1. THE POLITICAL ECONOMY OF RICE PRODUCTION IN ZAMBIA Scoping and Verification Study [September 2014]

2. OUTLINE OF PRESENTATION  OBJECTIVES OF THE STUDY  METHODOLOGY AND APPROACH  MAJOR FINDINGS  CONCLUSIONS  RECOMMENDATIONS

3. OBJECTIVES OF THE STUDY  Explore the agricultural sector’s potential for wealth creation and employment creation in Zambia;  Investigate agriculture crops and sectors with the most potential for employment and wealth creation;  Review existing literature to confirm existing production volumes and productivity;  Review current policy context; and  Engage key stakeholders with regard to input supply, production, processing and trading in rice

4. METHODOLOGY AND APPROACH TO THE STUDY  The Study used the Rice Value Chain approach and, in particular, the role that chain governance plays in the success or failure of the State achieving its rice development objectives;  The Study also used the Political Economy lens to identify and deal with key issues within the Rice Value Chain;  Data Collection  Key informant interviews  Field Visits

5. MAJOR FINDINGS  Overall, the study reveals that:  Despite government’s commitment to and frequent calls for diversification in the agriculture sector, the reality on the ground and, in particular, in the rice sub-sector, bears little resemblance to the actual politics of what works in terms of implementing and sustaining increased wealth creation and employment generation in the rice sub-sector.  Zambia’s rice farmers are growing a crop that no longer pays its way or increases employment and wealth creation opportunities.

6. MAJOR FINDINGS  The Political Context and Setting  The rice studies reviewed show that very little attention is being paid to the broader concerns of how political processes, actors, institutions, events and ideologies inform and affect moves towards developing the rice sector.  Lack of attention to these concerns could result in a live but fragile process that could be undermined by various actors in the rice value chain.

7. OVERVIEW OF THE AGRICULTURAL SECTOR’S GROWTH RATE

8. ANALYSIS OF GROWTH RATE, EMPLOYMENT AND WEALTH CREATION  Between 2009 and 2012, growth in the Agriculture, Forestry and Fisheries sector averaged 7 percent, exceeding the Comprehensive Africa Agriculture Development Programme (CAADP) target of 6 percent.  Between 2009 and 2012, the Agriculture, Forestry and Fisheries sector’s contribution to GDP was 18.5 percent.  Despite these growth rates, the sectors contribution to job creation and poverty reduction has not been impressive. Sector’s contribution to formal sector employment was 77,932 in 2011 and 79,490 in 2012.

9. CROP GROWING HOUSEHOLDS Crop Growing Households by Type of Crop Grown as a Percentage of All Crop Growing Agricultural Households in Zambia CropNumber of Households PercentCropNumber of Households Percent Maize1,340,03887.8Soyabeans110,3177.2 Groundnuts984,56764.5Other Crops101,3106.6 Sweet Potatoes827,60354.2Irish Potatoes81,3965.3 Cassava707,55646.3Bambara Nuts65,6054.3 Vegetables508,84633.3Orchards40,2182.6 Mixed Beans464,83230.4Burley Tobacco26,4261.7 Millet250,52416,4Velvet Beans21,8681.4 Sunflower191,67712.6Cashew Nuts18,1121.2 Cotton145,5989.5Paprika13,2560.9 Sorghum140,6399.2Virginia Tobacco12,2400.8 Cowpeas124,0028.1Pineapples4,8870.3 Sugar Cane115,9897.6Wheat4,4200.3 Rice114,4487.5Coffee2,0080.1

10. THE RICE SUB-SECTOR  Published statistics at the MAL and CSO indicates that the production of paddy rice has been increasing since 1987.  In 1987 production of paddy rice was 8,242 MT;  Ten years later, production of paddy rice rose by 51.3 percent to reach a total of 12,473 MT;  In 2007 production reached 18,314 MT;  Between 2007 and 2014 paddy rice output rose by 171.0 percent to reach 49,640 MT;  Increase is in response to demand from millers, traders and rice brokers.

11. THE RICE SUB-SECTOR –TRENDS IN PRODUCTION Province 200920102011201220132014 Metric Tonnes Central 2595761015218 Copperbelt 34374371304 Eastern 5,1205,7794,4182,3612,424900 Luapula 3,3111,8852,6533,4903,5372,254 Lusaka 156115204452337 Muchinga ---862292676929 Northern 20,99228,65325,90613,10613,55718,169 North- Western 945723814665401446 Southern 2500451721 Western 11,0881440714,76216,90115,49020,862 Totals 41,93051,65649,41045,32144,74849,640

12. THE RICE BALANCE SHEET 2008/092009/102010/112011/122012/132013/14 Paddy Rice Paddy Rice Paddy Rice A.Availability (i)Opening Stocks (ii)Total Production (iii)Total availability 2,799 24,023 26,822 178 41,929 42,107 na 4,641 49,410 54,051 7,058 45,321 52,378 2,737 44,747 47,484 A.Requirements (i)Staple Food requirements (ii)Food Reserve Stock (iii)Industrial requirements Stock Feed Breweries Seed (i)Losses (ii)Cross border trade Total Requirements 36,048 0 0 1,201 37,249 52,011 0 0 2,096 54,107 na na na 64,164 0 0 2,471 66,634 58,473 0 0 4,223 2,266 64,962 55,769 0 0 4,478 2,237 62,484 A.Surplus/Deficit-10,427-12,000na-12,583-12,548-15,000 A.Potential Commercial import/export 10,42712,000na12,583 15,000 A.Food aid import requirements 00na000

13. RICE PRODUCTION PROJECTIONS YearRice Projections 2013 to 2018 Rain-fed UplandRain-fed LowlandIrrigatedTotal Area In Ha Production In MT Area In Ha Production In MT Area In Ha Production In MT Area In Ha Production In MT 201325,20050,4007,20014,4003,6007,20036,00072,000 201821,00063,00010,50031,50010,50031,50042,000126,000

14. MAJOR GAPS AND CHALLENGES IN THE RICE SUB-SECTOR  The Study indicates that at the production level there are four major gaps or challenges to increased rice production. These are:  Low rice yields per hectare;  Inadequate research and variety development  Erratic supply of inputs; and  High seasonality of labour

15. OTHER CHALLENGES IN THE RICE SUB- SECTOR  Policy and legislative framework  There is no Cabinet approved policy to guide the development of the rice sub-sector.  The absence of a comprehensive rice policy has important funding implications for the rice sub-sector.

16. OTHER CHALLENGES IN THE RICE SUB- SECTOR  Chain governance  The term chain governance describes the extent to which interactions between the chain participants is organised. Generally speaking, good chain governance occurs when some actors in the chain work to parameters that are set by others. There are three dimensions of governance. These are:  Chain organization;  Institutions  Legislation and regulation

17. RECOMMENDATIONS  JCTR and its partners develop an advocacy strategy that will support the Zambia Rice Federation to develop the rice sector and enable the sector achieve its full potential;  JCTR and its partners initiate an advocacy strategy that promotes public-private dialogue;  JCTR and its partners develop an advocacy strategy that ensures that MAL develops and gets the rice policy approved within the next twelve months.