August 15th, 2015 - ZNFU Weekly Friday Brief (Week #33)

Excerpts from the ZNFU Weekly Friday Brief, Week 33
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There is an inescapable sense of doom in this one ... the combination of uncertainty over ZESCO and the worry about the next season's rainfall pattern leave me with a bit of a sense that the world is tearing loose from it's moorings. This has been abetted by me finding out Sesame Street is headed to HBO this morning; the surrender of this planet to the worship of money.

As usual, if any ... Author's notes in red:

FRA MAINTAINS MAIZE PURCHASE PRICE…

The Food Reserve Agency (FRA) has maintained its maize purchase price for the 2015/16 marketing season at K70 per 50kg bag or K1, 400 /MT.  The agency will be buying a 40kg bag of rice at K60. The agency has further stated that it would start the purchase of grain next week Monday 17^th August 2015. Eligible farmers will be paid over the counter through identified Financial and Banking institutions after presenting official purchase documents as a way of uploading accountability and governance in the use of public resources. 

Public resources are usually released to the farmers after 4 to 8 months if we're going off past performance of the FRA.

ZESCO LTD URGED TO INCREASE EMERGENCY MEASURES

The power outlook from now until the next rainy season remains gloomy. ZESCO revealed at a meeting with farmers held on 13^th August 2015 that participation in load shedding measures to curb demand has to come from everybody. The mines who are currently not being load shed have been engaged by ZESCO and are expected to furnish ZESCO with details on how they will contribute to reducing their demand for power in two weeks because the country’s generation is on the brink of a shutdown.  From the information shared at the meeting, it was evident that a shutdown at Kariba could occur in early October, if the mines maintain a business as usual stance because then only 68.9 days of power (oh snap) is what is available under this scenario. However, with all participating in load shedding including the mines, generation at Kariba stretches into November resulting in 98.5 days of power becoming available. Wow, the reservoirs don't usually start to fill until New Years' ... particularly when the are as silly low as they are now.

  

Going forward, additional power is expected to come from Itezhi Tezhi, 120 MW in early November and in January 2016, 150MW is expected from Coal Generation by the IPP at Maamba while another 150MW is expected to follow in March 2016 from the same source. However, these being new generation plants, the time frames could vary suddenly as circumstances keep evolving.  In addition, 174 MW emergency power has been secured from Mozambique (wait a minute ... isn't Cabora Bassa downstream of Kariba Dam?) and this will be available until December. Meanwhile, ZESCO indicated that a forecast of power (under different scenarios) for Zambia and the region will only be ready by end August, 2014 (2016) although one of the big unknown factors will be the rainfall pattern for this year.

After deliberations, it was resolved that ZESCO should concentrate on importing as much power as it can to cover the deficit and that ERB should look at the pricing mechanism without delay. There was a general feeling that paying more for imported expensive power given the current circumstances is better than the huge costs associated with running generators.  In addition, engage Government to take immediate measures to reduce the cost of diesel by removing the added taxes so that the cost of running generators reduces. Further, the negative impact of load shedding on the agricultural sector should be clearly stipulated to policy makers because poor performance of the agriculture sector has ramifications on the country’s food security and job levels. This would manifest in rising inflation and macroeconomic instability because as production of food gets affected by load shedding, imports will have to fill the gap and this will put more pressure on the exchange rate.

Just a note ... commercial farmers in Zambia produce a great deal of wheat, some barley, and sugar thanks to the wonder of irrigation. However, pivot irrigation schemes require a great deal of electricity, or all that wheat, barley and sugar won't grow. See next heading below ...

With this gloomy picture, all industries should contribute towards reducing the downside risks of the power deficit on the economy by equitably cutting back on demand for power but priority should be attached to safeguarding producing of food for the nation.    ZESCO Ltd was also requested to step up the visibility of their sensitization campaigns on demand side management in order to reduce wastage of power which is observed in many public places. The Union will be engaging the authorities for action in these areas.

AREA UNDER WHEAT CULTIVATION MOVES UPWARDS IN 2015

The wheat commodity committee met yesterday, 13^th August 2015 to review the preliminary wheat and barley production estimates for 2015 and the current marketing season.  Through remote sensing technology, the preliminary totals are under wheat and barley in Zambia has been estimated at 47,829 hectares. The meeting was informed by the consultant engaged to estimate Zambia’s winter crops production through satellite imagery that separation of the wheat from the barley fields would only be done over the next few weeks as the crops approach maturation and hence will emit more distinct signals. It was highlighted that whilst some farms had reduced their wheat area planted due to expectations of load shedding and reduced water levels, there were new entrants in wheat production especially in Serenje area. It was further noted by the farmers that millers and traders had slowed down in their local wheat purchases as only about 60% of the crop was commitment whilst about the same time last year, 97 percent of the crop was committed. Information from the traders indicated that millers are only signing up contracts with traders for wheat delivered up to January on assumption that millers will be allowed to import wheat again. The meeting resolved that in the event of a deficit, the period for any imports should be between 1^st April, and 31^st July, 2015 in order to allow for all the local wheat to be committed.

The meeting bemoaned the decision by government to issue an additional 11,000MT of wheat import permits and urged that the 31^st August 2015 deadline for all wheat imports to cease should be strictly adhered to and import duty should be reinstated on imports. Government should further be encouraged to adopt the stance taken by South Africa where when global wheat prices fall to a certain threshold, the import duty is revised further upwards to avoid injury on local producers. Earlier on in the year, the Minister of Agriculture and Livestock approved the importation of 75,000MT of wheat duty free. As at end of July, ZRA data revealed that about 59,600MT of wheat had been imported into the country. I sometimes wonder if white "milk" bread is creeping up the charts of Zambia's staple foods.

WATER BLUES HITS MASAITI

Water shortage has hit Masaiti district (up in the Copperbelt where rain is usually decent) with most streams drying up. This development has raised fears mostly among livestock farmers who depend on natural streams for domestic and livestock use. In Michinka area a number of wells have also dried up and people are now walking long distances to fetch for this rare commodity.  Farmers in the area have since appealed to the relevant authority to consider drilling boreholes to mitigate the problem. 

KABOMPO FARMERS WELCOME FRA AS BUYER OF LAST RESORT

Farmers in Kabompo district of North-western province are eager to see the start of the marketing season. This follows the announcement of the maize price by the Food Reserve Agency. Farmers that were spoken to say this exercise has long been awaited as most of them had their maize stacked at satellite depots for over a month now. Speaking when he visited the ZNFU office, Kabompo District Farmers Association chairman Mr. George Munyingu said it was good that the FRA maize price has been announced. Mr. Munyingu has since implored the Government to consider buying the commodity from the rural farmers that have limited options of where to sale their produce.  Mr. Munyingu said buying from the rural farmer will help them with secure markets particularly that the only available millers can only be found about 350 Km away.

Mr. Munyingu said transporting one by 50kg bag on such a distance, costs K15.00 making the cost of production to go high. Mr. Munyingu further hopes that the farmers will be paid on time to enable them plan better for next season.

MUMBWA FARMERS URGED TO WATCH MAIZE MARKET TRENDS

The ZNFU Director, Mr. Richard Lisimba has urged farmers to hold on to their maize crop and only release enough to offset their outstanding loans so that they are paid back on time. This was said during the AGM for Mumbwa DFA that was held on 12^th August, 2015. He informed the meeting that due to poor rains experience in the just ended season, the crop yield was also poor thereby reducing the availability of the commodity on the market. He gave an example of Mongu where the commodity was already trading at K90/50kg bag on the open market.

Meanwhile 47 satellite FRA depots in Western Province have been opened that will be used to purchase maize and rice meant for strategic reserves this marketing season. This came to light when the ZNFU visited the Provincial Marketing Coordinator Mr. Lubasi Nawa at his office in Mongu. Didn't know there was any maize to buy this year ... need to find out where these depots are.... do know they're paying around K80 for a 40kg bag of rice.

August 14th, 2015 - The Food Reserve Agency (FRA) floor price set at K70 x 50kg bag

Zambia's Food Reserve Agency (FRA) announced its floor price yesterday, which I heard over the ZNBC news whilst enjoying a meal of rice and beans that was positively resplendent with cooking oil.

To clarify from what mi amigo Dr. William Burke told me years back, it's not really a true "floor price", or more appropriately (?), a "price floor" ... FRA's floor price is more appropriately, a pan-territorial price for a fixed weight / volume, the ubiquitous 50kg maize grain bag purchased by FRA at an approved depot or satellite depot anywhere in Zambia. This year it is ... drumroll ... K70 per 50kg bag, of which they will purchase a supposed maximum of 500,000 metric tonnes.

Hmm. As CSPR says, nothing exciting. No change from last year, especially considering two factors:

1. USD to ZMW exchange rate ... a year ago, the Zambian Kwacha (ZMW) was trading around K6.1 to $1.00, so a bag of maize was worth approximately $11.50. Today it just closed at K7.90 to $1.00 (gulp), meaning a bag of maize is worth about $8.86. This is a kick in the slegs to farmers who don't get subsidized maize support, as fertilizer and seed prices are often estimated in USD and then converted to ZMW. 
2. IT BARELY RAINED THIS YEAR IN THE SOUTHERN HALF OF THE COUNTRY. That means we have less maize and the FRA is paying less (in dollars) for it.

However, this is a glimmer of hope for us nut-jobs who harp on about diversification; in its own groping way, the government appears to be backing away from its deathgrip on Zambia's maizescape. It's likely (though no standing government would admit it) that their handling of maize through the FRA has been a significant distortion [read: wandering disaster] of the food market and a spectacular loss of taxpayer's money (state-to-state / donor aid usually lands in research and extension in some garbled way like moi).

We'll see ... my prediction is that maize cropping will drop somewhat depending on how well they stick to the quota of 500,000 MT, and if they are at their usual snail's pace of paying the farmers around December / January. FISP is still intact and far more of an expression of government largesse in rural areas, so it will likely stand politically.  

In the meantime ... maize grain is selling at K110 / 50kg (packed to 60-65kg) on the open market. Guess hunger and Adam Smith are moving the dial on their own ... 

August 5th, 2015 - The National Ag. Show

ZESCO continues to be an issue impacting work; we had a crap genset (what they call a generator here) that gave out Friday morning, so I went to the Showgrounds for the 2nd day of the National Agriculture Show, or as it's formally known, the Agriculture and Commercial Show of Zambia (ACSZ). 

The Show is a bit of a mystery to many people, mostly because of the spatial confusion that everyone is struck with inside the showgrounds ... this is due to it's organization and the overall lack of straight lines that permeates the Zambian id. 

The official map looks like this:

However, once you get inside, it feels a lot like this: 

I'm sort of bullet-headed when I go in there anymore for the following reasons:

• As the Show days go by, the people attending the stands care less and become nearly unresponsive ... it's a bit like the old Nintendo video games where the characters repeat the same thing over and over;
• At the same time, the number of attendees reaches an absolutely silly level;
• The lack of an index of who's where and showing what (see above, 2nd figure) makes visiting a specific area more of a voyage of discovery in a writhing sea of people;
• Most of the contacts you make never respond, making it a waste of business cards;
• I've been going to the show since 2007 and the amount of change (outside of more large-scale farm equipment) is negligible.

There's many other reasons I hustle in and out, but the biggest is that I know exactly what I want:

• SEEDS, man

Yes, seeds ... the small-scale farmers displays in Lima Hall and at the Women/Youth Stands are like crack for a small-scale agriculturalist; I go and eyeball the provincial stands for oddball seeds ... Tabora beans, sword beans, Congo beans, pinto groundnuts, tree seeds, etc. Usually, I reserve on Fridays and buy on Monday (after the displays are judged) ... ostensibly, the officers (usually provincial level MAL technocrats) sell on behalf of their farmers, but I am neither able nor willing to set up the accountability structures to ascertain that. I just want seeds of every shade to throw at the sands of Western Province to see what might work. 

How did I do this year? Not bad:

1. Sorghum x 4 varieties (15kgs total);
2. Sword beans Canavalia gladiata (5kg);
3. Red lima beans Phaseolus lunatus (5kg);
4. Groundnuts [peanuts] x 3 varieties (speckled, purple, Luena (Natal Common), and White Natal Common);
5. Lab-lab beans Lablab purpureus (5kg);
6. Pigeon peas Cajunus cajun (5kg)
7. New Rice For Africa (Nerica 4, Upland rice) 10 kg
8. Nerica 2, Upland rice 4 kg
9. Traditional maize (Pandawa, red tinted dent) 6kg
10. Angolan (brown) dent maize, 2 cobs
11. Guar Cyamopsis tetragonoloba (handful)

What do I do with these? Not much ... I have approximately 5 square meters in front of my house that can be cultivated (which I have harvested a nice little bit of cowpeas, traditional maize, and lima beans). Nope, they get packaged in quart-sized Ziplocs, labelled with a permanent marker, and shipped out to our lead farmers (60 total) ... it's amazing how they can sort out the planting and observations now, and give relatively good feedback on the performance. I also keep some handfuls for friends and to others who I collaborate on to propagate / multiply the seed ... if we find anything good, we can ramp it up in a hurry. 

It used to be sort of like throwing things out in the wind, but like I said ... now we've got a coterie of farmers who value experimentation and want to do more of it.