ZAIP Presentation(18 July 2013) by Rukuni

8/12/2019 ZAIP Presentation(18 July 2013) by Rukuni

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ZIMBABWE AGRICULTUREINVESTMENT PLAN (ZAIP)2013-2017

A COMPREHENSIVE FRAMEWORK FOR THE DEVELOPMENT

OF ZIMBABWES AGRICULTURE SECTOR

VALIDATION WORKSHOP18 JULY 2013

RAINBOW TOWERS, HARARE ZIMBABWE


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OUTLINE Background

Situation analysis and problem definition

ZAIP strategic framework

CAADP provisions

MTP provisions

Draft Agricultural sector policy provisions

ZAIP strategic thrust

ZAIP Values

ZAIP goal

ZAIP business model

ZAIP result areas 2


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STRONG NATURAL RESOURCE BASE

Zimbabwe has a wide range of natural resourcesthat include

arable land: Agriculture is practiced on 39.9% of totalland area (15.8 million ha) of which 10.9% (4.31 million

ha) is arable, Forests and wild life: constitutes 40.39% of total land

area and inhabited by different wildlife species.

water , minerals and other natural resources

These are adequate to support the developmentof a sustainable agricultural sector in line with theMDGs and the CAADP targets for reduction ofpoverty and food insecurity.

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IMPORTANCE OF AGRICULTURE economic and political developments between 2000

and 2008 re-configuredthe countrys agricultural andfood sectors.

Period was characterized by downward trends butdespite that the agriculture sector still important inthat: continues to provide livelihood to approximately 70%of

the population,

contribute between 15% -20% of GDP and 40%of exportsand

supplies 63% of agro-industrial raw materials. Allows for a firm basis for employmentgeneration,

and reduction ofpovertyandfood insecurity andoverall economic growth

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RECENT TRENDS IN THE SECTOR Zimbabwe produces cereals (maize, wheat, sorghum

and millet), oilseeds, livestock (beef, dairy and smallstock [goats, poultry, pigs, and sheep]) and fish.

Since 1996, Zimbabwe experienced general decrease incrop and livestock production, leading to decrease in

agriculture sector GDP and exports Agriculture-bounced in 2009, growing by 33% in 2010,

9.6% in 2011 and 4.6% in 2012, expected to grow by5.6% in 2013

Between 2002 and 2005, cattle population on largescale farms declined from about 25% of the nationalherd to less than 13% of the national herd

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DEFINING THE PROBLEM The sector has undergone massive changes in the

farm size leading to increased number of farmers

and relatively smaller sizes of farms; however the

sector is operating well below its production,

productive and competitive potentials.

There has been remarkable economic growth; there

still remain challenges to eradicate poverty, food

insecurity and malnutrition.

Agric sector growth largely been driven by

expansion of the planted area whilst productivity

has g been declining.

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DEFINING THE PROBLEM Despite the emerging enabling environment,

Zimbabwe has not fully utilized the agricultural

sector production potential.

This is mainly due to lack of productive and

competitive capacity among farmers.

Country struggling with mobilizing catalytic public

investment to attract private investment around the

prime movers thus providing the link between

public and private investment.

Thus farmers have not optimized participation in

domestic and export value chains because of weak

public and private support systems 7


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PUBLIC SECTOR INVESTMENT IN

AGRICULTURE GoZ is committed to increasing the agriculture sector budget to at

least 10% of national budget in line with CAADP Even though the agriculture sector budget increased from 2.74% in

2009 to 5.94% in 2011, it however remains below the CAADPtarget of at least 10% of the national budget.

Between 2009 and 2011, the major sources of funding to

agriculture sectors were Government (30%), Banks (45%) andinternational lines of credit (18%), development partners 5%

Most allocations to the sector are utilized for grain procurement(29%) and input support (31%) and provision of extension/supportservices (34%).

The agriculture sector budget is channeled through manyinstitutions whose coordination mechanisms are not very strong .

The failure to align adequate agriculture budget support has led toan under-funding of agricultural support services andinfrastructural development as well as governments priorityprojects 8


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OPPORTUNITIES .. now relatively better prospects for improved

performance of the agriculture sector due to: the prevailing macroeconomic stability that has improved

producer incentives;

the elimination of exchange rate controls and trade

restrictions have improved producer incentives andprofitability;

the expected increase in world commodity prices shall

increase exports and profits and make agriculture production

attractive; the opportunities that have arisen in the agro-fuels sector;

and the much larger number of farms of smaller size than in

the past that today occupy the best arable land of Zimbabwe9


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ZAIP STRATEGIC FRAMEWORK: Overall The ZAIP derives its policy direction from the MTP and

the draft agricultural policy frameworks and providesthe business model for players in the sector

It draws from the CAADP framework particularly thefour CAADP pillars and principles

Achievement of MTP and agricultural sector objectiveswill involve many players including governmentinstitutions, private sector players, farmers and theirorganizations as well as development partners.

The business model outlines a strategic businessjustification for each stakeholder to contribute to theZAIP

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ZAIP STRATEGIC FRAMEWORK

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DRAFT AGRICULTURAL

SECTOR POLICY

MEDIUM TERM PLAN (MTP)

ZIMBABWE AGRICULTURAL INVESTMENT

PROGRAMME (ZAIP) CAADP

PLILLARS

(1-4)

AND

PRIN

CIPLES

ZAIP

STRATEGIC

THRUSTS

ZAIP

VALUES

FOUR ZAIP

INTERMEDIAT

E RESULT

AREAS

ZAIP

BUSINESS

MODEL

Implementatio

n mechanisms:

Participatory

and inclusive

engagement of

actors in thesector


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Provisions of the MTP Sees sector as important to ensure national food security and

to provide throughput to the manufacturing sector;

MTP focuses on strengthening input and product markets andcreating new capacities for increasing yields, wideningopportunities for new strategic choices that lead tomodernization and commercialization of agriculture across allsub sectors.

Priority areas for intervention in the MTP include capacitydevelopment of various farmers groups to enable them toproduce commercially, policy and institutional reforms to

create an enabling environment for farmers and privatesector actors, increased investment in key areas such asinfrastructure, research and technology development as wellas attraction of private sector players.

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PROVISIONS OF THE MTP(Cont) Some of the specific areas of intervention include:

Targeted interventions on specific products such ascereals, tobacco, cotton, horticulture and livestock

Targeted interventions in irrigation, mechanisation,research, extension, education and training, financing,inputs supply management, as well as marketing andtrade.

Implementation of National Programmes and Projectsnamely Completion and Rationalisation of the LandReform Programme, Irrigation Rehabilitation, Expansionand Development Programme as well as StrengtheningNational Agricultural Research, Extension and TrainingSystems.

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PROVISIONS OF THE DRAFT

AGRICULTURAL SECTOR POLICY The policy envisions a prosperous, diverse and competitive

agriculture sector ensuring food and nutrition security andsignificantly contributing to national development

In line with MTP the specific objectives of the agriculturalsector policy are to:

Assure national and household food and nutrition security; Ensure that the existing agricultural resource base is maintained

and improved;

Generate income and employment to feasible optimum levels;

Increase agricultures contribution to the Gross Domestic Product

(GDP); Contribute to sustainable industrial development through the

provision of home-grown agricultural raw materials; and

Expand significantly the sector's contribution to the nationalbalance of payments.

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PROVISIONS OF THE DRAFT

AGRICULTURAL SECTOR POLICY Some of the specific areas of intervention in the

policy include: Targeted interventions on specific products such as

cereals, tobacco, cotton, horticulture, livestock and agroforestry;

Review of agricultural legislation and regulatorymechanisms;

Interventions on agricultural institutions (institutionalreforms) such as the ministry, parastatals and farmer

organisations; Targeted interventions in irrigation, mechanisation,

research, extension, education and training, financing,inputs supply management, marketing and trade, HIV andAIDS mainstreaming;

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ZAIP OBJECTIVE

to facilitate sustainable increase in

production, productivity and competitiveness

of Zimbabwean agriculture through building

capacity of farmers and institutions,improving the quantity and quality of public,

private and development partner investment

and policy alignment.

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ZAIP VALUES The key state and non-state actors are bound by common

ZAIP values that include: Farmer development and capacity building through maximum

exploitation of the local comparative advantages

Customer oriented farming systems to meet changing needs anddesires of domestic and international markets;

Consistent public sector investment to ensure attractiveness ofthe agricultural sector to the private sector;

Consistent alignment, interpretation and implementation of theagricultural policies, decisions and regulations to reduce theperceived uncertainty and risks;

Sustainable utilization of the natural resources and theenvironment;

Continuous stakeholder consultations to ensure that majordecisions are acceptable.

Efficient delivery of agricultural services leading to widespread

adoption of good agricultural practices. 18


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ZAIP BUSINESS MODEL SUMMARY Assumptions:

The implementation of ZAIP will need financial, policy andpolitical commitment from all stakeholders namelygovernment, private sector, farmers and developmentpartners. The following assumptions have to be made for theZAIP business model to take root:

That government will be able to avail the requisite public sectorbudgetary financing that is required to trigger finances fromothers actors;

That private sector, development partners and farmers are able torespond to the catalytic finance;

There is adequate commitment for policy alignment and supportfor institutional reforms from stakeholders; and,

There is cooperation, shared interest, and unity of purpose forachievement among all key stakeholders namely government,private sector, farmers and development partners.

That if farmers are capacitated, they will operate effectively, andcompete domestically, regionally and internationally.19


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BUSINESS MODEL (SUMMARY

outline) Government, development partners and private sector

investors will provide catalytic financing as well asother forms of patient money such as social venturecapital and equity investments

Investment will be into specific strategic areas such asproductive infrastructure, capacity development viablesmall and medium sized agribusinesses and farmers(syndicates, cooperatives and other groups) to triggerlong term funding in investments that increaseproduction and productivity.

The targeting of farmers in groups, cooperatives andsyndicates works better for farmers and makes it easierfor private sector and government to deal with them.

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BUSINESS MODEL (SUMMARY

outline) This will lead to farmers regaining some of the

domestic markets lost to imports, and eventuallyregain the export markets leading to Zimbabwe gainingits status as the breadbasket of Southern Africa.

Catalytic investment by government and developmentpartners will be specially targeted at strategic areaswhich provide leverage for the farmers and privatesector to operate competitively.

Strong partnerships between government and privatesector will need to be formed so that investment dealsare appropriately structured

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INVESTMENT OPPORTUNITIES

AND INCENTIVES IN ZIMBABWE Zimbabwe as an agro-based economy provides abundant opportunities for

investment in value addition in the agriculture sector, for instance, meatprocessing, fish processing, food processing, fruit juice manufacturing,horticulture and floriculture, processing of cotton lint, cigarettemanufacturing sugar milling and timber processing.

Investors can also commit resources in primary production of food andcash crops, primary horticulture, game, wild life ranching, livestock, Poultryfarming, fishing and fish farming.

Investments in the agricultural sector can take many forms such as Public Private partnerships (PPPs),

equity and non-equity partnerships,

Build Own Operate and Transfer(BOOT),

Build Operate and Transfer (BOT),

joint ventures (JVs),

contract farming,

green field businesses, etc

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INVESTMENT OPPORTUNITIES

AND INCENTIVES IN ZIMBABWE Like many other developing countries, Zimbabwe offers a

number of tax and customs incentives in the form of taxholidays, reduced tax rates, and accelerated depreciation.

Some of the tax incentives relevant to the agricultural sector

include: Income Tax

Build Own Operate and Transfer (BOOT) and BOT Arrangements

Special Initial allowance (SIA)

Farmers Special Deductions

Double Taxation Agreements

Value Added Tax

Farming inputs and equipment are subject to VAT at 0% [Section 10 a. r.w. 2ndschedule of the Regulations]

Deferment of collection of VAT on the importation of capital goods[Section 12A] 23

ZAIP INTERMEDIATE RESULT


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AREAS(SUMMARY)

There are four Intermediate Result Areas identifiedbased on the provisions from the MTP, Draft

Agricultural Policy and CAADP framework, the key

issues from the literature review and stakeholder

consultations were clustered in the formulation of

four ZAIP intermediate result areas as follows:

Intermediate Result Area 1: Increasing production and

productivity through improved management andsustainable use of land, water, forestry and wildlife

resources;

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AREAS(SUMMARY) Intermediate Result Area 2: Increased participation of

farmers in domestic and export markets through

development of an efficient agricultural marketing

system and an enabling environment for competitive

agricultural production, investment (Domestic and FDI)and Trade;

Intermediate Result Area 3: Ensuring food and nutrition

security by facilitating a cohesive multi-sectoral

agricultural response; and,

Intermediate Result Area 4:Improving Agricultural

Research, Technology Dissemination and Adoption.

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Intermediate Result Area 1

Increasing production and productivity

through improved management and

sustainable use of land, water, forestry and

wildlife resources;

Estimated budget: US$ 1,056,940,000 (22 %

of total budget)

Four sub result areas as follows

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Sub result area 1 Improving land rights security of users-Securing long

term investments on land requires secure and

sustainable tenure encompassing the full basket ofrights

The illustrative activities for sub result area include: Reviewing the land tenure laws;

Conduct land-use surveys and set up decentralized landadministration structures;

Conduct consultations on compensation for inherited farminfrastructure and improvements;

Basket of rights include: Use rights

Transfer rights

Exclusion and inclusion rights

Enforcement rights

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Sub result area 2 Increasing the area of land under sustainable land

management;

The illustrative activities include for this sub result

area include:

Promoting up/out scaling of adoption of conservationfarming.

Identifying and adapting appropriate small-scale farmer

labour saving technologies for conservation farming. Linking farmers with commercial suppliers of

appropriate machinery and equipment for conservation

farming.28


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Sub result area 3 Increasing the area under efficient and sustainable irrigation

technology. The illustrative activities include:

Conducting a study to quantify the small- and large-scale irrigationinfrastructure to be rehabilitated, modernized and developed.

Surveying and redesigning of water and electricity distribution

system to serve the new farm land ownership. Rehabilitation of existing priority sources of water (dams, rivers

and boreholes) for irrigation.

Promoting the adoption of water harvesting/capturing/storagetechniques;

Mobilization of international concessional and private sectorfinance.

Promote appropriate water efficient irrigation systems (dripirrigation and inexpensive pumps).

Strengthen irrigation management skills. 29


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Sub result area 4 Increasing the area under sustainable forestry and

wildlife management. The illustrative activities are:

Strengthen law enforcement for forestry, fisheries and wildlife protection

Strengthen information dissemination on sustainable landand forest use.

Promote widespread adoption of conservation farming.

Strengthen farmer capacity to enforce environmental

laws/regulations. Promote tree farming

Promote aquaculture farming

Promote game ranching30


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Business model for intermediate

result area 1 A combination of public investment and private

investment;

The government has to invest in policy alignment and

institutional reforms to ensure that there is effectivemonitoring and enforcement of natural resourceconservation regulations, and that land managementpolicies make it possible for the private sector to invest;

Investment in policy alignment and institutionalreforms;

Development partner assistance not only indevelopment finance but technical backstopping;

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Intermediate result area 2

Increased participation of farmers in

domestic and export markets through

development of an efficient agricultural

marketing system and an enablingenvironment for competitive agricultural

production, investment (Domestic and FDI)

and Trade. Estimated budget: US$ 2,726,473,280 (58 %)

Three sub result areas as follows:

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Sub result area 1 Improving of key rural infrastructure (feeder roads, railway

lines, electricity supply, storage, and communication) in areaswith significant marketable surplus;

The illustrative activities to achieve sub result 1 include:

Conduct baseline study to identify and prioritize the key market

infrastructure to areas with consistent and marketable surplusproduction (feeder roads, rail lines and electricity).

Prepare a concept note on developing/improving the identifiedinfrastructure to assist in resource mobilization

Rehabilitate the priority feeder roads, rail lines, and electricity

supply lines to areas with significant surplus production. Promote development of agricultural market centers in areas with

significant production to reduce transaction costs.

Promote PPP in management and utilization of public storage

infrastructure (GMB) to minimize post harvest losses. 33


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Sub result area 2 Strengthening of the capacity of key institutions in agricultural

marketing and development of facilitating legislation in the area of

agricultural trade; Illustrative activities for sub result 2 include:

Strengthen capacity of farmer organizations to distribute marketinformation and provide extension services

Strengthen market intelligence systems (data collection, analysis and

dissemination) Review maize market and price restrictions and the future role and

management of strategic reserves

Strengthen agricultural commodity exchange

Promote warehouse receipt system to serve as collateral for farmers

Strengthen contract farming regulations and enforcement based onexperiences from tobacco and cotton models

Promote development of additional commodity and trade associations

Development/strengthening of rural livestock markets

Promote PPP in production and processing to increase parastatalcapacity utilization.

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S b lt 3


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Sub result area 3 Increased access to agricultural finance services and value of

agriculture credit and facilitate both domestic and foreign

investment in the agricultural sector with emphasis on FDI inareas with huge capital outlays.

Some illustrative activities to achieving sub result 3 are: Facilitate development and access to appropriate credit mobilizing

resource based value system and documentation (CMRBS).

Provide tax incentives for lending to the agricultural sector Promote rural savings as a way of mobilizing additional funding for

agricultural loans

Promote domestic lending to agriculture through targetedincentives, e.g. lower tax on profit from agricultural loans, RBZcapital requirement exemptions on agricultural loan portfolio, etc

Mobilization of international credit and donor support atconcessional interest rates to increase the pool of loan funds infinancial institutions

Promoting contract farming through tax exemptions andstrengthening the legal framework on contract farming 35


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result area 2 Public investment in infrastructure;

Private public partnerships and FDI in projectswith significant capital outlays;

Direct private sector finance to farmers Farmer payments to specific services to be

channeled towards development.

Investment in policy alignment and policyreforms

Development partner assistance not only indevelopment finance but technical backstopping;

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Ensuring food and nutrition security by

facilitating a cohesive multi-sectoral

agricultural response

Estimated budget: US$350,600,000 (7%)

Five sub result areas as follows:

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S b lt 1


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Sub result area 1 Policy instruments which protect and enhance food and nutrition

security particularly amongst the most vulnerable are formulated

and inform government and non government decision making Illustrative activities under this result area include:

Ensure that policies encourage local, national and regional markets to befully functional and accessible to all food producers, food traders and thefood industry.

Advocate and promote the implementation and scaling up of all foodand nutrition interventions which have proven effectiveness;

Promote and ensure that nutrition security is integrated and owned bymultiple sectors as reflected in their policies and strategies;

Promote the role of the private sector role to meet minimum needs forfood imports without negatively impacting on medium- to longer-term

capacities and incentives for local food production, the local foodindustry and local food-processing.

Develop policies that stimulate private sector investment in agriculture,trade and food-processing industries

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S b lt 2


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Sub result area 2 Ensuring that where social protection (including social assistance

programmes) is implemented, it must contribute and enhancenutrition and food security of the most vulnerable in the short and

medium term. Illustrative activities under this result area include:

Ensure that all social assistance programmes are aligned with therelevant social protection policy frameworks

Ensure that all social assistance (including safety net mechanisms

implemented in emergencies and crises situations) is timely and meetsuniversally accepted minimum standards

Food assistance This should be applied with caution so as not toundermine local capacity for production.

Agricultural inputs (crops and livestock) The provision of agriculturalinput packages (tools and implements, quality seeds, planting materialand/or animals, fertilizers, improved practices for cultivation, livestockrearing) must be designed to have an immediate impact on production.

Food/Cash for Assets must contribute to improved food security forvulnerable families

Cash Transfers39

Illustrative activities for sub result


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Illustrative activities for sub resultarea 2 (cont)

Supplementary feeding programmes for vulnerable groups

School feeding Vegetable gardens

Establish a national (small-scale) decentralized food reserve system thatallows communities to effectively and timeously access food duringperiods of acute food shortage.

Recognize individual and community-level coping strategies as capacitiesand means to cope with food and nutrition insecurity

Ensure that the design of social assistance programmes recognize thecentral role that women and girls play

Ensure that where social assistance programmes include food assistanceor food inputs, the procurement of locally produced food products isprioritized.

Ensure that social assistance programmes enforce community ownershipand that social assistance strategies aim at strengthening existing socialsupport structures

Recognize HIV and AIDS as a significant potential driver of vulnerability

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Sub result area 3 Ensuring the provision of safe and wholesome food to all. Consequently, all food

whether imported or locally produced, shall meet both national public healthlegislation and international standards for quality safety.

Illustrative activities under this sub result area include: Ensure the adoption of the farm-to-fork approach to promoting food safety and quality

at each level of the food supply chain is based on national and international standards.

Strengthen the enforcement and capacity of national food safety legislation at national,provincial, district and sub-district level.

Ensure that all food imports comply with relevant national food safety regulations,

including food for relief and in-kind donations and those used in social assistancemechanisms

Ensure that safe water is used in agricultural production, for human consumption and allin food premises.

Ensure that household hygiene, safe sanitation and waste management are prioritycomponents in addressing food and nutrition security.

Ensure that food safety and standards are an integral component of existing multi-

sectoral structures and/or that multi- sectoral structures Establish structures for public awareness and consumer education on food safety

measures

Ensure that all foods targeted at infants and young children are in full compliance withregulations on infant nutrition and breast milk substitutes

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Sub result area 5 Enhancing and strengthening national capacity in food and nutrition

security, primarily through supporting and reinforcing local community

capacity and responsibility for food and nutrition security, applied context-specific research and learning and multi-sectoral professional training infood and nutrition security.

Some of the illustrative activities under this sub objective are as follows: Ensure that the significant potential and capacity of communities in ensuring

food and nutrition security is recognized

Ensure that the social and cultural factors affecting food and nutrition securityare systematically recognized

Ensure that the capacity development and strengthening of national structures,co-ordination mechanisms and national staff capacity is an explicit componentof all food and nutrition security interventions at sub-district, district andprovincial level.

Ensure that the capacity of multi-sectoral food and nutrition co-ordinationstructures is enhanced by strengthening competencies and skills such asleadership, management, planning, facilitation, analysis and prioritization.

etc

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B i d l f i di


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result area 3 Public investments in policy analysis and advice;

Public and development partner financing of

institutions strengthening for enhancement of national

capacity for food and nutrition security; Public financing and development partner assistance in

strengthening and enhancing food safety and

standards, assessment and early warning systems; Public financing and Development partner(donors and

NGOs) assistance of public assistance programmes for

vulnerable groups44


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Improving agricultural research,technology dissemination andadoption.

Estimated budget: US$418,054,122(8%)

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Sub result area 1

Strengthening practical skills of all research andextension officers and capacitating of research andtraining institutions

Some of the illustrative activities are:

Strengthen the capacity of agricultural research andtraining institutes to carry out their mandates

Providing appropriate training materials, communicationequipment, transport and tools to extension officers

Strengthen farmer-extension-research linkage to improve

access to appropriate agricultural technologies to increaseproductivity

Strengthen coordination and quality control for extensionservices and research

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S f B d t


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Summary of BudgetIntermediate result area Estimated

budget(US$)

Percent(%)

Intermediate Result Area 1: Increasing production and productivity through

improved management and sustainable use of land, water, forestry and

wildlife resources;

1,056,940,000 22.53

Intermediate Result Area 2:Increased participation of farmers in domestic and

export markets through development of an efficient agricultural marketing

system and an enabling environment for competitive agricultural production,

investment (Domestic and FDI) and Trade;

2,726,473,280 58.13

Intermediate Result Area 3: Ensuring food and nutrition security by facilitating a

cohesive multi-sectoral agricultural response; and,

350,600,000 7.47

Intermediate Result Area 4:Improving Agricultural Research, Technology

Dissemination and Adoption.

418,054,122 8.91

Secretariat, Implementation, coordination, Monitoring and evaluation 138,272,590 2.95

Grand total 4,690,339,992

Intermediate result area Estimated

budget(US$)

Percent(

%)

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THANK YOU!

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