Mozambican agriculture: ripe for development (Africa Report n°32 – July 2011)

The country has abundant resources but investment is needed to make the transition from subsistence farming to cash crops.

Mozambique’s central and northern provinces are considered the breakbasket of the country but a lack of resources has had a negative impact on productivity.

While there is an abundance of major rivers and vast tracts of fertile land, a lack of investment has meant that subsistence farmers, who dominate the  sector, have to wait for rains to irrigate their fields.

The government is trying to meet the need for increased productivity by setting up the Beira Agricultural Growth Corridor (BAGC), which cuts across major roads and railways, linking the country’s second capital to the hinterland. The plan was to lure farmers to grow cash crops that could be easily marketed through the road and rail networks.

One of the founder organizations of the BAGC, the Alliance for a Green Revolution in Africa (AGRA) thinks the corridor is an ideal model for infrastructure development. But the plan is facing hurdles as farmers are not convinced they will benefit from growing cash crops such as tobacco and cotton.

« Most people prefer growing maize, or vegetables that they will readily consume at home rather than those involving labor-intensive cropping which will not pay in the end, » says subsistence farmer Ana Paula Gomes, a mother of three who also works as a primary school teacher.

While subsistence farmers would like to invest in the agricultural sector, getting seed capital for their projects is difficult. Banks provide few loans to farmers and where they do,  they prefer to give loans to people in formal employment.

While the government is always calling for investment in agriculture, its failure to prioritize the sector keeps it was allocated $3.8bn, representing 12% of spending. In comparison, public education was allocated 19%.

The government has introduced a district development fund with the aim of expanding the agriculture sector, but the distribution of loans seems to favor political allegiance, benefiting supporters of the ruling party.

« I tried to apply for the loan to start a pig-farming project but the question that comes up from the fund managers is that of my political affiliation, » says Filimone Candeado, a member of the opposition party Renamo.

Pockets of subsistence farmers who manage to get seed capital have started projects, but most of them are small. What is needed is large-scale investment that will not only create jobs but also ensure that production levels are maintained.

Biofuel crops have gained in popularity, with jatropha topping the list, but few companies have yet harvested a crop. Sun Biofuels Mozambique, a subsidiary of UK-based Sun Biofuels Ltd, operates in Chimoio town where it employs 1,200 people. The company intends to increase its jatropha plantations more than five-fold in the next five years, from 2,000ha to 11,000 ha, according to its business development manager Sergio Gouveia.

Sun Biofuels Mozambique has invested $5m since it began operations in 2008. Gouveia said the company has harvested its first crop of five tons from one hectare and it intends to sell pressed oil to the state-run petroleum utility. Meanwhile, agriculture minister Salvador Namburete says: « We are going to boost local consumption of biofuels by insisting on a required blending of 10% ethanol in ail Mozambican fuel by end 2012, and 3% biodiesel in diesel in the same timeframe. »

Increased agricultural production is expected to boost the country’s exports, which the government thinks will help maintain Mozambique’s economic growth at 7.2% in 2011. According to estimates in this year’s Economic and Social Plan, exports will increase to $2.4bn in 2011, an increase of 15% on 2010 figures.

Mozambique’s agricultural exports also include cotton, tobacco, pineapples and cashew nuts.

Fred Katerere

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