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August 31, 2008

Support for infrastructure may be more important than subsidies: study

Zambia's Ministry of Agriculture and Cooperatives has found that there is need to direct resources at improving infrastructure rather than subsidy schemes for the country's agriculture to be efficient.

This is according to a policy synthesis funded by the United States Agency for International Development and the Swedish International Development Agency. The report was published last month by the Food Security Research Project under the Ministry of Agriculture and Cooperatives, in collaboration with Agriculture Consultative Forum, Zambian stakeholders and Michigan State University of the USA.

The report says although 70 per cent of the Ministry of Agriculture and Cooperatives budget went into fertiliser subsidies, maize marketing and stockholding programmes, only 20 per cent of small-scale farmers in Zambia used fertiliser. It says improvement of infrastructure like roads, electricity and programmes like extension services and education were important if Zambia was to make agriculture more efficient.

It also supports the notion that market access was a key determinant of smallholder’s income diversification and growth, adding that for peripheral regions, improvements in market access required investment in infrastructure.

"The introduction of a complex set of subsidy programmes via local governments and cooperatives does not seem to be the most efficient route to develop agriculture,” the report says. The brief notes that introduction of these subsidy schemes was problematic, not only from an efficiency perspective but also from a distribution point of view.

Daily Mail

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