DESCRIPTION OF THE INDUSTRY Zambian staple crops were sorghum and millet, but gradually replaced by maize. There are mainly two types of maize in Zambia, yellow and white maize, white maize being the one preferred by the majority of both consumers and producers. Maize can be produced in areas where the rainfall exceeds 350 mm per year. Production is dependent on an even distribution of rain throughout the growing season. despite bumper maize harvests, agriculture makes up only about 20 per cent of GDP while employing roughly 85 per cent of the population. This is because Zambia concentrates more on copper production. maize is grown by small, medium and commercial farmers, with small and medium farmers being the majority and producing more. (See Table 1)

Continu… Table 1. Zambian maize production of small/medium scale

farmers and commercial farmers, 2003/4 -2007/8.

PRODUCTION AREAS Far more area is given to this commodity than any

other. This is because its Zambia’s staple food. Maize is grown all around the country. But some

provinces produce more than others, one of the reasons is the variation of productions costs in the different provinces (seeTable 2).

Table 2. Share of Total Production and cost of production in Kwacha un-rebased/kg50 bag by Province

Cont… Western Province is where we find the highest total

cost (63.6 ZMK/bag). High production costs in Western Province are due to higher family labor input than in all other provinces, which implies a labor-intensive and capital-saving approach to maize production.

And many areas of Western Province have poor soils that are not suitable to intensive maize production.

The lowest total cost of production, on the other hand, is found in the Northern Province, where the average 50kg bag of maize in 2010 was produced for ZMK 37.6.

It has high use rates of cash inputs, and therefore relatively capital intensive and labor-saving production practices.

Production Trends The introduction of chemical fertilizer subsidy

programmes and the raising of the producer price by the government in 1970 had a substantial positive impact on maize production.

Maize production stagnated in the 1980s mainly due to downscaling of fertilizer subsidy programmes, although the producer price was raised successively.

The slump continued throughout the 1990s, and the maize planting area has stayed on a par at around 0.50 million hectares.

Cont… The 2006-2008 harvests are historically average in

terms of maize yield and harvest, while 2009, 2010, and 2011 have been three consecutive bumper crops, with 2011being the largest in Zambia's recorded history.

Jointly these three factors; good weather, increased fertilizer use, and increased use of improved maize seed explain nearly all of the explained increase in yield from the base period to 2011.

Zambia's maize production fell 11 per cent in the 2012/2013 harvest after poor weather and a worm infestation impacted on yields.

MARKET STRUCTUREDomestic Market and Prices

The Food Reserve Agency (FRA), is one of the main institutions within the Zambian domestic market.

The FRA’s original function was to establish and administer a national food reserve

Crop marketing and “market facilitation” were officially added as FRA functions when the Food Reserve Act was amended in 2005.

The Agency’s current objectives include: - raising rural incomes - improving national food security - and stabilizing crop prices.

Cont… Until 1992, the prices and distribution of maize was tightly

controlled by the state. - buying of maize from producers monopolized by Namboard

and Provincial Co- operative Unions. the government set a high producer price as an incentive to

maize farmers, while maintaining the retail price at a low level to help consumers procure their staple food.

-producer prices being higher than retail prices.

This forced the government to provide a subsidy to bridge the gap.

However, in 2013, the Zambian government decided to remove subsidies on maize and fuel.

That decision is likely to hamper output of the staple grain, raise prices and dash the countries goal of becoming a regional breadbasket.

TariffsCOMESA and EAC Tariff and Non-Tariff charges

Imported maize grain attracts varied import tariffs across the seven COMESA countries which are Zambia, Zimbabwe, Malawi, Uganda, Tanzania, Ethiopia and Kenya.

The level of tariff is different in each country.

In addition to import duties, there are some countries which charge non-tariff charges, such as VAT and import declaration fees on maize.

Cont.. Tanzania’s export of maize into the COMESA region is subjected to the Most Favoured Nations (MFN) rate of 5% to Ethiopia and Zambia.

In Ethiopia, Kenya and Uganda, maize imports from COMESA (including Zambia) attract an import duty of 4.5%, 3% and 4% respectively.

PROCESSING

Milling industry Maize meal, known as “mealie meal” in Zambia, is largely classified into;

the first-grade “breakfast meal” and

the second grade “roller meal”.

In rural areas, maize meal is mostly processed with small milling machine known as hammer mills . (see photo 1 below).

Cont…

Cont.. maize meal products are processed in large plants and supplied to urban consumers. (see photo 2 below).

In 2007, Zambia had 35 maize milling companies, which were involved in a fierce competition.

And about 7,000 hammer mills were reportedly registered in rural areas.

Cont…

The Beverage and Brewing industry

Other products processed from maize include various beverages. E.g maheu or munkoyo

- not only produced at home in both urban and rural areas for domestic consumption but also sold in markets.

Maize is also often used for brewing.

- the consumption of maize for brewing amounts to some 15,000 tonnes per year.

Animal Feed Industry

Maize is the major component of animal feeds and accounts for approximately 60 percent of their composition.

Feed manufacturers cope with the large fluctuations of price and supply by stockpiling, and as a last resort, importing.

In order to help avoid controversies over the use of maize for livestock, feed manufacturers use maize classified unsuitable for human consumption.

Maize value chain The maize market in Zambia is segmented with a less formal chain dominated by smallholder produce and relatively more formal channel through which commercial farmers market their produce.

Cont… Maize distribution channels in Zambia. Source: Interviews. JAICAF (2008)

Imports Maize imports are issued in Zambia as a means of monitoring the food situation within the country as well as keeping the price of the commodity within the reach of the consumers.

In bad years, when drought reduces output, Zambia imports maize.

There are typically responses from two key segments of the economy, public responses and private imports.

- Public responses: Government commercial imports and stock releases, and tight controls on private sector trade.

Cont… - Private Imports: Open borders and private imports cap domestic price increase.

- Under import bans and closed borders, maize prices can easily increase by 100% or more.

Exports During surplus years, Zambia exports maize.

In 2013, ZAMBIA had commenced the export of over 200,000 tonnes of maize.

The maize was being exported under the Government-to-Government agreement to Tanzania, Malawi and Zimbabwe.

- 20,000 tonnes of maize to Tanzania, - 35,000 tonnes to Malawi and the

remainder - 150,000 tonnes of the commodity to

Zimbabwe.

CHALLENGES AND OPPORTUNITIES OF THE ZAMBIAN MAISE INDUSTRY

Challenges: - Production is largely dependent on climatic conditions.

- government policies which have traditionally limited private sector participation

- distorted agricultural markets - Export opportunities are mainly limited to African countries.

- high input and capital costs because a large proportion of production inputs are imported.

 

Cont… Opportunities: - substantial investments in agricultural research by private organizations. E.g Zamseed and Maize Research Institute.

- Private maize hybrids have helped Zambia’s smallholder farmers realize the highest maize yields in Sub-Saharan Africa outside South Africa .

- Zambia achieved self-sufficiency in the maize crop in recent years with help from private cultivators.