Fostering agricultural market development in Zambia

Type Working Paper
Title Fostering agricultural market development in Zambia
Publication (Day/Month/Year) 2009
This paper seeks to (1) assess some of the key features of the Zambian agricultural market that have led to the underdevelopment of the staple food marketing system; (2) review existing empirical evidence in order to explain the dismal performance of the maize subsector; and (3) to suggest possible corrective measures. As smallholder farmers in agricultural markets are considered to be vitally important to the attainment of food security, special attention is placed on how the current system impacts these farmers, and on how to foster improved participation. The role and potential of new generation cooperatives is also considered. We identify seven major areas in need of serious and coordinated attention if the state of the agricultural sector and marketing functions is to improve: i) Serious efforts to encourage market development and to ameliorate market failure are likely to require an increased commitment to investment in public goods and institutional change in order to promote the functioning of market-oriented trading systems. ii) Policy discussions and subsequent decisions need to account for the fact that actual budgetary allocations often differ in significant ways from planned disbursements. iii) In the mixed policy environment, the government co-exists with the private sector as an unfairly large competitor, and this hinders the development of the agricultural sector. iv) There is evidence that restricting trade by using discretionary policies such as export bans, import tariffs, and grain levies tends to hurt the market’s ability to deliver food security for all. v) Farmer organizations are generally recognized as valuable instruments for attaining smallholder agricultural development. vi) Farmer organizations also have potential to make marketing cheaper. vii) In discussing agricultural marketing policy and how it might impact the sector, it is also important to understand the participants and their abilities to respond.

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