1 September 2012

Zambia: Making a Decision On What to Grow


FARMERS everywhere are now selling their maize, groundnuts, tobacco, soyabeans, rice, cassava and other food crops that they produced in the last growing season.

The hard working farmers have become instant millionaires and the unthrifty ones are even spending their once hard-earned cash lavishly.

However, the wise ones are thinking so hard of what they are going to grow the coming season.

I have always been a supporter of the thinking that commodity markets drive production in agriculture.

The factors that affected various commodity markets will have a great bearing on what the farmers will produce this season.

This does not only happen with our Zambian farmers, but even advanced farmers like those found in America, however, the only difference could be the level at which they make the decisions.

This differentiates those that are agricultural businesspersons and agricultural entrepreneurs.

Generally, during this marketing season, the prices of maize, tobacco and soyabeans have been good throughout the season.

The price of maize has always been good for the past four to five marketing seasons but what have been discouraging the farmers were the payment systems.

However, the payments for this season have been like in an election year - quite prompt! This has led a lot of farmers to think of what they should produce this coming season and I have received several requests seeking advice on what crops they should grow.

I remember telling one farmer that he should not only grow one crop but three to four; I told him that he can grow a hectare of maize for his four-member family for food, a bit of groundnuts for both the market and eating; a hectare or so of soyabeans and hopefully two hectares of cotton, and that he should not forget to keep rearing the goats and chickens that he has.

The response I got was a five minutes of laughter before he reminded me that the prices of cotton were very poor this season and most people are thinking twice on whether to grow it.

I told him that it is the reason he should grow it more than he did because the demand will outweigh supply as very few will venture into that commodity.

To cut the long story short, I had a tough time to convince the farmer; of course, he was telling me that he will instead grow a bigger area for tobacco because the prices have been very good.

I finally told him that he has the final say of what he has to grow and that I was just giving him a guide.

Normally, this has been the trend worldwide about commodity prices, they are always fluctuating and it is the reason why the private sector with Government support should invest more in value addition.

By so doing, we shall be creating local demand for the commodity. Since January, I have always been giving an example of the prices of soyabeans way before the market was even open.

I remember daring my readers of this article in February that the prices of soybeans will never be lower that K2, 000 per kilogramme and this is true.

The lowest farm gate price I ever heard of being offered was K2, 200 per kilogramme. The reasons besides the partial drought that befell the region is that we have created a local demand for the commodity due to the expansion of the local processing capacity.

Remember that this marketing season alone, we have seen three bigger factories being established; the Mt. Meru along Lusaka-Kabwe Road (10 miles from Lusaka in Chibombo District), the Emman processing factory in Mpongwe area (Luanshya rural) and the increased capacity by Zambeef through the Zamanita.

For the second year in a row, Zambia has been a net importer of soyabeans. Surprisingly enough, the prices in Eastern Province had at one time increased to K3, 000 per kilogramme - higher than Lusaka because of the Malawi-Mozambique influence.

The prospects of opening the Zambia-China Mulungushi Textiles in Kabwe next year (going by our politicians' sentiments), will create a relatively increased local demand.

To date, I just haven't come to terms with what led to the suppression of the cotton world market because USA, the largest producer of cotton didn't have a good season due to erratic rains.

I will try to dig deep and find out why (my immediate thinking could be that larger producers like India, USA, Pakistan and China could have had carry over stock from last season or that the economic depression could have suppressed the demand from China - it's just my thinking).

However, this aside I can assure the farmers that the prices of cotton and soybeans will remain competitive next season.

There has been a school of thought from farmers that since the tobacco prices were very good this season, most of them wants to switch from cotton/soya beans to tobacco.

I will discourage anyone from making such a risky decision, not because I don't like tobacco but farmers should learn to grow a bit of everything (for your own information, I hate tobacco. It's the reason I don't write about it here).

About three weeks ago, I received a call from one concerned citizen who complained that in spite of the bumper maize harvest and adequate soyabeans production, the cost of feed is going up.

Actually, he mentioned that even the cost of raw materials for feed formulation were too high as though we are importing them.

I believe my brother must have gotten the reason why it is like this. Firstly, America, one of the largest producers of corn and soyabeans had a very bad season. So did Brazil.

Actually, some of the soyabeans that are used in the poultry industries in South Africa, Mozambique and Angola are imported from Brazil, meaning a bad season for that great nation meant a great shortage in the Southern region.

China, in spite of being a great producer of cereals and grains, imports most of it supplies from USA.

Therefore, a bad season for America means a big shortage in China (mind you, there are more than one billion people there).

If you have followed the latest pronouncements from the Minister of Agriculture, he has said they will mop up all the grain produced this season because there is a great shortage in the region due to the bad season we had.

Zimbabwe, Tanzania, DR Congo and others have their eyes fixed on Zambia. Mama, back in the village don't allow anyone to cheaply buy your precious grain because the prices will definitely keep rising until the next harvest.

Let's chat again next week God willing and I appreciate your comments, keep them rolling in.

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