Rural Income Generation and Diversification - A Case Study ... - Doria

imports for subsidised distribution declined from over 100,000 metric tonnes (mt) in the
early 1990s to 40,000 mts at the end of the decade (Govereh et al. 2002), although in
1999/2000 about 35 per cent of the fertiliser received by smallholder farmers still came
under the government loan programme. The repayment rate was as low as 38 per cent (ibid.),
the losses being covered from the state budget.
Fertiliser use fluctuated significantly during the 1990s. It peaked at 164,927 mt in 1993/94,
and the following growing season witnessed figures as low as 64,525 mt (MAFF 2001a).
During the 1999/2000 season only 20 per cent of smallholders used fertiliser (Govereh et al.
2002). The government distribution programmes presented the smallholders with the
dilemma of whether to pay the full price in cash to a private trader or to take a risk and wait
for the arrival of government-subsidised fertiliser. This often led to late planting and
fertiliser application as well as to insecurity among the private operators (ibid.).
Following the drought that occurred during the 2001/02 growing season the government
introduced a price-subsidy system aiming at increasing the use of fertiliser. The cost of the
50 per cent price subsidy was covered from the state budget. The system has been in place
ever since, although many problems were encountered during its implementation: coverage
was limited, farmers received their fertiliser late, and mismanagement was reported. 7
During the 2002/03 season the government was thus fully involved in fertiliser marketing,
distribution and price subsidising, and in 2006 maize price support and fertiliser subsidies
took almost 80 per cent of the agricultural budget allocated to poverty-reduction programmes
(Govereh et al. 2006). Fertilisers and seeds were also distributed free of charge to the most
vulnerable households by non-governmental organisations such as the Programme Against
Malnutrition 8 .
The government fertiliser-subsidy programme operated through re-established cooperatives.
To access the subsidised fertiliser, farmers were expected to join the cooperatives, which
quickly became politicised and the distribution system non-transparent. This left many
farmers with access difficulties. 9
Before the reforms the seed sector was monopolised by Zamseed, which was privatised in
the late 1990s (Wichern et al. 1999). As a consequence, smallholders started facing problems
with the availability of good-quality seed, especially in remote areas where the demand was
not high enough to attract private suppliers. The use of hybrid maize varieties declined
compared to traditional and open-pollinated varieties because of the seed-availability
problem, as well as the higher fertiliser requirement. MAFF (2001a) reported a decline in the
use of certified maize seed from 5,101 mt in 1996 to 3,805 mt in 1999. For cash crops such
7
Interviews conducted in Eastern Province and Lusaka, 2003.
8
Interviews conducted in Lusaka, 2003.
9
Interviews (agricultural extension staff) conducted in Eastern Province, 2003.
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