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Trends in agricultural and rural development indicators in Zambia
FSRP Working Paper No. 24
June 2007
TS Jayne, J Govereh, P Chilonda, N Mason, A Chapoto and H Haantuba
Michigan State University

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Executive summary

Effective agricultural and food security policies in Africa need to be based on a solid empirical foundation. In Zambia, it is widely perceived that poverty rates are increasing, agricultural growth is stagnant, and real food prices are higher as food production declines. This study examines these trends and finds that all of these perceptions are wrong. Rural poverty rates have declined substantially in rural Zambia since the early 1990s, although they are still unacceptably high. Real staple food prices for consumers have declined by 20% over the past decade, thanks to major reductions in maize milling and retailing margins. And there is evidence of impressive production growth for some crops that are becoming increasingly important sources of income and food security for Zambian farmers, despite evidence of stagnant production for other key crops. This paper examines the relationship between trends in agricultural sector performance and rural poverty in Zambia, the likely factors driving these trends, and the future implications for agricultural policy and investment strategies.

After pursuing a state-led program of agricultural development for decades, Zambia undertook structural adjustment and agricultural market reforms in the early 1990s. Consumer food subsidies were eliminated, marketing board support to smallholder maize production was contracted, and massive fertilizer subsidies were scaled back. In the late 1980s, Zambia’s National Agricultural Marketing Board’s (NAMBOARD) operating losses were roughly 17% of total government budgets. These programs contributed to macroeconomic instability and forced the government to scale-back state subsidies to both small farmers and consumers in the early 1990s. There has been very little understanding to date as to how Zambia’s agricultural sector has fared since this time and how this performance has affected rural poverty.

Data and Methods: Analysis is drawn from crop production estimates of the Post Harvest Surveys (PHS), which are the official estimates of the Government of the Republic of Zambia (GRZ). The nationally representative PHS were initiated in the 1990/91 crop season and conducted thereafter annually by the Central Statistical Office (CSO). The PHS are based on a sample frame of about 8,000 small-scale (0.1 to 5 hectares) and medium-scale (5 to 20 hectares) farm households, 86% which are in the former category. For shorthand, we refer to the full sample of both categories as the “smallholder” sector.

Unfortunately, official data on agricultural production in Zambia’s smallholder farm sector during the 1970s and 1980s are considered highly unreliable. These figures, drawn from the CSO’s Crop Forecast Surveys, are based on a set of crops that do not match well with smallholder production patterns in the 1990s and 2000s. Because of important shifts over time in cropping patterns, the lack of coverage of certain crops in earlier periods that are known to be important now, the method of relying on local extension workers to derive educated guesses about crop area and production in their districts, and the inclusion of large-scale production in earlier Crop Forecast (CF) estimates, it would be highly misleading to examine trends in the total value of agricultural output from the 1970s to the present time based on the Crop Forecast Survey estimates, although many analyses continue to do so. As a result, such studies’ conclusions are prone to be biased and invalid. Even the more recent PHS excludes crops that have risen dramatically in recent years, such as fresh fruits, vegetables, and animal products. Evidence compiled in related nationally-representative surveys using the same sample frame as the PHS find, for example, that in 2002/03, the value of horticultural and animal product sales were each almost as high as the value of maize sales by the smallholder sector (Zulu, Jayne, and Beaver 2006). It is important to keep these data limitations in mind when trying to understand performance in the sector, particularly prior to 1990. It is likely that official production estimates increasingly underestimate true production to the extent that smallholders’ agricultural activities are increasingly dissimilar to the crops covered in the official estimates.

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