Market development and trade

Rationale: Efficient agricultural markets and trade can encourage agriculture-led economic growth and food security in Sub Saharan Africa. However, efforts to move toward a market-oriented economy are hampered by ineffective policies, weak institutions, and inadequate infrastructure in most SSA countries including Zambia.  Zambia has the potential to become the bread basket of southern Africa. This is because of the country’s abundant sub-surface water, large tracts of cultivable farmland and proximity to large neighboring deficit food markets (Chapoto et al., 2010). Agricultural markets remain challenged by numerous factors such as high transaction costs, poor state of infrastructure leading to thin or missing markets, inadequate access to finance, high risks among others. As a result, most farmers are net buyers of food and do not adequately participate in markets (Mason, Jayne & Meyer, 2012).  Nevertheless, the rapid population increase, the rapid rate of urbanization and the rising incomes present massive opportunities for Zambia’s agriculture in terms of rising demand for food and changing food consumption patterns. With these changing dynamics, the prospects for smallholder farmers to earn better incomes from increased participation in domestic markets and regional trade are high.    

Several opportunities exist in other sectors other than maize such as oilseeds -soya beans, sunflower and groundnuts, cash crops- cotton, horticultural products and livestock.  However, maize-centric policies have led most farmers to allocate more land to maize. Large investments by private companies such as Cargill, NWK, Mt. Meru, and Zambeef offer opportunities for development of more commodity sectors under alternative co-ordination mechanisms such as contract farming (Chamberlin, 2014). These opportunities remain underexplored.

Research Priorities:  IAPRI under this thematic area will conduct studies aimed at providing the policy makers empirical evidence to address the persistence challenges in agricultural marketing and trade for Zambia’s four key commodity value chains:  maize, horticulture, cotton and livestock.