Washington, May 16: The World Bank Board of Executive Directors Tuesday approved an International Development Association (IDA) grant of 37,2 million US dollar to support agricultural development in Zambia.
The Agricultural Development Support Project aims to increase the commercialization of smallholder agriculture (småbøndernes jordbrug) by promoting the development of a network of well-functioning and competitive value chains.
It will provide resources for
– (i) working capital and term lending for investments in agricultural production and marketing,
– (ii) develop innovative business linkages between smallholders and other actors in the target supply chains, and
– (iii) target investments in public goods (for example, improving rural roads) and in key public sector functions.
The project will also improve smallholders access to markets and the competitiveness of their agricultural commodities.
– The Government of Zambia has recognized the importance of smallholder agriculture and is committed to supporting their development, said Tijan Sallah and Paavo Eliste, the World Bank Task Team Leaders of the project, adding:
– This project will help improve agricultural export competitiveness, build capacity of smallholder farmers and, improve their linkages to medium and large scale enterprises so that they are better able to participate in the countrys economy. It will also contribute to the strategic priorities of the Africa Action Plan.
The first component of the project, Support to Farmers and Agribusiness Enterprises, will provide improved access to working capital and term financing for agribusinesses, farmer associations, marketing organizations and other entities that are instrumental to creating markets for smallholders through contract farming arrangements.
It will also address the equity aspects of agricultural commercialization by lowering the barriers of entry for including smallholders into agricultural value chains through demand driven matching grant facility. This component will provide for the rehabilitation and maintenance of a network of selected rural roads of economic importance in high agricultural potential areas.
The second component, Institutional Development, will improve the public sectors capacity to provide core public services required to enhance smallholders access to the market as well as improve their productivity and quality of produce.
There are important opportunities for increasing agricultural exports from smallholder production systems and strengthening inter-industry linkages in agriculture. Significant support is needed to improve the efficiency of existing and new outgrower and contract farming operations and their export competitiveness.
The proposed Agricultural Development Support Project aims to enhance competitiveness of smallholder agriculture in terms of supply reliability of major export and domestic commodities through channeling funds for productive investments and capacity building for smallholders directly through industry associations, agribusinesses and farmer organizations.
Agriculture and agro-processing account for more than 40 percent of Zambias GDP and contribute about 12 percent of export earnings. Zambia has 42 million hectares of arable land (about 55 percent of total land area), of which only 1,5 million hectares (about 4 percent) is cultivated every year.
Smallholder agriculture is of critical importance to the country since four-fifths of the cultivated area is in the hands of some 800.000 smallholders.
More information on the World Banks work in Zambia on
www.worldbank.org/afr/zm
