By A CORRESPONDENT  –
SMALLHOLDER farmers and private sector companies within the soybean value chain have a lot to gain from local and regional soybean markets if the Government takes deliberate steps to ease access to inputs, equipment and raw material, says Soya Policy Action Group (SOPAG) Chairperson Yotam Mkandawire.
Deliberate efforts to craft enabling policies, with close collaboration between relevant line ministries will be key to drive this growth.
Soybeans is the world’s most important and tradeable oilseeds.
Because of its high nutritive value for both human consumption as well as its role in the livestock sector, demand for the crop is increasing, with the Zambian market alone requiring 230,000 metric tonnes MT.
A majority of soybean farming in the country is undertaken by large scale farmers, but several initiatives have been put in place to increase the participation of smallholder farmers in the value chain.
Some of the initiatives started bearing fruit in the sense that during the 2016/2017 farming season, the country saw an increase in the production of soybeans.
The crop is relatively simple to grow with minimal investment required, and when rotated with staple crops such as maize, it has shown to improve yields by 10 per cent to 20 per cent, an added benefit to the input-starved smallholder farmers.
These issues, alongside the geographic location of Zambia, should act as a big pull factor. However, the policy environment continues to affect growth of the sector and limits participation by smallholder farmers.
Two studies initiated by SOPAG and funded by the UK Government under the Food Trade East and Southern Africa programme painted a dire picture of the losses caused by restrictive policies, specifically trade bans and crop tax in agriculture implemented by local authority at district level.
The research found that Zambian farmers lost approximately US$1 million in revenue due to trade restrictions effected in the second and third quarter of 2016.
Farmers, millers, stockists, traders as well as end-of-line consumers were all affected, with the country facing the risk of losing its traditional export markets to competitors.
Because of the resulting a increase in production of soybean stocks in the local market, prices dropped significantly, compounding the financial woes of actors within the sector.
The double crop levy taxation in some soybean growing districts, where the same crop (first when being transported to the Boma by the farmers, and thereafter when being transported to the market after sale) is levied, is adding to the cost of doing business.
Eventually, all these costs trickle down, with farmers affected by depressed prices.
This research identified key constraints that need to be addressed in order to secure sustained growth of the sector, and enable smallholder farmers to participate more actively.
Firstly, the Government needs to develop transparent and predictable mechanisms for agriculture trade policies.
The Agriculture Marketing Bill, which was developed by the Ministry of Agriculture, seeks to address improvements in agricultural trade.
However, the Bill has been pending for 15 years and has likely been overtaken by events.
It is therefore, imperative to review and enact the Bill to promote smooth and efficient operations of agriculture markets relative to emerging opportunities.
This process needs to be inclusive and should involve the private sector as well as smallholder farmers.
Secondly, there is need to streamline crop taxes administered by local authorities as they are adding to other taxes implemented by the central Government.
The taxes add to the cost of doing business.
The central Government needs to estimate what local authorities will potentially lose when they stop collecting these taxes, and integrate that in the national Budget.
Thirdly, zero-rating tax on soybean processing equipment will improve the capacity of the private sector to produce soybean cake and edible oil, providing a market for smallholder farmers who are increasingly adopting the crop.
Exempting irrigation equipment will also enable farmers to improve their production capacity.
This will require close cooperation between the ministries of Agriculture, Finance and Commerce Trade and Industry, with decisions made based on evidence collected on potential impact.
In addition to this, opening up trade by utilising platforms such as the Zambia Agricultural Commodity Exchange (ZAMACE) will help spur industrial development in the country.
In addition to this, production at full scale will open up value-adding opportunities for key soybean growing countries like Zambia, Mozambique and Zimbabwe.
Such developments would be significant at the macro-economic level because agriculture-led development has been identified by African heads of government as key to strengthening food security and stimulating rural development.
While it has been argued that governments make certain decisions based on prevailing market conditions, it is SOPAG’s belief that cross-border trade, supported by regional governments, will facilitate the growth of effective regional soybean value chains.
We will continue to advocate for enabling policy changes in this sector, and are committed to working with the Government, the private sector and producer groups to advocate for a vibrant sector that benefits both the smallholder and the consumer.
The author is the SOPAG – Zambia Chairperson. SOPAG is a soybean value chain representative group of private sector actors facilitated by Food Trade ESA.
It is anchored to an existing policy and research institution, the Indaba Agricultural Policy Research Institute (IAPRI) for coordination. SOPAG is charged with driving advocacy for policy change, implementation, and partnerships to achieve a set of objectives.