Dr Gift Mugano
Given the apparently unsatisfactory performance of the centralised planning system, at the end of the 1980s, Mozambican government opted for the liberalisation of the market, with the support of the World Bank and the International Monetary Fund.
A few years later, after the signing of the General Peace Agreement in 1992, there was a massive return of displaced individuals to their regions of origin, in most cases, rural ones. As a result, there was a relaunching of and growth in agricultural production, leading to the emerging perception within the government and non-governmental organisations (NGOs) of a need for integrated action, principally with regard to marketing of agricultural products.
The first post-conflict programmes essentially focused on subsistence agriculture, assuming that the target group consisted of a homogeneous group of rural producers.
This resulted in the conception of activities in a linear fashion, which excluded some significant actors within agriculture, such as emerging commercial farmers and the private commercial sector.
On the other hand, the absence from these programmes of an infrastructure component led to the payment of low prices to farmers which resulted in reduced areas under cultivation and low productivity. In this way, a period of stagnation of production and productivity began, which has extended to the turn of the millennium.
In order to revert the stagnation, in 2003, the agricultural sector initiated discussions which led to the approval of various plans, such as the Agricultural Intensification and Diversification Programme.
At the same time, these programmes did not deepen the inter-sector coordination necessary for dealing fully with the production chain, an aspect which resulted in the lack of harmonisation and alignment of efforts of the various parties intervening in the chain.
As a consequence, the programmes did not have the desired effect in terms of increasing the planted area and production.
Subsequent to this, the National Green Revolution Strategy (NGRS) was designed in 2005 and strengthened in 2006 under the motto “Increase cereal supply and reduce imports”. Among the initiatives to be included in a Green Revolution programme were the following:
Creating an environment favourable to investments in the agricultural sector;
Promoting and expanding formal and informal systems of rural credit, which make agricultural products viable;
Supporting private funding initiatives for the agricultural sector, encouraging the banking sector to develop a greater presence in rural zones;
Establishing efficient macro-economic policies (monetary, fiscal, tax, currency and credit), which promote the agricultural sector;
Promoting initiatives for guarantee funds, credit lines, credit funds, risk capital and agricultural insurance, as well as making these operational, on a more commercial basis and less as the extension of the government and donors;
Increasing the collaboration of programmes with existing funding programmes, seeking synergies and common objectives;
Expansion of the global resource base for the financing of agricultural activity, with the involvement of cooperation partners.
A few years later, in 2008, without disregarding the NGRS, the international increase in the prices of agricultural commodities led the government to approve the Action Plan for Food Production (PAPA), which focused on a significant reduction in the cereals deficit over a three-year horizon.
Despite the fact that NGRS and PAPA were guided by a more holistic philosophy, in many cases, there was excessive intervention by the State, both in the attribution of credit and in the provision of inputs, to the detriment of the performance of these activities by the private sector and by financial institutions.
In order to improve policy interventions in the agricultural sector, the government of Mozambique in April 2011 approved the Strategic Plan for the Development of the Agricultural Sector (PEDSA), which oriented the actions of the agricultural sector during the period 2011-2020.
This plan serves as a long-term guideline for agriculture in Mozambique, in coordination with the Comprehensive Africa Agricultural Development Programme (Global Programme for the Development of African Agriculture), which is the agricultural development programme representing the initiative of various East African countries.
It is intended that PEDSA will achieve growth in agricultural output averaging at least 7 percent per year.
The sources of growth will be productivity (tonnes/hectare) combined with an increase in the area under cultivation, seeking to boost yields in priority crops, with a 25 percent increase in the cultivated area for basic food products by 2020, so as to guarantee the sustainability of natural resources.
Recognising that producers are constrained by access to seeds, fertilisers, animal and protection products, the PEDSA proposes to expand the program for developing a network of input suppliers (agreed by the head of African State in Abuja in 2006).
This program has the potential to create rural entrepreneurship along the agribusiness chain. According to the PEDSA, there is the need to develop a new approach on two fronts:
Directed government support for producers through traders of agricultural products in order to remove the producer from the poverty trap; and
Commercial credit to producers, traders and processors of agricultural products with a view to expanding scale and competitiveness.
From a reading of the different agricultural plans and programmes drawn up in Mozambique, it becomes evident that the effective implementation of a programme for increasing agricultural productivity considers a number of important aspects, namely:
The Programme included initiatives in the field of production, such as access to credit, eg with initiatives in the area of marketing (storage), logistics for transporting production (roads) and logistics of input supply.
The Programme is decentralised, giving a prominent role to the financial and private marketing sector and leaving the State principally with the attributions of a guarantor of risk and provider of liquidity for the system.
The Programme concentrates on the sectors of agriculture with the greatest response capacity in terms of productivity (emerging producers).
Mozambique also noted that technology may contain elements both for and against family agriculture (in the case of emerging farmers).
Effectively, technologies related to biotechnology, such as transfer of embryos, more intensive forms of monitoring of phytosanitary control, the creation of new forms of exploitation for pre-existing natural resources (domestication of high value-added plants for the cosmetics and pharmaceuticals industries) represent examples of innovations which create technological opportunities and make room for family agriculture.
In order for this to occur, the government promoted technological innovations with the introduction of incentives such as credits.
At the same time, the process of encouraging innovation and adding value to family production units also took a number of important elements into consideration.
The first of these relates to the need for scale in generating a technology, i.e. the feasibility of a technological undertaking (production, marketing, adoption and diffusion) requires the existence of an adopting market which is sufficiently large for the requirements of scale (which are highly variable, in terms of agricultural technologies).
The second point, which is a consequence of the first, relates to the need for interaction between technology supply and demand, on a different plane from the familiar model of “let us gauge the demand’. While all applied research has to “listen to the demand”.
In this drive, the government looks for a compromise between the party, imposes the demand (producers), those parties doing research (researchers and their institutions), producers (the entrepreneur), marketers (the trader) and in certain circumstances, the party providing assistance services.
The third element is the creation of forums or institutional networks for organising and disseminating innovations in the research system.
The importance of this element lies in the fact that there is a weak connection between research and financial circuits (ie connecting to existing circuits or innovating and creating new circuits), and its integration into local systems of science, technology and innovation.
As in many poor countries, in Mozambique, investment in research and expansion would permit an increase in productivity and profitability for a significant portion of family farmers, the so-called “emergent” farmers.
In this way, because of its context, Mozambique favoured labour-intensive production technologies so as to promote the indirect effects of increases in productivity on poor farmers although in some way this has a dent on competitiveness.
Mozambique recognised the role of rural infrastructure and infrastructure for access to markets infrastructure for transport, storage and access to markets, in addition to access to water, represents an important challenge for the development of agriculture.
The government is working to reverse the current state of affairs which shows that there are deficiencies of roads which is detrimental to the capacity of rural families to access the goods and services necessary for improving production and market access for the outflow of their products, significantly increasing transaction costs.
Of particular, the centre and North of Mozambique, traders limit themselves to operating on the principal roads, due to problems of accessing the interior.
The distance to a market averages 15km and over 20km in the provinces of the North. Within this context, it should be indicated that within Mozambique there is no transport sector dedicated to agricultural commodities. Major traders have their own vehicles, while small, informal traders use precarious means of transport (vans) with waiting times varying from 1-2 days to 2 weeks. Although this is work in progress, it is important to note that government in collaboration with donors are working to address this challenge.
Lessons which we can draw from Mozambique are diverse:
Policy consistency — various policies which were adopted were meant to build on the previous ones in a complimentary way;
Addressing agricultural productivity is not an event but a process which Mozambique continues to foster with a vision 2020;
Mozambique main-streamed all stakeholders in agriculture with both clear role and business case for participating;
The development of agricultural policies was rigour with clear knowledge of the objective and how to reach there.
- Dr Mugano is an Economic Advisor, Author and Expert in Trade and Competitiveness. He is a Research Associate of Nelson Mandela Metropolitan University & Visiting Lecturer at the University of Zimbabwe’s Graduate School of Management. Feedback: +263 772 541 209 or [email protected]