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Developments in Fertilizer Marketing in Zambia: Commercial Trading, Government Programs, and the Smallholder Farmer

Author

Listed:
  • Shawa, Julius J.
  • Haantuba, Hyde H.
  • Belemu, A.
  • Ngulube, E.
  • Banda, A.K.
  • Govereh, Jones
  • Jayne, Thomas S.
  • Nijhoff, Jan J.
  • Zulu, Ballard

Abstract

The debate on fertilizer reform process in Zambia has two contrasting views. Some stakeholders continue to be convinced that the private sector is unable to adequately serve the needs of smallholder farmers, especially in the more remote parts of the country. Only 20 per cent of smallholder farmers used fertilizer in 1999/00. There are serious concerns over private traders’ willingness to deliver inputs on credit for low-resource farmers. According to this view, government fertilizer and credit distribution are indispensable for promoting smallholder agricultural productivity growth. Others believe that the fertilizer market should be restructured even more fully to remove the constraints on the private sector and reduce the drain on the public treasury. This latter line of argument is based on the premise that the continuation of government programs, while intended to meet the needs of remote and poor smallholder farmers, may actually undermine the market for private traders more generally and weaken the prospects for building a vibrant market-oriented fertilizer distribution system. Proponents of this view also contend that the private sector can indeed meet the needs of poor smallholder farmers in remote areas if the policy environment is conducive and if adequate investments in infrastructure are made to support a market economy. This study was identified by the Advisory Board of the Food Security Research Project, composed of government and private sector stakeholders in Zambia’s agricultural sector. The objectives of the study were to describe how the fertilizer industry has developed under the process of liberalization, to examine the effects of liberalization, to identify feasible opportunities to reduce farm-gate fertilizer prices and increase smallholder farmers’ access to fertilizer. Particular attention was given to the impact of government programs on the objective of increasing the private sector’s capacity and incentives to distribute fertilizer, and policy options for increasing fertilizer use in areas where it is profitable and contributes to agricultural productivity. This summary provides the main results of the study and recommendations for consideration by government. First, the general trends in the importation of fertilizer into Zambia and the contributions of different players are shown. This is followed by a presentation of the alternative marketing channels prevalent in Zambia during 1999/2000 and their respective market shares and other characteristics. Thirdly, key suggestions on how to reduce the price farmers pay for fertilizer are presented. Finally, the recommendations emanating from these findings are provided.

Suggested Citation

  • Shawa, Julius J. & Haantuba, Hyde H. & Belemu, A. & Ngulube, E. & Banda, A.K. & Govereh, Jones & Jayne, Thomas S. & Nijhoff, Jan J. & Zulu, Ballard, 2002. "Developments in Fertilizer Marketing in Zambia: Commercial Trading, Government Programs, and the Smallholder Farmer," Food Security Collaborative Working Papers 54459, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    • Handle: RePEc:ags:midcwp:54459
    DOI: 10.22004/ag.econ.54459
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    References listed on IDEAS

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    1. Jayne, T. S. & Govereh, J. & Mwanaumo, A. & Nyoro, J. K. & Chapoto, A., 2002. "False Promise or False Premise? The Experience of Food and Input Market Reform in Eastern and Southern Africa," World Development, Elsevier, vol. 30(11), pages 1967-1985, November.
    2. Deininger, Klaus & Olinto, Pedro, 2000. "Why liberalization alone has not improved agricultural productivity in Zambia : the role of asset ownership and working capital constraints," Policy Research Working Paper Series 2302, The World Bank.
    3. Govereh, Jones & Jayne, T. S., 2003. "Cash cropping and food crop productivity: synergies or trade-offs?," Agricultural Economics, Blackwell, vol. 28(1), pages 39-50, January.
    4. Jayne, Thomas S., 2000. "Improving Smallholder and Agri-Business Opportunities in Zambia’s Cotton Sector: Key Challenges and Options," Food Security Collaborative Working Papers 54456, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    5. Donovan, Cynthia & Damaseke, M. & Govereh, Jones & Simumba, D., 2000. "Framework and Initial Analyses of Fertilizer Profitability in Maize and Cotton in Zambia," Food Security Collaborative Working Papers 54460, Michigan State University, Department of Agricultural, Food, and Resource Economics.
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    Cited by:

    1. Diao, Xinshen & Hazell, Peter & Resnick, Danielle & Thurlow, James, 2006. "The role of agriculture in development: implications for Sub-Saharan Africa," DSGD discussion papers 29, International Food Policy Research Institute (IFPRI).
    2. Resnick, Danielle & Mason, Nicole, 2016. "What Drives Input Subsidy Policy Reform? The Case Of Zambia, 2002-2016," Miscellaneous Publications 246951, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    3. Resnick, Danielle, 2004. "Smallholder African agriculture: progress and problems in confronting hunger and poverty," DSGD discussion papers 9, International Food Policy Research Institute (IFPRI).
    4. Jayne, T. S. & Govereh, J. & Wanzala, M. & Demeke, M., 2003. "Fertilizer market development: a comparative analysis of Ethiopia, Kenya, and Zambia," Food Policy, Elsevier, vol. 28(4), pages 293-316, August.
    5. World Bank, 2007. "Zambia : Smallholder Agricultural Commercialization Strategy," World Bank Publications - Reports 8039, The World Bank Group.
    6. Resnick, Danielle & Mason, Nicole, 2016. "What Drives Input Subsidy Policy Reform? The Case Of Zambia, 2002-2016," Feed the Future Innovation Lab for Food Security Policy Research Papers 246951, Michigan State University, Department of Agricultural, Food, and Resource Economics, Feed the Future Innovation Lab for Food Security (FSP).
    7. Zhiying Xu & William J. Burke & Thomas S. Jayne & Jones Govereh, 2009. "Do input subsidy programs “crowd in” or “crowd out” commercial market development? Modeling fertilizer demand in a two‐channel marketing system," Agricultural Economics, International Association of Agricultural Economists, vol. 40(1), pages 79-94, January.
    8. Oluyede Clifford Ajayi & Festus K. Akinnifesi & Gudeta Sileshi & Sebastian Chakeredza, 2007. "Adoption of renewable soil fertility replenishment technologies in the southern African region: Lessons learnt and the way forward," Natural Resources Forum, Blackwell Publishing, vol. 31(4), pages 306-317, November.
    9. Resnick, Danielle & Haggblade, Steven & Babu, Suresh & Hendriks, Sheryl L. & Mather, David, 2018. "The Kaleidoscope Model of policy change: Applications to food security policy in Zambia," World Development, Elsevier, vol. 109(C), pages 101-120.
    10. World Bank, 2004. "Zambia - Country Economic Memorandum : Policies for Growth and Diversification, Volume 1. Main Report," World Bank Publications - Reports 15666, The World Bank Group.
    11. Xu, Zhiying & Jayne, Thomas S. & Govereh, Jones, 2006. "Input Subsidy Programs and Commercial Market Development: Modeling Fertilizer Use Decisions in a Two-Channel Marketing System," 2006 Annual meeting, July 23-26, Long Beach, CA 21270, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Crawford, Eric W. & Jayne, Thomas S. & Kelly, Valerie A., 2005. "Alternative Approaches for Promoting Fertilizer Use in Africa, with Particular Reference to the Role of Fertilizer Subsidies," Staff Paper Series 11557, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    13. Smale, Melinda & Jayne, T.S., 2003. "Maize in Eastern and Southern Africa: 'seeds' of success in retrospect," EPTD discussion papers 97, International Food Policy Research Institute (IFPRI).
    14. Robinson, Peter & Govereh, Jones & Ndlela, Daniel, 2007. "Distortions to Agricultural Incentives in Zambia," Agricultural Distortions Working Paper Series 48516, World Bank.

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    More about this item

    Keywords

    Agribusiness; Marketing;

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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