Speech of EU Ambassador to the Signing Ceremony of the Support to the Sustainable Commercialisation of Zambia's Smallholder Farmers Programme
Signing Ceremony of the Support to the Sustainable Commercialisation of Zambia's Smallholder Farmers Programme
Opening remarks by H.E. Alessandro Mariani
Ambassador of the European Union to Zambia and COMESA
Chisamaba Agritech EXPO – 13 April 2018
Secretary to the Treasury
Hon. Ministers
Colleagues Ambassadors of European Union Member States in Zambia
Members of the Diplomatic Corps
Senior Government Officials
Representatives from European and Zambian private sector
Zambian Farmers
Representatives from the media
Ladies and Gentlemen,
Dear Friends,
I am very pleased and honoured to be here today at the Agritech Expo 2018 to sign the Financing Agreement for the Support to the Sustainable Commercialisation of Zambia's Smallholder Farmers Programme. This Financing Agreement commits a new grant of 87 million EURO, which is slightly more than 1 billion Kwacha.
Let me first of all express my gratitude to the Secretary to the Treasury, representing here the Government of Zambia, for his continuous leadership – including as National Authorising Officer for the European Development Fund – that made it possible to be where we are today. I would also like to express my gratitude to the European Union Member States – so well represented here in Chisamba – and to all the other international partners who have been involved in the formulation of this very important development programme. I think that our presence here today demonstrates our long-term commitment to support the development of the agricultural sector in Zambia.
We are all aware that agriculture is one of the main economic sectors in the country and the primary source of income and food for the rural population.
Zambia is endowed with ample land and water resources, fertile soils and a favourable climate, yet the performance of Zambia’s agricultural sector still falls short of its "potential".
The sector employs more than 50% of Zambia's labour force, however, it accounts for only about 9% of total Gross Domestic Product (GDP).Poverty level among rural population (who make up 2/3 of the country's population) remains at around 70% and 4 out of 10 children under the age of 5 are stunted. The gap between urban and rural poverty continues to widen, while production and productivity are only slowly improving and are still well below, competitive, worldwide, levels. This is due to a number of constraints that hamper improvements in the productive and commercialisation capacities of the country's farming community
The Government of Zambia has taken measures to make the sector more effective and efficient, including encouraging a diversification of crop production and a higher level of involvement of the private sector. I would like to mention the reform of the Farmers Input Support Programme (FISP) through the introduction of the e-voucher system, which has to be further refined and improved in terms of implementation commencing from the next season, the procurement of maize by the Food Reserve Agency limited to the national strategic food reserve of 500,000 metric tonnes and the establishment of the Zambian Commodity Exchange and the associated warehouse receipt systems. More remains to be done in order to offer to the private sector a well conducive environment to do business in agriculture. Agriculture is business and what the private sector expects is a very predictable business environment, where anticipated measures are discussed with private sector representatives via the various organisations that federate farmers and the farmers' community.
Secretary to the Treasury, ladies and gentlemen,
The European Union is a long standing partner to Zambia in the agriculture sector. Under the current 11th European Development Fund, at the request of the Government of Zambia, the European Union further increased its support to the sector with an overall allocation of 110 million EURO (approx.1.2 billion Kwacha) of grant finance for the period 2014-2020. The 87 million EURO Programme that we are signing today represents almost 80% of this allocation for agriculture.
We see this as our main contribution to promote sustained and inclusive agriculture growth, agriculture diversification and job creation in line with the Seventh National Development Plan and its aspiration to “accelerate development efforts towards the Vision 2030, without leaving anyone behind”. In recognition of the fundamental role that the very many small holder farmers play in the development of agriculture, this programme will go well beyond securing subsistence of the rural poor. It will contribute to make farmers successful agriculture entrepreneurs and to make agriculture a profitable business. I want to come back and repeat the concept that Agriculture is business.
In line with the Zambia's Second National Agricultural Policy (2016-2020), this programme is intended to help business-oriented farmers to graduate from low productive, semi-commercial agriculture towards more diversified and market-oriented farming while increasing their income and improving their food and nutrition security.
The programme will promote the development of agriculture value chains where Zambia can have a comparative advantage and market opportunities. The European Union will facilitate access to finance, services and inputs to promote new investments in the agriculture sector. These investments will be co-financed also by European Finance Institutions such as the European Investment Bank – the EU Bank – and the French Development Agency that will mobilise additional resources in the form of loans through dedicated credit lines to some commercial banks in the country for on-lending operations to the private sector. Access to more affordable finance may be combined with partial de-risking through guarantees and technical assistance for both farmers and local finance institutions. We expect to leverage five times the initial grant investment in terms of loans.
The above is a very innovative, flexible, approach which we expect to be particularly appreciated by the private sector. This is one of the very first operations of this nature in the African continent and we have decided to do it in Zambia because we consider that the private sector in Zambia is dynamic and ready for it.
The European Union will also build upon its long-standing commitment to conservation agriculture by supporting sustainable cropping and land management techniques. We will continue working in partnership with the Food Agriculture Organisation and the Ministry of Agriculture to ensure that not only conservation agriculture is more widely adopted in Zambia, but also to make it more productive and adapted to the climate conditions in the country.
Adoption of sustainable agriculture also entails sustainable management of natural resources, to keep Zambian's lands fertile and productive also for future generations. For this reason, we will support the development of durable smallholder irrigation systems and reinforce the government and rural communities' capacities to better manage their water resources. We will benefit from the expertise of GIZ and the German cooperation that have successfully implemented similar projects in other countries.
Last but not least, as today's healthy children are tomorrow's successful farmers, entrepreneurs and citizens, and given the very high rates of under-nutrition that still persist in Zambia (in particular among children and women of reproductive age), this Programme will support Zambia's efforts to curb malnutrition prevalence. The European Union, together with other European and non-European Cooperating Partners (including DFID and USAID), will contribute to the Scaling Up Nutrition Fund in support of the implementation of the First 1,000 Most Critical Days Programme.
Secretary to the Treasury, ladies and gentlemen
There is wide consensus on the key role that agriculture can play to foster a more inclusive economic growth, job creation and development of the country. Private sector investments through effective partnerships between agri-businesses, key public and private actors and farmers' organisations are essential for unlocking this potential.
The contribution from the European Union to the development of the agriculture sector in Zambia is not limited to the development cooperation dimension. Indeed, there is growing interest from companies in EU Member States such as agro-industries and suppliers that are willing to invest in the country and contribute to boosting agricultural development and diversification. Innovation and the best technological solutions from European Union companies can make a difference, especially in an environment which is conducive to further investments and to inclusive economic growth. Their presence at this Agritech Expo is a proof of their interest and commitment. Our decision to sign the agreement today at the Agritech is to showcase the European Union's offer, combining our development cooperation with the excellent work and technological offer of European companies which is top of the art.
Secretary to the Treasury, ladies and gentlemen,
Agriculture is a fundamental source of national prosperity. Today is an important day because we are about to sign an ambitious and innovative programme that will contribute to increasing smallholder farmers' productivity, income and employment opportunities. The European Union will continue to work hand-in-hand with all the stakeholders so well represented here today to make this programme a success for the benefit of the people of Zambia.
I thank you for your attention; Zikomo Kwambiri