COMMUNITY BASED MONITORING SYSTEM PROJECT PRESENTATION PROJECT TITLE
COMMUNITY BASED MONITORING SYSTEM PROJECT PRESENTATION PROJECT TITLE: CBMS- AGRICULTURE SYSYEM IN ZAMBIA- THE CASE OF KATUBA WARD, KWACHA CONSTITUENCY, KITWE ZAMBIA STUDENT NAME : MALAMA PRISCOVIA SIN PROGRAMME : 1702197170 : MASTERS WITH EDUCATION
PROJECT DETAILS STUDY TYPE : CBMS AGRICULTURE SURVEY INITIATORS YEAR : ICU AND ZRDC : 2017 GEOGRAPHICAL CHARACTERISTICS Ø LOCATION : COPPERBELT PROVINCE Ø DISTRICT : KITWE Ø CONSTITUENCY : KWACHA Ø WARD : KATUBA
OBJECTIVES THE OVERALL OBJECTIVE OF THIS STUDY WAS TO DETERMINE AGRICULTURAL RISKS OF SMALLHOLDER FARMERS IN ZAMBIA. INDICATOR 1; AGRICULTURAL RISKS INDICATOR 2; AGRICULTURAL RISKS
INTRODUCTION AGRICULTURE IS THE ECONOMIC ENGINE OF MOST ECONOMIES IN SUB-SAHARAN AFRICA (SSA) CONTRIBUTING AT LEAST 70 PERCENT OF EMPLOYMENT, 40 PERCENT OF EXPORT EARNINGS, AND 30 PERCENT OF GROSS DOMESTIC PRODUCT (GDP) AND UP TO 30 PERCENT OF FOREIGN EXCHANGE EARNINGS (IFAD, 2002). IN ZAMBIA, THE SECTOR CONTRIBUTES 18 -20 PERCENT TO GDP AND PROVIDES A LIVELIHOOD TO 50 PERCENT OF THE POPULATION. IT ALSO ABSORBS ABOUT 67 PERCENT OF THE LABOUR FORCE (GRZ 2004) AND REMAINS THE MAIN SOURCE OF INCOME AND EMPLOYMENT FOR RURAL WOMEN, WHO CONSTITUTE 65 PERCENT OF THE RURAL POPULATION (GRZ 2006). THEREFORE, INCREASES IN RURAL INCOMES ARE EXPECTED TO RESULT IN OVERALL POVERTY REDUCTION AND FOOD SECURITY.
DEMOGRAPHIC CHARACTERISTICS OF THE SAMPLE Demographic characteristic of the sample 37% 63% number of male 114 number of female 66
THE CHART ABOVE SHOWS THAT POPULATION IN MY SAMPLED AREA WITH THE NUMBER OF 43 HOUSEHOLD (HH) INDICATES THAT THE NUMBER OF MALE ARE 114 REPRESENTED BY 63% AND THE NUMBER OF FEMALE IN THE SAMPLED AREA ARE 66 REPRESENTING 37% OF THE SAMPLED POPULATION.
DEMOGRAPHIC PERCENTAGE NUMBER OF THE HOUSE HOLD INTERVIEWED IN THE SAMPLED POPULATION DEMOGRAPHIC PERCENTAGE OF THE HEAD OF THE HOUSEHOLD 23% 77% FEMALE 10 MALE 33
GEOGRAPHICAL FEATURES AND CLIMATE INDICATOR 1 AGRICULTURAL RISKS The country has three main topographical features namely (1) mountains with an altitude of at least 1500 meters above sea level; (2) plateau area with an altitude ranging from 900 to 1500 meters; and (3) low lands with an altitude of between 400 and 900 meters. There are three distinct seasons and these are: • Cool and dry season from May to August; • Hot and dry season from September to November; and • Warm and wet season from December to April.
RAINFALL AND VEGETATION Zambia is divided into three major ecological zones. Zone 1 receives rainfall below 800 millimeters; Zone 2 receives rainfall between 800 and 1000 millimeters whilst Zone 3 receives rainfall above 1000 millimeters (Refer to Figure 1 for location of zones). The vegetation of the country is mainly savannah woodlands in high rainfall regions of the country and tropical grassland in low rainfall regions.
A MAP SHOWING AGRO-ECOLOGICAL ZONES IN ZAMBIA REGION III REGION 1
ACC 0 RDING TO THE MAP ABOVE COPPERBELT IS REGION III WHERE RAINFALL IS ABOVE 1000 MM MEANING IN KATUBA WARD FARMERS FACE HIGH RAINFALL WHICH IS ONE OF THE AGRICULTURAL RISK TO FARMERS IN THE WARD. SO WEATHER IN THIS WARD IS A RISK TO FARMERS BECAUSE (I) THEY CANNOT PLANT EARLY MATURITY CROP MAIZE SEED IN THE AREA. (II) IF FARMERS ARE NOT EDUCATED ON THE WEATHER PATTERN CAN LOSE THEIR CROPS BECAUSE OF IGNORANCE ABOUT THE WEATHER PATTERN IN REGION II.
THE MAIN WEATHER RISKS percentage distribution of weather risk tempreture 3 eccess rains 40 drought 0 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
ACCORDING TO THE CHART ABOVE IT SHOWS THAT THE MAIN RISK FARMERS FACE IN KATUBA WARD IS WEATHER AS I EARLIER MENTIONED THAT KATUBA BEING IN COPPERBELT ITS FOUND IN REGION III. FROM THE STATISTIC ON THE ABOVE CHART REPRESENTS THE NUMBER OF RESPONDENTS IN MY SAMPLED POPULATION AND 93% OF THE RESPONDENTS SAID THAT MAIN WEATHER RISK IN THE AREA IS ACCESS RAIN WHILE 7% SAID THAT ITS TEMPERATURE. AND THE ONLY MANAGEMENT TO WEATHER RISK IS BY KNOWING THEIR AREA THE PATTERN OF RAINS.
PRIMARY PRODUCTION RISKS IN YOUR AREA Percentage (%) distribution of production risk 11% 40% 26% 23% pests 5 diseases 11 weather 10 lack of acess to input 17
ACCORDING TO THE FINDINGS IN THE ABOVE CHART ON THE PRODUCTION RISK IN THE SAMPLED AREA IT SHOWS THAT OUT OF THE 43 RESPONDENTS 17 REPRESENTING 40% SAID THAT THE MAIN RISK IN PRODUCTION IS LACK OF ACCESS TO THE INPUTS WHILE 11 REPRESENTING 26% SAID THAT DISEASES IS ALSO RISK TO PRODUCTION AND 10 RESPONDENTS REPRESENTING 23% SAID THAT WEATHER ALSO IS A RISK TO PRODUCTION IN THE SAMPLED AREA.
ACCESS TO FINANCE Term finance can be categorized in different ways. Depending on the time horizon, a distinction can be made between medium-term finance (from one to five years) and long-term finance (above five years). According to the source of funds, internal or self-finance through retained profits or other income sources of the farm household can be distinguished from external finance using funds owned by third parties. External finance can be provided through different financial instruments such as term loans, leasing or the temporary investment of third-party equity (equity finance), whereas self-finance strategies may use deposit instruments.
THE CRUCIAL ROLE OF EXTERNAL TERM FINANCE • There is a trade-off between profitability and risk in the use of internal versus external finance. On the one hand, external term finance allows farmers to ‘save down’ by anticipating future income, including the incremental cash flow generated by the investment, in order to finance present investment costs. This has two main advantages over selffinance: • It allows farmers to carry out profitable investments earlier by leveraging their equity and existing cash flow. • Investment costs can be spread over a period of several years, enhancing the affordability of ‘lumpy’ and larger (but often more profitable) investments.
percentage distribution if farmers buy inputs 30% yes 13 no 30 70%
ACCORDING TO THE CHART ABOVE IT SHOWS THAT MOST OF THE FARMERS DON’T BUY INPUT BUT DEPEND FROM COOPARETIVES FOR THERE FARMING SEASON. 70% REPRESENTING 30 RESPONDENTS SAID THAT THEY DON’T BUY INPUTS APART FROM WAITING FROM THE GOVERNMENT. AND REPRESENTING 13 RESPONDENTS USE THEIR MONIES TO BUY INPUTS. 30%
RISKS OF FINANCING AGRICULTURAL TERM INVESTMENTS ANY INVESTMENT APPRAISAL IS BASED ON CERTAIN ASSUMPTIONS ABOUT TECHNICAL AND PRODUCTION PARAMETERS, FUTURE DEMAND FOR AND PRICES OF AGRICULTURAL PRODUCTS, COST AND AVAILABILITY OF INPUTS, AND INVESTOR MANAGEMENT PRACTICES. HOWEVER, UNCERTAINTY ABOUT THE FUTURE DEVELOPMENT OF THESE PARAMETERS INCREASES WITH LONGER TIME HORIZONS, AS DOES THE LIKELIHOOD THAT UNFORESEEN EXTERNAL EVENTS WILL AFFECT THE FEASIBILITY AND PROFITABILITY OF THE INVESTMENT. THUS, APPRAISING RISK AND PROFITABILITY BECOMES MORE DIFFICULT AS AMORTIZATION OR GESTATION PERIODS LENGTHEN. • AN IMPORTANT DISTINCTION CAN BE MADE BETWEEN IDIOSYNCRATIC AND SYSTEMIC RISKS: • IDIOSYNCRATIC RISKS[8] ARE NON-CORRELATED AND ONLY AFFECT INDIVIDUAL FARMERS. THEY INCLUDE TECHNICAL RISKS, SUCH AS BREAKDOWN OF FARM MACHINERY, BUT ALSO RISKS RELATED TO THE INVESTOR AND HIS FAMILY, SUCH AS ILLNESS OR THE DEATH OF A FAMILY MEMBER. • SYSTEMIC RISKS[9] ARE COVARIANT AND AFFECT ALL PRODUCERS IN A REGION OR OF A CERTAIN COMMODITY. THEY INCLUDE CLIMATIC EVENTS SUCH AS DROUGHTS AND FLOODS, MAJOR OUTBREAKS OF PESTS AND DISEASES, SUDDEN PRICE DECLINES OR DRASTIC CHANGES OF MACROECONOMIC PARAMETERS (EXCHANGE RATE, INFLATION, ETC. ). • IN PRACTICE, MANY RISKS LIE SOMEWHERE BETWEEN PURE IDIOSYNCRATIC AND SYSTEMIC, Because They May Affect Farmers In Different Ways. First, External Shocks Differ In Their Intensity And Frequency. Second, Location Factors And Management Practices Shape The Impact Of Adverse Events On Individual Farm Households. • The Next Section Discusses The General Risks Of Financing Agricultural Term Investments Before Turning To The Specific Risks Affecting The Supply Of Term Finance.
IN CONCLUSSION The importance of farming to Zambia and its citizens cannot be over emphasized. However the majority of the Zambian farmers face a number of related problems. Firstly and foremost Zambian farms are run by ordinary people with little information on farming and farming trends. Farming techniques are passed on from generation to generation and some of these methods are outdated and not very effective. This creates problems with the technical aspect of the day to day operations of the farm. When a disease breaks out on either the livestock or crops, most farmers tend to wait for advice from local experts from the ministry of agriculture and livestock. But these experts do tend to take long and the problem may have escalated before the information is made available. A case in point is the Army worms attack that destroyed huge hectors of maize fields. Farmers had no information on how to deal with these pests.
SECONDLY, FARMERS IN ZAMBIA LUCK THE MARKETING OPPORTUNITY TO MARKET THEIR PRODUCTS. THIS IMPLIES THAT THE GENERAL PUBLIC WHO ARE THE WOULD BE BUYERS DO NOT KNOW WHICH FARMER IS PRODUCING WHICH PRODUCT AND THIS LEADS TO LOW SELLS AND PROFITS FOR THE FARMERS. THIS HAS LED TO THE FARMERS CREATING INFORMAL MARKETS SUCH AS ROADSIDE SHOPS AND LOCAL COMMERCIAL SHOWS WHICH ONLY COME ONCE IN A YEAR. A GOOD EXAMPLE IS THE AGRICULTURE AND COMMERCIAL SHOW WHICH HAPPENS IN AUGUST IN LUSAKA. THIRDLY, THE GOVERNMENT OF THE REPUBLIC OF ZAMBIA DOES GIVE SUBSIDIZED FERTILIZERS AND INPUTS TO THE FARMERS ARE REQUIRED TO REGISTER WITH A LOCAL COOPERATIVE. UNFORTUNATELY THE FARMER’S RECORDS AT THESE COOPERATIVES ARE SAVED MANUALLY IN BOOKS. THIS GIVES RAISE TO CORRUPT ACTIVITIES AS SOME FARMERS ARE TEMPTED TO REGISTER TWICE WITH DIFFERENT COOPERATIVES SO AS TO GET DOUBLE THESE INPUTS. THIS IMPLIES THAT SOME FARMERS DO NOT GET THE MUCH NEEDED INPUTS.
LOAN FROM BANKS • According to the finidings from the respondents most farmer has got no access for loans from the bank because of the issue of collateral. • Collateral refers to the assets pledged as security by borrowers until their loans are repaid. It has two important functions. First, it serves as a screening device to reduce wilful default. Borrowers providing collateral, and especially large amounts relative to the loan size, are signalling an intention to make good-faith efforts to fulfil their loan contracts. Second, it reduces lending risk by providing an additional asset that can be liquidated for repayment of the loan. Collateral is more important for rural term lending than for short-term, working-capital loans due to the greater uncertainty regarding borrower willingness and ability to repay
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