (1996) “Zambia’s Stop-and-Go Revolution: the Impact of
Policies and Organization on the Development and Spread of Maize Technology.” .” MSU International Development Working Paper No. 61. Michigan State University: East Lansing.
Institute for Development Studies (IDS) (2003) “The Rural Poor, the Private Sector and Markets:
Changing Interactions in Southern Africa.” Report prepared for the Sustainable Livelihoods in Southern Africa (SLSA) Program. See www.ids.uk/slsa
Jansen, D. (1977) Agricultural policy and performance in Zambia : history, prospects, and
proposals for change. Institute of International Studies, University of California: Berkeley.
33
Jayne, T.S, M. Mukumbu, M. Chisvo, D. Tschirley, M.T. Weber, B. Zulu, R. Johansson, P. Santos, and D. Soroko (1999) “Successes and Challenges of Food Market Reform: Experiences from Kenya, Mozambique, Zambia, and Zimbabwe.” MSU International Development Working Paper No. 72. Michigan State University: East Lansing.
Jayne, T.S., T. Yamano, M. Weber, D. Tschirley, R. Benéfica, D. Neven, A. Chapoto, and B.
Zulú (2001) “Smallholder Income and Land Distribution in Africa: Implications for Poverty Reduction Strategies.” MSU International Development Working Paper No. 24. Michigan State University: East Lansing.
Keyser, J.C. (2002) “Zambia Financial Crop Models: Comparison of 1994-5 and 2001-2 Seasons
and Zimbabwe 2000-02 Seasons.” Report prepared for The World Bank: Washington, D.C. mimeo.
Keyser, J.C., T. Helsop, and J. Abel (2001) “Trade and Investment Opportunities in
Agriculture.” Prepared for USAID Zambia Trade and Investment Enhancement Project (ZAMTIE) under contract # 690-C-00-00-00283-00. Lusaka.
Kherallah, M., C. Delgado, E. Gabre-Madhin, N. Minot, and M. Johnson (2000) “The Road
Half-Traveled: Agricultural Market Reform in Sub-Saharan Africa.” International Food Policy Research Institute: Washington, D.C.
Loy, J.P. and R. Wichern (2000) “Integration of Zambian Maize Markets.” Quarterly Journal of
International Agriculture. 39(2):173-198. Masters W.A., T. Bedingar, and J.F. Oehmke (1998) The Impact of Agricultural research in
Africa: Aggregate and Case Study Evidence, Agricultural Economics, 19: 81-86. Milimo, J.T., T. Shilito, and K. Brock (2000) “The Poor of Zambia Speak.” Published by the
Zambia Social Investment Fund. Lusaka. McCulloch, N. B. Baulch, and M. Cherel-Robson (2000) “Globalization, Poverty and Inequality
in Zambia During the 1990s.” Paper presented at the OECD Conference on Poverty and Income Inequality in Developing Countries: A Policy Dialogue on the Effects of Globalization. November 30-December 1, 2000. see http://www.ids.ac.uk
Mwape, F. (2003) “Rural Household Models in Zambia”. Consultant Report prepared for Social
Development Department. The World Bank: Washington, D.C. mimeo. Mwape, F. (2004) “Institutional Analysis of Fertilizer in Zambia.” Background Report for
Zambia PSIA. Prepared for Social Development Department. The World Bank: Washington, D.C. mimeo.
Nweke, F., S. Haggblade, and B. Zulu (2004) Building on Successes in African Agriculture:
Recent Growth in African Cassava. Brief 4. In S. Haggblade, editor (2004) Building on
34
Successes in African Agriculture. Focus 12 2020 Vision. International Food and Policy Research Institute (IFPRI): Washington, D.C. see www. ifpri.org
Parker, S. (2003) “CLUSA Zambia Rural Group Business Program.” Paper presented at “Paving
the Way Forward for Rural Finance: An International Conference on Best Practices. International Trade Center, Ronald Reagan Building, Washington, D.C. June 2-4.
PHS (1999) Population and Health Survey. Central Statistics Office. Government of Zambia:
Lusaka. Pillai, V.K., T.S. Sunil, and R. Gupta (2003) “AIDS Prevention in Zambia: Implications for
Social Services.” World Development. Vol. 31, No. 1, pp. 149-161. Ruiske, J.,T. Reardon, J. Howard, and V. Kelly (1997) “Developing Cereal-Based Demand for
Fertilizer Among Smallholders in Southern Africa: Lessons Learned and Implications for Other Africa Regions.” Policy Synthesis #30 prepared for USAID Bureau for Africa Office of Sustainable Development. Michigan State University: East Lansing.
Saasa, O. (2000) “Small-scale food processing sector in Zambia.” CTA Working Document No.
8015. Report produced by Technical Centre for Agricultural and Rural Cooperation (CTA): Wageningen, The Netherlands.
Seshamani, V. (1998) “The Impact of Market Liberalization on Food Security in Zambia,” Food
Policy 23(6), 539-551. Seshamani, V., H. White, N. Chisupa, and J. Leavy (2002) “Northern Province Field Report.”
Draft report prepared for DFID. Seewww.ids.uk. mimeo SGS Zambia Ltd. (1999) “The Study of Duality in Zambia: Final Report.” Submitted to USAID
Mission in Zambia: Lusaka. Skjonsberg, E. (1979) Change in an African Village: Kefa Speaks. Kumarian Press: West
Hartford, CT. Skjonsberg, E. (1994) “Kefa Revisited: A Report on Change in Kefa Village, Eastern Province,
Zambia.” Background Report for Zambia Poverty Assessment. Prepared for Population and Health Division, Southern Africa Department, The World Bank: Washington, D.C. mimeo.
Skjonsberg, E. (2003) “A Report on 25 Years of Rural Change in Kefa Village, Eastern
Province, Zambia.” Background Report for Zambia PSIA. Prepared for Social Development Department. The World Bank: Washington, D.C. mimeo.
Smale, .M and T.S. Jayne (2004) “Maize Breeding in East and Southern Africa, 1990-2000.” In S. Haggblade, editor (2004) Building on Successes in African Agriculture. Focus 12 2020 Vision.
International Food and Policy Research Institute (IFPRI): Washington, D.C. see www. ifpri.org
35
Yanggen, D., V. Kelley, T. Reardon, and A. Naseem (1998) “Incentives for Fertilizer Use in
Sub-Saharan Africa: A Review of Empirical Evidence on Fertilizer Response and Profitability.” MSU International Development Working Paper No. 70. Michigan State University: East Lansing.
Whiteside, M. (1998) “Encouraging Sustainable Smallholder Agriculture in Southern Africa in
the Context of Agricultural Services Reform.” Natural Resource Perspectives Number 36. Overseas Development Institute (ODI): London.
World Bank (1994) “Zambia Poverty Assessment”, Report No. 12985-ZA. The World Bank:
Washington, D.C. World Bank (2002a) “Zambia: Poverty Reduction Strategy Paper and Joint Staff Assessment.”
Report No. 24035-ZA. The World Bank: Washington, D.C. World Bank (2002b) “Zambia Agricultural Sector Investment Program: Implementation
Completion Report.” Report No. 24444-ZA. The World Bank: Washington, D.C. World Bank (2003a) A User’s Guide to Poverty and Social Impact Analysis. Poverty Reduction
Group and Social Development Department. Washington, D.C. see www.worldbank.org/psia
World Bank (2003b) “Zambia: The Challenge of Competitiveness and Diversification” Report
No. 25388-ZA Washington, D.C. World Bank (2004) “Zambia Road Rehabilitation and Maintenance Project in Support of First
Phase of the ROADSIP II Program.” ” Report No. 27891-ZA Washington, D.C.
36
Table 1: Typology of Agricultural Producers in Zambia Approx.
# of Producers Approx Farm Size
Technology, Cultivation Practice
Market Orientation
Location Major Constraints
Small-Scale Producers
800,000 hhs < 5ha (with majority cultivating 2 or less ha of rain-fed land)
Hand hoe, minimal inputs, household labor
Staple foods, primarily home consumption
Entire country Remoteness, seasonal labor constraints, lack of input and output markets
Emergent Farmers
50,000 hhs 5 - 20 ha Oxen, hybrid seed and fertilizer, few with irrigation, mostly household labor
Staple foods and cash crops, primarily market orientation
Mostly line-of-rail (Central, Lusaka, Southern Provinces), some Eastern, Western Provinces
Seasonal labor constraints, lack of credit, weak market information
Large-Scale Commercial Farms
700 farms 50 - 150ha Tractors, hybrid seed, fertilizer, some irrigation, modern mang., hired labor
Maize and cash crops
Mostly Central, Lusaka, Southern Provinces
High cost of credit, indebtedness
Large Corporate Operations
10 farms 1000+ ha High mechanization, irrigation, modern mang., hired labor
Maize, cash crops, vertical integration
Mostly Central, Lusaka, Southern Provinces
Uncertain policy environment
Produced by authors. Adapted from World Bank (2003b, p. 66-67), Francis, et al., (1997, p.13). Table 2: Estimated Shares (percent) of Zambian National Production by Typology of Producers Small-Scale Emergent Commercial Corporate Maize 60 15 25 Sorghum 90 8 2 Soybean 20 10 70 Wheat 5 30 45 Groundnuts 85 10 5 Cotton 98 2 Coffee 5 45 50 Sugarcane 40 60 Tobacco 60 40 Milk 20 30 50 Poultry 10 20 20 50 Source: World Bank (2003b, p.67).
37
Table 3: Major Agro-Ecological Zones of Zambia Provinces
Covered % Share of Rural Population
Rainfall Growing Season
Major Agricultural Activities
Soil Quality, Agricultural Potential
Livestock Potential
Region I Southern parts of Western and Southern Province
48 600-800mm
80-120 days
Maize limited by rainfall. Sorghum, millet, sunflower, cassava, cotton, tobacco. Livestock limited by tse-tse fly.
Soils: Shallow Sands Ag Potential: Poor
Limited by existence of tse-tse fly and trypanosomiasis
Region II Most parts of Central, Eastern, Lusaka, Southern Provinces
43 800-1000mm
100-140 days
Maize, groundnuts, and wide range of crops and livestock.
Soils: Moderately leached sandy loams Ag Potential: Good
Absence of tse-tse fly and trypanosomiasis
Region III Northern, Luapala, Copperbelt, Northwestern Provinces
9 1100-1700mm
120-150 days
Maize, bananas, coffee, tea. Limited by high acid soils.
Leached and acidic sands Ag Potential: Moderate
Limited by existence of tse-tse fly and trypanosomiasis
Produced by authors. Adapted from: Francis (et al., 1997), p.5; Copestake (1997, p.9); Milimo, Shilito, and Brock (2000, p.11); World Bank (2003, p.68). Table 4: Distribution of Rural Households, Land per Household and Agricultural Activities, by Province
Northern (5%) Sweet Potato* 3,500 Notes: Numbers are rounded-off approximations. Mixed beans and sweet potato are grown in all provinces. Sources: Government of Zambia (2000); FAO-Agstats (website). Table 6: Estimated Composition of Zambia’s Agricultural GDP (percent) 1994-1995
Average Share 2000-2001 Average Share
Maize 26 19 Other Cereals (sorghum, millet, wheat, rice) 8 7 Roots and Tubers 5 14 Oilseeds and Legumes (groundnuts, beans, sunflower, soybean) 8 7 Cotton 15 19 Fruit/Vegetables/High-value Cash Crops 8 14 Livestock Products 30 20 Total 100 100 Source: World Bank (2003, p.69) Table 7: Major Crops in Southern, Eastern and Northern Provinces (in hectares) Crops Eastern Province Southern Province Northern Province Maize 184,900 166, 020 25,411 Groundnuts 21,903 9,456 13,976 Sorghum/Millet 7,883 8,020 42,691 Sunflowers 8,388 1,519 610 Cotton 23,623 2,348 -- Sweet Potatoes 25,134 4,545 1,826 Cassava* ?? ?? 109,477 Source : FAO-Agstats (website). Note: (*) Data for cassava in Northern Province are estimates.
39
Table 8: Baseline model results Eastern Province Southern Province Northern Province Item Hand-Hoe Oxen Hand-Hoe Oxen Hand-Hoe Oxen 1 2 3 4 5 6 OBJ FCN (ZK) Net Value of Product
Labor Days, total 364 445 283 444 275 345 Note: See Annexes A and B for details on cropping activities, assumptions about inputs, yields and prices.
40
Table 9: Model results with land constraint, output and input price adjustments Eastern Province Item Hand-Hoe Oxen 1a 2b 3c 4d 5e 6f OBJ FCN (ZK) Net Value of Product
1,656,142
3,039,900
3,659,151
4,504,308
7,274,920
12,191,686
Returns (ZK) per household member
276,024
506,650
609,859
750,718
1,212,487
2,031,948
% Staple Food Value of OBJ FCN
84.5
0
38.3
31.1
0
27.6
Food Security Constraint & (Shadow price) ZK/Kg
Maize (-8E-4)
Groundnuts (-0.01)
n/a
Maize (-711)
Groundnuts (-3703)
Maize (-840) Groundnuts
(-5453)
n/a
Maize (-.--)
Groundnuts (-4516)
Cash on Inputs (ZK) 175,080 152,000 294,150 545,680 1,112,000 1,495,200 % Cash Inputs of Gross Value of Production
Labor Days, total 256 293 459 221 235 515 a Land availability restricted (2 ha) for hand-hoe cultivation. Solution is infeasible; b Land availability restricted for hand-hoe cultivation, without the food-security constraint; c Model results with household labor increased by 20 percent (for hand hoe); d Model results with 2 ha land constraint. Land constraint is binding; e Results after removing the food-security constraint for oxen technology while limiting land to 2 ha; f Model results with household labor increased by 20 percent (for oxen). Cotton and sorghum are not shown, because these activities never enter solution.
41
Table 10: Model results under remoteness scenario, Eastern Province Item Hand-Hoe Oxen
Cash on Inputs (ZK) 276,320 1,740,100 % Cash Inputs of Gross Value of Production
10.1
15.8 Land (ha) 3.16 3.46 Crops (Ha) LM1 0.47 LM2 1.41 LM5 0.83 GR2 0.59 GR5 0.40 MIL1 0.69 SP2 2.23 Returns to Land (ZK/ha) 773,322 2,663,734 Labor Days, total 364 393 Source: Model results.
33 Model results with price of sunflowers lowered by 30 percent and maize by 15 percent, while the prices of fertilizer, hybrid seed and fixed variable inputs are raised by 30 percent (for hand hoe). 34 Model results with price of sunflower lowered by 30 percent and maize by 15 percent, while the prices of fertilizer, hybrid seed and fixed variable inputs are raised by 30 percent (for oxen).
42
Table 11: Labor decreased by 20 percent (columns 2 and 4). Columns 1 and 3 show results from the baseline model, Eastern Province Eastern Province
Cash on Inputs (ZK) 245,070 195,990 1,161,600 861,790 % Cash Inputs of Gross Value of Production
8.3
10.2
10.3
9.9
Land (ha) 3.16 2.47 4.16 3.46 Crops (Ha) LM1 0.47 0.77 LM2 1.41 1.06 LM5 2.00 1.83 LM6 HM7 0.014 GR2 0.59 0.588 GR5 0.40 0.40 MIL1 0.69 0.05 SP2 1.76 1.22 Returns to Land (ZK/ha) 850,883 695,721 2,406,060 2,254,212 Labor Days, total 364 268 445 367 a Baseline model results for both oxen and hand-hoe cultivation. b A 20 percent decrease in labor availability results in less land being cultivated, lower objective function value, and increase in LM1 but lowering of LM2, no change in GR2 and a huge drop in land allocated to millet.
43
Table 12: Net incomes by crop, financial model Crop Net income
($/ha) Per farm (3 ha) ($)
Per person, 6 persons per HH ($/person)
Per person per day ($/person/day)
Local maize 52 156 26 0.07 Hybrid maize 75 225 38 0.10 Groundnuts 149 447 74 0.20 Source: Keyser, 2002, using best available technology and management. Table 13: Net incomes by crop, financial model Crop Net income
($/ha) Per farm (3 ha) ($)
Per person, 6 people per HH ($)
Per person per day ($)
Cotton 89 267 44 0.12 Burley tobacco 579 1737 290 0.79 Paprika 182 546 91 0.25 Source: Keyser, 2002, using best available technology and management. Table 14: Comparison of Yields, Inputs, Labor, and Returns of Different Smallholder Crops 1994/5 and 2001/2 Crop Season Mgt
Source: Household model results Figure 7: Impacts of fertilizer price changes on model solution, Eastern Province.
Net returns vs fertilizer price increases (Hand hoe)
0.00
500.00
1,000.00
1,500.00
2,000.00
2,500.00
3,000.00
3,500.00
4,000.00
10 20 30 40 50 60 70 80 90 100 110 120
Percent of original price
Net
retu
rns
Fert quantity used (Kilos) Obj Fcn V
50
ANNEX
ZAMBIA SMALLHOLDER MODEL: STRUCTURE, ASSUMPTIONS AND DATA
Model Structure: As part of the World Bank’s 1994 Zambia Poverty Assessment, a household model was designed to better understand the economic opportunities and constraints of “representative” smallholder farmer households. This model was used to measure the impacts of changes in policies and investments on crops produced and marketed, technologies and cultivation practices, labor and land allocation and constraints and incomes (see World Bank, 1994; Siegel and Alwang, 1994; Alwang, Siegel and Jorgensen, 1996). The model was updated to reflect conditions in 2003 and regionalized to reflect conditions in Eastern, Southern, and Northern provinces. A deterministic single-period LP model was used and the models’ parameters are assumed fixed for the duration of the planning horizon, which is a single year. All farm-level decisions (e.g., crop, land, labor usage) are assumed to be made at the beginning of the planning horizon, when land-preparation and planting decisions take place. Crop activities are divided into monthly periods to reflect the seasonality of crop production and labor requirements. The model only considers incomes from on-farm agricultural activities.35 By articulating the objectives, resource requirements and resource constraints facing representative rural households, we predict their choices (crop production activities) and outcomes (measured by net value of production, household income, and other indicators). The data used were taken from various sources, notably the 1994 model and a paper prepared by Dr. Francis Mwape of University of Zambia that updates many of the parameters (see Mwape, 2003). The model maximizes returns to fixed assets, subject to the technologies and constraints. The “production technologies” are basically crop budgets, as summarized below. The constraints apply to land, monthly labor, food security and cash. The model includes the effects of household composition, access to land, technology and inputs, and patterns of seasonality as they affect the availability of household labour and household food security. Several scenarios of the model are analysed. These scenarios provide insights into smallholder behaviour in response to changes in the economic and physical environment. The LP model can be expressed as the choice of activities to maximize the net value of production from j=1,...,n activities purchasing i=1,...,q inputs for these activities, such that
subject to input requirements and constraints for i=1,...,m resources:
35 Most smallholder households derive a majority of their income from agriculture activities. There is a general lack of non-farm non-agricultural activities (SGS Zambia, Ltd., 1999; Milimo, Shilito, Brock, 2003; Skonsberg, 2003).
X c Xp = Vmax jij
q
1=i
n
1j=jj
n
1j=
- ∑∑∑
51
and the non-negativity constraint:
where: V = net value of farm production (gross value of production minus cost of purchased inputs), Xj = level of the jth farm activity (e.g., hectares of hybrid maize using a given technology and management practice), and n is the number of possible activities under consideration (e.g., different crops using different technologies and management practices), pj = per hectare value from the jth farm output (price times yield), cij = cost of the ith purchased input used for 1 hectare of production of the jth activity, aij = quantity of ith resource (e.g., labor) required for one hectare of the jth activity, bi = amount of ith resource available to farm (e.g., household's total labor availability for a given month). Solution of the LP model provides information on how changes in resource endowments, bi, change the net value of production, V. If a resource constraint is binding, then it is possible to calculate the shadow price of that scarce resource. The shadow price indicates the value to the household of an additional unit of the scarce resource. Thus, the shadow price can be considered as the price the household would be willing to pay for an extra unit of a scarce resource, such as labor. By examining shadow prices of the binding constraints, insights can be gained about the relative importance of different constraints. For example, by separating labor requirements by month, the value of labor inputs during different times of the year can be computed. The model thus quantifies the value of each constraint, in terms of how much it contributes to the objective function. Objective Function of the Household It is assumed that two objectives guide smallholders’ decision-making. First, household behavior is governed by a safety-first rule that compels households to produce a minimum amount of staple foods. Second, it is assumed that, having met the first objective, the household maximizes net income from crop production activities. The safety-first rule (i.e., the food-security objective) is modeled as a constraint. That is, a constraint is used to “force” the household to produce enough staple food to feed itself before other crop activities can be selected to maximize the net value of production. Resource allocation decisions are also subject to seasonal labor constraints. In addition, household decisions depend on the level of available technology, the amount of available cash and land, and the availability of input and output markets (i.e., timeliness of delivery). Types of Households
, b Xa ijij
m
1j=
≤∑
0 Xj≥
52
For the model it is assumed that traditional households use hand-hoe technology and emergent households use oxen technology. It is thus possible to use the model to isolate differences in crop mix, labor allocation, etc. based on use of hand-hoe or oxen technology. Oxen can be used by emergent households during land preparation, weeding, harvest, and for post-harvest activities. It is common practice in Zambia for several households to share use of oxen. Households with access to oxen are assumed to contribute labor, upkeep costs of the oxen, and upkeep cost of oxen-related equipment. Oxen activities are thus distinguished from hand-hoe activities by their higher returns, different labor requirements, and higher input costs. It is assumed that both types of households depend solely on household labor for crop production. The household labor endowment for crop production depends on the composition of the household (i.e., the number of adult equivalent workers. See tables A and B.
53
ANNEX A:
Summary of Crop Production Activities by Province Table A.1 Summary of information on crop production activities for Eastern Province
Crop Production Characteristics Labor Requirements in Labor Days/Ha Code Crop Tech Variety Management Fert Yield Kg/Ha Prep Plant Weed Fert Guard Harvest P-Harvest Total LM1 Maize Hand Local High No 1,200 34 8 20 0 10 12.4 12 96.40LM2 Maize Hand Local Low No 1,020 30 7 18 0 10 10.54 10.8 86.34HM3 Maize Hand Hybrid High Yes 2,200 38 6 22 8 12 17 17 120.00HM4 Maize Hand Hybrid Low Yes 1,870 34 6 21 8 11 14 15.3 109.30LM5 Maize Ox Local High No 2,400 17 6 22 0 12 18.4 16 91.40LM6 Maize Ox Local Low No 2,040 15 6 19.8 0 10 16.56 14.4 81.76HM7 Maize Ox Hybrid High Yes 4,400 18 6 26 8 11 27.2 25 121.20HM8 Maize Ox Hybrid Low Yes 3,740 15 6 22 6 10 24.48 22.5 105.98 GR1 Groundnuts Hand Local High No 400 52 8 32 0 11 24 64 191.00GR2 Groundnuts Hand Local Low No 340 40 8 25 0 10 21.6 57.6 162.20GR3 Groundnuts Hand Hybrid High No 700 47 8 24 0 12 40 64 195.00GR4 Groundnuts Hand Hybrid Low No 595 38 8 21.6 0 10 36 57.6 171.20GR5 Groundnuts Ox Local High No 500 8 8 35.2 0 10 32 44 137.20GR6 Groundnuts Ox Local Low No 425 8 8 27.5 0 9 28.8 39.6 120.90GR7 Groundnuts Ox Hybrid High No 900 8 8 26.4 0 12 48 90 192.40GR8 Groundnuts Ox Hybrid Low No 765 8 8 23.76 0 10 43.2 81 173.96 SUN1 Sunflower Hand Local Low No 800 40 5.2 36 0 0 10 6 97.20SUN2 Sunflower Ox Local High No 1,600 16 5.2 36 1 0 13.6 16 87.80 MIL1 Millet Hand Local Low No 2,000 34 5.2 22.8 0 36 12.4 36 146.40MIL2 Millet Ox Hybrid High Yes 2,800 3.2 5.2 20.52 1.2 36 27.2 36 129.32 SP1 Sweet Potatoes Hand Local Low No 4,000 60 4 24 0 0 16 20 124.00SP2 Sweet Potatoes Ox Hybrid High No 12,000 8 12 21.6 0 0 36 40 117.60 COT1 Cotton Hand Hybrid High Yes 1,200 34 2 30 2 22 50 4.8 144.80COT2 Cotton Hand Hybrid Low No 1,020 30 2 27 0 20 42.5 3.2 124.70COT3 Cotton Ox Hybrid High Yes 1,400 11 2 20 2 22 50 4 111.00COT4 Cotton Ox Hybrid Low No 1,190 9 2 16 0 19 42.5 3.2 91.70
54
Table A.2. Summary of information on crop production activities for Southern Province
Crop Production Characteristics Labor Requirements in Labor Days/Ha
Summary of model assumptions Table B.1 Summary of model assumption for Eastern Province Code Seed Fert Variable Costs Fixed Costs Total Costs Output Price Gross Returns Net Returns Net Returns
Series # Title Date Author ARWPS 1 Progress in Public Expenditure Management in
Africa: Evidence from World Bank Surveys
January 1999 C. Kostopoulos
ARWPS 2 Toward Inclusive and Sustainable Development in the Democratic Republic of the Congo
March 1999 Markus Kostner
ARWPS 3 Business Taxation in a Low-Revenue Economy: A Study on Uganda in Comparison with Neighboring Countries
June 1999 Ritva Reinikka Duanjie Chen
ARWPS 4 Pensions and Social Security in Sub-Saharan Africa: Issues and Options
October 1999 Luca Barbone Luis-A. Sanchez B.
ARWPS 5 Forest Taxes, Government Revenues and the Sustainable Exploitation of Tropical Forests
January 2000 Luca Barbone Juan Zalduendo
ARWPS 6 The Cost of Doing Business: Firms’ Experience with Corruption in Uganda
June 2000 Jacob Svensson
ARWPS 7 On the Recent Trade Performance of Sub-Saharan African Countries: Cause for Hope or More of the Same
August 2000 Francis Ng and Alexander J. Yeats
ARWPS 8 Foreign Direct Investment in Africa: Old Tales and New Evidence
November 2000 Miria Pigato
ARWPS 9 The Macro Implications of HIV/AIDS in South Africa: A Preliminary Assessment
November 2000 Channing Arndt Jeffrey D. Lewis
ARWPS 10 Revisiting Growth and Convergence: Is Africa Catching Up?
December 2000 C. G. Tsangarides
ARWPS 11 Spending on Safety Nets for the Poor: How Much, for How Many? The Case of Malawi
January 2001 William J. Smith
ARWPS 12 Tourism in Africa February 2001 Iain T. Christie D. E. Crompton
ARWPS 13 Conflict Diamonds
February 2001 Louis Goreux
ARWPS 14 Reform and Opportunity: The Changing Role and Patterns of Trade in South Africa and SADC
March 2001 Jeffrey D. Lewis
60
Africa Region Working Paper Series Series # Title Date Author
ARWPS 15 The Foreign Direct Investment Environment in
Africa
March 2001 Miria Pigato
ARWPS 16 Choice of Exchange Rate Regimes for Developing Countries
April 2001 Fahrettin Yagci
ARWPS 18 Rural Infrastructure in Africa: Policy Directions
June 2001 Robert Fishbein
ARWPS 19 Changes in Poverty in Madagascar: 1993-1999 July 2001 S. Paternostro J. Razafindravonona David Stifel
ARWPS 20 Information and Communication Technology, Poverty, and Development in sub-Saharan Africa and South Asia
August 2001 Miria Pigato
ARWPS 21 Handling Hierarchy in Decentralized Settings: Governance Underpinnings of School Performance in Tikur Inchini, West Shewa Zone, Oromia Region
September 2001 Navin Girishankar A. Alemayehu Yusuf Ahmad
ARWPS 22 Child Malnutrition in Ethiopia: Can Maternal Knowledge Augment The Role of Income?
October 2001 Luc Christiaensen Harold Alderman
ARWPS 23 Child Soldiers: Preventing, Demobilizing and Reintegrating
November 2001 Beth Verhey
ARWPS 24 The Budget and Medium-Term Expenditure Framework in Uganda
December 2001 David L. Bevan
ARWPS 25 Design and Implementation of Financial Management Systems: An African Perspective
January 2002 Guenter Heidenhof H. Grandvoinnet Daryoush Kianpour B. Rezaian
ARWPS 26 What Can Africa Expect From Its Traditional Exports?
February 2002 Francis Ng Alexander Yeats
ARWPS 27 Free Trade Agreements and the SADC Economies February 2002 Jeffrey D. Lewis Sherman Robinson Karen Thierfelder
ARWPS 28 Medium Term Expenditure Frameworks: From February 2002 P. Le Houerou Robert
61
Africa Region Working Paper Series Series # Title Date Author
Concept to Practice. Preliminary Lessons from Africa
Taliercio
ARWPS 29 The Changing Distribution of Public Education Expenditure in Malawi
February 2002 Samer Al-Samarrai Hassan Zaman
ARWPS 30 Post-Conflict Recovery in Africa: An Agenda for the Africa Region
April 2002 Serge Michailof Markus Kostner Xavier Devictor
ARWPS 31 Efficiency of Public Expenditure Distribution and Beyond: A report on Ghana’s 2000 Public Expenditure Tracking Survey in the Sectors of Primary Health and Education
May 2002 Xiao Ye S. Canagaraja
ARWPS 33 Addressing Gender Issues in Demobilization and Reintegration Programs
August 2002 N. de Watteville
ARWPS 34 Putting Welfare on the Map in Madagascar August 2002 Johan A. Mistiaen Berk Soler T. Razafimanantena J. Razafindravonona
ARWPS 35 A Review of the Rural Firewood Market Strategy in West Africa
August 2002 Gerald Foley Paul Kerkhof Djibrilla Madougou
ARWPS 36 Patterns of Governance in Africa September 2002 Brian D. Levy
ARWPS 37 Obstacles and Opportunities for Senegal’s International Competitiveness: Case Studies of the Peanut Oil, Fishing and Textile Industries
September 2002 Stephen Golub Ahmadou Aly Mbaye
ARWPS 38 A Macroeconomic Framework for Poverty Reduction Strategy Papers : With an Application to Zambia
October 2002 S. Devarajan Delfin S. Go
ARWPS 39 The Impact of Cash Budgets on Poverty Reduction in Zambia: A Case Study of the Conflict between Well Intentioned Macroeconomic Policy and Service Delivery to the Poor
November 2002 Hinh T. Dinh Abebe Adugna Bernard Myers
ARWPS 40 Decentralization in Africa: A Stocktaking Survey November 2002 Stephen N. Ndegwa
ARWPS 41 An Industry Level Analysis of Manufacturing Productivity in Senegal
December 2002 Professor A. Mbaye
62
Africa Region Working Paper Series Series # Title Date Author ARWPS 42 Tanzania’s Cotton Sector: Constraints and
Challenges in a Global Environment
December 2002 John Baffes
ARWPS 43 Analyzing Financial and Private Sector Linkages in Africa
January 2003 Abayomi Alawode
ARWPS 44 Modernizing Africa’s Agro-Food System:
Analytical Framework and Implications for Operations
February 2003 Steven Jaffee Ron Kopicki Patrick Labaste Iain Christie
ARWPS 45 Public Expenditure Performance in Rwanda March 2003 Hippolyte Fofack C. Obidegwu Robert Ngong
ARWPS 46 Senegal Tourism Sector Study March 2003 Elizabeth Crompton Iain T. Christie
ARWPS 47 Reforming the Cotton Sector in SSA March 2003 Louis Goreux John Macrae
ARWPS 48 HIV/AIDS, Human Capital, and Economic Growth Prospects for Mozambique
April 2003 Channing Arndt
ARWPS 49 Rural and Micro Finance Regulation in Ghana: Implications for Development and Performance of the Industry
June 2003 William F. Steel David O. Andah
ARWPS 50 Microfinance Regulation in Benin: Implications of the PARMEC LAW for Development and Performance of the Industry
June 2003 K. Ouattara
ARWPS 51 Microfinance Regulation in Tanzania: Implications for Development and Performance of the Industry
June 2003 Bikki Randhawa Joselito Gallardo
ARWPS 52 Regional Integration in Central Africa: Key Issues June 2003 Ali Zafar Keiko Kubota
ARWPS 53 Evaluating Banking Supervision in Africa June 2003 Abayomi Alawode
ARWPS 54 Microfinance Institutions’ Response in Conflict Environments: Eritrea- Savings and Micro Credit Program; West Bank and Gaza – Palestine for Credit and Development; Haiti – Micro Credit
June 2003
Marilyn S. Manalo
63
Africa Region Working Paper Series Series # Title Date Author
National, S.A.
AWPS 55 Malawi’s Tobacco Sector: Standing on One Strong leg is Better than on None
June 2003 Steven Jaffee
AWPS 56 Tanzania’s Coffee Sector: Constraints and Challenges in a Global Environment
June 2003 John Baffes
AWPS 57 The New Southern AfricanCustoms Union Agreement
June 2003 Robert Kirk Matthew Stern
AWPS 58a How Far Did Africa’s First Generation Trade Reforms Go? An Intermediate Methodology for Comparative Analysis of Trade Policies
June 2003 Lawrence Hinkle A. Herrou-Aragon Keiko Kubota
AWPS 58b How Far Did Africa’s First Generation Trade Reforms Go? An Intermediate Methodology for Comparative Analysis of Trade Policies
June 2003 Lawrence Hinkle A. Herrou-Aragon Keiko Kubota
AWPS 59 Rwanda: The Search for Post-Conflict Socio-Economic Change, 1995-2001
October 2003 C. Obidegwu
AWPS 60 Linking Farmers to Markets: Exporting Malian Mangoes to Europe
October 2003 Morgane Danielou Patrick Labaste J-M. Voisard
AWPS 61 Evolution of Poverty and Welfare in Ghana in the 1990s: Achievements and Challenges
October 2003 S. Canagarajah Claus C. Pörtner
AWPS 62 Reforming The Cotton Sector in Sub-Saharan
Africa: SECOND EDITION
November 2003 Louis Goreux
AWPS 63 (E)
Republic of Madagascar: Tourism Sector Study November 2003 Iain T. Christie D. E. Crompton
AWPS 63 (F)
République de Madagascar: Etude du Secteur Tourisme
November 2003 Iain T. Christie D. E. Crompton
AWPS 64 Migrant Labor Remittances in Africa: Reducing Obstacles to Development Contributions
Novembre 2003 Cerstin Sander Samuel M. Maimbo
AWPS 65 Government Revenues and Expenditures in Guinea-Bissau: Casualty and Cointegration
January 2004 Francisco G. Carneiro Joao R. Faria Boubacar S. Barry
64
Africa Region Working Paper Series Series # Title Date Author AWPS 66 How will we know Development Results when we
see them? Building a Results-Based Monitoring and Evaluation System to Give us the Answer
June 2004 Jody Zall Kusek Ray C. Rist Elizabeth M. White
AWPS 67 An Analysis of the Trade Regime in Senegal (2001) and UEMOA’s Common External Trade Policies
June 2004 Alberto Herrou-Arago Keiko Kubota
AWPS 68 Bottom-Up Administrative Reform: Designing Indicators for a Local Governance Scorecard in Nigeria
June 2004 Talib Esmail Nick Manning Jana Orac Galia Schechter
AWPS 69 Tanzania’s Tea Sector: Constraints and Challenges
June 2004 John Baffes
AWPS 70 Tanzania’s Cashew Sector: Constraints and Challenges in a Global Environment
June 2004 Donald Mitchell
AWPS 71 An Analysis of Chile’s Trade Regime in 1998 and 2001: A Good Practice Trade Policy Benchmark
July 2004 Francesca Castellani A. Herrou-Arago Lawrence E. Hinkle
AWPS 72 Regional Trade Integration inEast Africa: Trade and Revenue Impacts of the Planned East African Community Customs Union
August 2004 Lucio Castro Christiane Kraus Manuel de la Rocha
AWPS 73 Post-Conflict Peace Building in Africa: The Challenges of Socio-Economic Recovery and Development
August 2004 Chukwuma Obidegwu
AWPS 74 An Analysis of the Trade Regime in Bolivia in2001: A Trade Policy Benchmark for low Income Countries
August 2004 Francesca Castellani Alberto Herrou-Aragon Lawrence E. Hinkle
AWPS 75 Remittances to Comoros- Volumes, Trends, Impact and Implications
October 2004 Vincent da Cruz Wolfgang Fendler Adam Schwartzman
AWPS 76 Salient Features of Trade Performance in Eastern and Southern Africa
October 2004 Fahrettin Yagci Enrique Aldaz-Carroll
AWPS 77 Implementing Performance-Based Aid in Africa November 2004 Alan Gelb Brian Ngo Xiao Ye
AWPS 78 Poverty Reduction Strategy Papers: Do they matter for children and Young people made vulnerable by HIV/AIDS?
December 2004 Rene Bonnel Miriam Temin Faith Tempest
AWPS 79 Experience in Scaling up Support to Local Response in Multi-Country Aids Programs (map) in Africa
December 2004 Jean Delion Pia Peeters Ann Klofkorn Bloome
65
Africa Region Working Paper Series Series # Title Date Author AWPS 80 WHAT MAKES FDI WORK? A PANEL
ANALYSIS OF THE GROWTH EFFECT OF FDI IN AFRICA
February 2005 Kevin N. Lumbila
AWPS 81 Earnings Differences between Men and Women in Rwanda
February 2005 Kene Ezemenari Rui Wu
AWPS 82 The Medium-Term Expenditure Framework The Challenge of Budget Integration in SSA countries
April 2005 Chukwuma Obidegwu
AWPS 83 Rules of Origin and SADC: The Case for change in the Mid Term Review of the Trade Protocol
June 2005 Paul Brenton Frank Flatters Paul Kalenga
AWPS 84 Sexual Minorities, Violence and AIDS in Africa
July 2005 Chukwuemeka Anyamele Ronald Lwabaayi Tuu-Van Nguyen, and Hans Binswanger
AWPS 85 Poverty Reducing Potential of Smallholder Agriculture in Zambia: Opportunities and Constraints
