Zambia farmers face financial ruin.

Author:Chiposa, Sylvester
 
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The devastating drought of the 1991/92 farming season brought financial misery to many Zambian farmers. It depleted the savings most of them had accumulated over the years, and most of them were forced to borrow heavily from commercial banks and other agricultural lending institutions.

"They borrowed the money at 60% interest, already high at that time, and now they have to pay hack at as much as 324%," declared Willard Nang'amba, Assistant Director of the Zambia National Farmers' Union (ZNFU), which groups together the country's commercial and emergent farmers.

Good rains but cash drought

Good rains in the 1992/93 season have brought good yields to many peasant and commercial farmers, but financially, they have had no respite, owing largely to the debacle in this year' s crop marketing. Official estimates put the number of 90-kg bags of maize harvested in the 1992/93 season at 18m (1.62m tonnes), of which 11m hags was available for sale and 7m bags was retained by farmers for their own use.

By 15 November 1993, 9.2m hags had been collected from farmers, or 89% of the marketable surplus projected - but only about haft the bags collected had been paid for by government-appointed agents, millers and other private buyers.

At the government floor price of ZK5,000 ($7.61) per bag, more than ZK55bn was needed to purchase the 11m bags available for sale. But former Finance Minister Emmanuel Kasonde allocated only ZK15bn to the exercise in the 1993 budget. The World Bank came up with an additional ZK6bn, but a yawning gap of ZK34bn remains.

In arriving at ZK15bn, Kasonde and former Agriculture Minister Guy Scott, both of whom were sacked in April 1993, wanted to provide an initial kick-start to the marketing process which would have allowed it to build up the proposed food-security reserve of 2.5m hags.

With the liberalisation of crop marketIng, the government anticipated that a number of private operators would enter the marketing process, but with high interest rates and liquidity problems in the economy, only some millers and a few exporters who wanted to capitalise on the depreciating kwacha entered the fray. However, with the glut of maize on the world market and the appreciation of the kwacha, importing maize no longer appears to be an attractive gamble. The result has been that only 43,000t of maize and 4,750t of mealie meal had been exported by mid-October.

In its continuing effort to fight inflation, the government has refused to borrow...

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