Focus on agricultural research, Zim urged
ZIMBABWE will have to redirect public spending in agriculture from inputs and equipment, to agricultural research and strengthening of security of tenure if it is to improve agricultural productivity, a joint report by Government and the World Bank has recommended.
The Public Expenditure Review Report (PER) with a Focus on Agriculture released last week, noted the current model, where funding was through programmes such as Command Agriculture, had not helped improve productivity in recent years.
Public spending accounted for twothirds of agricultural GDP and nearly a quarter of the budget in 2017, one of the highest levels by global standards.
However, the report notes that despite the increase in spending, productivity has not improved in recent years, owing to a myriad of issues such as weakened security of tenure that undermined access to credit, dilapidated infrastructure and increased vulnerability to drought.
“Additionally, the external environment continues to deteriorate, and there is a reluctance by the private sector to finance agriculture, leaving no buffers to increase production and guarantee food security,” reads part of the Report.
World Bank senior economist for Zimbabwe Stella Ilieva, attributed Zimbabwe’s macroeconomic challenges to losses in “agricultural productivity”.
She said there is a need to reverse the decline within a broader framework of macroeconomic reforms and private sector development.
For sustainable government spending in agriculture, the report says aligning priorities with fundamental drivers of productivity is key.
It recommended redirecting public spending from inputs and equipment, to agricultural research, extension and animal disease control, strengthening security of tenure and fostering skills and resilience.
Without action, the report warns that exogenous changes such as climate change and climate-related shocks will leave the sector in a fast decline.
The Climate-Smart Agriculture Investment Plan (CSAIP), which recently launched alongside the PER, reveals that with the changing climate, maize—a staple food crop in Zimbabwe—is expected to see a 33 percent yield reduction by 2030. Livestock would also be affected by changing temperatures. “Thus, without action to increase resilience, climate change will likely leave Zimbabwe’s agriculture sector in fast decline.”
As a result, the investment plan recommends that the Zimbabwe government climate-proof its agriculture sector and invest in climate–smart agriculture practices similar to the Pvumvudza conservation agriculture it spearheads.
In addition to Pfumvudza, Government has also increased funding towards dam construction and irrigation facilities. Estimated funding for dam infrastructure in the 2021 National Budget is $10,7 billion.
In addition to Government initiated dam construction, through the private sector, project development activities are progressing for dam projects being implemented under the Public Private Partnership arrangement such as Muda-Nyatsime, Runde Tende, Glassblock, Kondo-Chotowe, being coordinated through the Zimbabwe Investment and Development Agency.
Zimbabwe is targeting a US$8,2 billion agriculture economy by 2025 and President Mnangagwa is on record saying there is a need to modernise the sector “because we need to proof ourselves against climate change and to do so we must have water bodies where we do irrigation”.
“Climate-Smart Agriculture practices can help improve agricultural productivity in a way that is both resilient to future uncertainties,” said Dr Easther Chigumira, a World Bank senior agriculture specialist.
“Crop-switching to drought and heat tolerant crop varieties are estimated to increase yields by 3-12 percent across all crops.
Although investment in irrigation has high start-up costs, it provides estimated yield increases of between 50 and 140 percent. The country currently does not meet its full irrigation potential” Dr Chigumira said.
The report also suggested investments in rural public goods that strengthen markets, expand water access, and develop and adopt improved technologies as these have an “enormous impact on growth and productivity”.
Also favoured by the authors of the report is agricultural research and development, which is said to have high returns, averaging 43 percent in developing countries and 34 percent in Sub-Saharan Africa.
Long-term growth in agriculture requires investment in essential public goods. Expenditures on essential public services such as agricultural research, extension and animal disease control, as well as on construction and maintenance of essential infrastructure, benefited from modest growth in spending, but remain inadequate compared to needs, reads part of the Report.
“There is an urgent need to reduce expenditures on untargeted subsidies and shift funds to essential support for public services and on infrastructure.”
There is also recommendations that the financial sector (such as banks, micro-credit companies, and leasing companies) should eventually take over the role of private agriculture finance.
Credit could also come from input suppliers, processors or traders through some form of contract farming, or through local savings clubs and associations.
In the medium to long term, the Report notes that Zimbabwe should aspire to a well-functioning commercial agriculture sector that should be able to finance most of its working capital and capital expenditure needs through lines of credit with banks. - www.ebusinessweekly.co.zw