2 August 2012

Zambia: Raise Agriculture Sector Funding - ACF

THE Agricultural Consultative Forum (ACF) has urged Government to increase the allocation of funds to the agriculture sector in the 2013 National Budget to at least 10 per cent in line with the Maputo Declaration.

ACF executive director Joseph Mbinji said the Government should increase the allocation to the sector to meet the requirement for the Maputo Declaration.vMr Mbinji said to ensure pro-poor growth, increased private investment, competitiveness and development of the livestock sub-sector, the Government should improve its resource allocation to the sector.

He said resource allocation to the agriculture sector should be targeted at key drivers of growth, which includes investment in the livestock sub-sector.v"Stakeholders in the agriculture sector are keen to see increased allocation of resources towards breeding stock by recapitalisation of institutions such as Livestock Development Trust, Golden Valley Agricultural Research Trust, among others," he said in a statement in Lusaka yesterday.

Mr Mbinji proposed that the Government should zero-rate all livestock inputs and equipment, saying that the current Value Added Tax (VAT) system does not favour small-scale farmers.v"Even where the VAT import deferment scheme is used, small-scale farmers have no chance of deferring VAT," he said.

Mr Mbinji said Government should consider removing import duty on animal feed to improve the competitiveness of the livestock products through reduced feed costs such as re-classification of milk as VAT zero-rated products as opposed to its current status of VAT exempt status. "Due to this classification, a very low percentage of inputs tax can be claimed, which resulted in making the milk 10 per cent more expensive than if it was zero rated.

"Zero-rating milk will be for the benefit of the entire dairy industry, including consumers," Mr Mbinji said. He said milk churns, milk cooler used for milk storage, milk packaging materials and transport should not be charged tax saying slapping tax on packaging materials and equipment makes milk and milk products more expensive and generally unaffordable.

The agriculture organisation also proposed that the Government should create a dairy processing investment fund from which interested small and medium scale dairy processors can borrow for initial and up-scaling investment in the dairy processing.

He recommended that the Government should consider establishing a dairy cattle restocking subsidy that would enable interested farmers to import or purchase breeding stock as an immediate measure while the country improves its local breeding capacity.

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