By KENNEDY MUPESENI –

THE Indaba Agricultural Policy Research Institute (IAPRI) has called on Government to revise legislation on Vitamin-A sugar fortification to market options for sugar investment.
The latest research findings by the institute said the policy on Vitamin-A fortification supported high domestic sugar prices which was significant in shaping economic outcomes in the sugar market.
The report said there was need to re-evaluate whether sugar fortification was still a good strategy for enhancing vitamin-A access to the Zambian population especially in rural areas.
“The market structure in Zambia’s sugar industry is highly concentrated, leading to consumers paying higher prices than expected given the low cost of sugar production in the country,” the report said.
The Institute said legislation on Vitamin-A fortification for sugar acted as a non-tariff barrier in the sugar sector, thereby limiting competition.
“Vitamin-A fortification requirements coincided with a sharp rise in consumer sugar prices. This rise is not tied to changes in world prices and is substantially higher than the cost of fortification to sugar processors,” it said.
Sugarcane producers participating in out-grower arrangements were positioned to benefit from the current market structure, as farm prices were based on the division of proceeds, which was tied to the ex-factory processors’ price.
Notably, the report said Vitamin-A fortification requirement for all directly consumed sugar, and administrative barriers had all played important roles in the observed outcomes in the sugar industry.
In Zambia, sugar marketed for domestic household use was required by law to be Vitamin-A fortified, while exported sugar was not.
According to a previous World Bank report, a number of value chains in Zambia involving smallholder growers of sugar, under contract arrangements, were found to be the most profitable enterprise.
Thus, growth in the sugar industry provided a mechanism for farmers to be included in profitable value chains.