Agriculture

A Fertile Plan

Agriculture

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A Fertile Plan

Mozambique has only cultivated 10% of its total arable land, whereby many now see the potential of finding a solution to food security issues in southern Africa. The country's geographical location makes it ideal as an agricultural hub for the region and beyond.

The agriculture sector in Mozambique is hugely important, both in its current capacity and the potential it holds. Around 80% of the workforce is employed in the agriculture sector, making it vital to many peoples’ lives in more ways than one. While being a prominent employer, the sector also plays a considerable role in GDP, as, according to the statistics, it contributes 23.5% in 3Q2014, making it one of the largest industries in the country according to the National Institute of Statistics. Between 2Q2014 and 3Q2014, agriculture and fisheries showed impressive growth of 7% and 6.3%, respectively. As the government and the private sector begin to take full advantage of what the sector has to offer, growth is almost certain to continue. However, one of the main problems that the sector is experiencing is access to the market. This is somewhat hampering the creation of larger farm holdings and perhaps explains why there are 3.8 million farms in the country, with 3.2 million subsistence farms averaging at 1.2ha in size producing 97% of agricultural output. This large number of small farms can be attributed, in part, to a current lack of large-scale transport infrastructure, whereby a farm must be close to the market simply to access it. Only 20% of smallholders sell their goods in the market, and only 34% of those receive price information about the crops they are selling. Still, there are 36 million ha of arable land in Mozambique, of which only 10% is currently being used for commercial purposes, and of which only 3% is irrigated. In order to further unlock the potential of the sector, the government launched the National Irrigation Strategy in 2011, which will run until 2019. The project has a budget of $645 million and aims to double the usage of irrigation in the provinces of Sofala, Manica, and Zambézia from 66,000ha to 113,000ha by 2019.

WE GOT PLANS

With the discovery of large fields of natural gas, the expectations of growth are high for Mozambique’s economy. The government is hoping to avoid Dutch Disease and develop, in tandem, a number of sectors, with the agriculture sector being one. Therefore, in 2014 the Ministry of Agriculture launched the National Agriculture Investment Plan 2014-2018 to identify key areas in the sector to develop and invest in. With the country being one of the poorest in the world, in per capita terms the new strategy hopes to solidify the country’s food security and help make itself sufficient in staple crops, while also developing and encouraging the production of cash crops, such as tobacco, for added value. According to the WHO, chronic malnutrition still poses a serious risk to the development of human capital, with 50% of under-fives suffering from malnutrition, not allowing them to achieve full physical, mental, or cognitive development. There are regional disparities in the country, with the north suffering the most with rates decreasing the further south you go.

National statistics show that Mozambique currently has a food insecurity rate of 35%; something the government looks to address. Under the umbrella of the National Agriculture Investment Plan 2014-2018, the government has launched a number of strategies to tackle a whole host of issues currently facing the agriculture sector, with the Agricultural Policy and Implementation Strategy (PAEI), the Strategic Plan for the Development of the Agricultural Sector 2011-15 (PEDSA), the Fishery Policy and Implementation Strategy (PPEI), the Fishery Master Plan 2010-2019 (PDP), the Development Plan for Small Scale Aquaculture 2009-2013 (PDAPQ), the Rural Development Strategy (EDR), the Food and Nutritional Security Strategy II (ESAN II, 2008-15), the Multi-sectoral Action Plan for the Reduction of Chronic Malnutrition in Mozambique (PAMRDC) 2011-20, the National Programme for the Strengthening of Commodities 2011-16, and the Green Revolution Strategy (ERV) some of the most significant.

The underlying theme behind each of these strategies is to improve food security and reduce poverty levels across the country, which in turn will allow the country’s human capital to fully develop. Many of these strategies also hope to improve the technologies that smallholdings use, such as better seeds, chemical fertilizers, pesticides, and motorized or animal traction. Currently, the use of all these elements is below regional averages with only 5% of smallholders using chemical fertilizers or pesticides and less than 10% using improved maize seed or animal traction. Despite the challenges that the country faces, Mozambique holds considerable potential, with more than 36 million hectares of arable land, which is 2.8 times more than Ghana and 1.9 times more than Tanzania. By using improved technologies and farming methods, it is estimated that farmers could on average more than triple their farming output. The potential for Mozambique to change the balance of food security in southern Africa is huge. The country is already the second largest formal exporter of food, and it is well within the country’s grasp to move toward a food surplus if agricultural and regulatory practices are improved. Mozambique’s location on the Indian Ocean as well as its land borders with Tanzania, South Africa, Zambia, Malawi, and Zimbabwe, mean that its export potential is huge. This is something that international companies are beginning to notice, with Olam setting up the first cashew-processing factory in Africa in the city of Nampula. Chiquita, a US-based banana company, recently partnered with local company Matanuska in a $50 million joint venture to export bananas, another example of how international investors are gaining confidence in what Mozambique could potentially yield.

BEIRA

One of the main developments that holds much potential is the Beira Agricultural Growth Corridor (BAGC) Initiative. The BAGC covers 227,000 sqkm, of which 10 million ha is arable land; however, only 1.5 million hectares are currently cultivated. The Corridor provides a gateway and solid link to South Eastern Africa and a link to potential export partners Zambia, Malawi, and Zimbabwe. The significant volume of mining investments also greatly improve access to energy, water, and transport infrastructure—something that is often lacking in other areas of the country. The Sena Railway Line and the Beira Port will greatly improve the agriculture sector’s access to both domestic and foreign markets. An Investment Blueprint set out key areas in which it hoped investors would participate. One of the main tasks it had set was to deliver 16,000 ha of irrigated farmland. One of the largest investments would be in the Munda Munda Rice Irrigation Scheme. Costing an estimated $27 million, the scheme would provide 3,000 ha of irrigated land for smallholder rice production, as well as storage, milling, and a marketing company. The construction of the system would create direct 1,500 jobs and a further 3,000 indirect jobs. Under the plan, a further $2.7 million investment would be required for further extensions and a comprehensive marketing program. The largest planned investment is for the Envalor Sugar Estate. Located 70km south of Enchope, the large sugar estate will offer 25,000 ha for sugarcane, sweet sorghum, and dry beans. These will then be processed into 150 million liters of fuel-grade ethanol and 32mW of electricity. The estate will create 1,800 jobs and produce 10,000 tons of beans. The project overall is expected to cost somewhere in the region of $350 million. Another sugar estate planned for the region, but on a smaller scale, is the Sugarcane Outgrower Scheme planned for the Upper Zambeze. On 3,000 ha of land, it will house 200 families and provide 2,000 full time jobs. The total amount of land will be split into 600-700 ha farms for food production. The estate will produce 110 million tons of fuel-grade ethanol, 15,000 tons of vegetables, 200 tons of meat, and 2-3MW of electricity. The scheme is expected to cost around $20 million.

The government and the private sector understand the great potential germinating within the agricultural sector. And with the new flow of investment entering the mining and oil and gas sector, it is hoping to create a more solid basis for addressing food security concerns.

PULP FACT

Mozambique’s forestry sector stands to increase its current contribution to agricultural GDP from 9.1%—National Statistics Institute data based on the agricultural census (2009) reveals that 78% of agricultural GDP derives from crop production. FAO data shows that forests cover 40.6 million ha, or 51% of the country. Yet earlier attempts to privatize state-owned forestry had proven fruitless. The second phase of forestry development was initiated in 2000, especially in the Niassa Province, but also in Zambézia and Nampula, and the 2009 government Reforestation Strategy encompassed the forestry industry. One million trees may be planted over the next 20 years, creating 250,000 jobs, based on a ratio of one job per 4 ha planted. Mozambique’s forestry-related goals for 2030 are to reach a critical mass of at least 1 million ha of forest plantations, create at least 250,000 permanent jobs, and secure private investment enabling minimum annual income of $1.5 billion over the next 20 years. According to FAOSTAT, in 2014 Mozambique was joint 80th in the world in household and sanitary paper production, exporting just five tons in 2010, and importing 737 tons in 2013. SINTIQUIAF data for 2013 identifies 18 local paper industry companies employing around 700 people (13% women).

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