Files
Abstract
The debate on fertilizer reform process in Zambia has two contrasting views. Some stakeholders
continue to be convinced that the private sector is unable to adequately serve the needs of
smallholder farmers, especially in the more remote parts of the country. Only 20 per cent of
smallholder farmers used fertilizer in 1999/00. There are serious concerns over private traders’
willingness to deliver inputs on credit for low-resource farmers. According to this view,
government fertilizer and credit distribution are indispensable for promoting smallholder
agricultural productivity growth.
Others believe that the fertilizer market should be restructured even more fully to remove the
constraints on the private sector and reduce the drain on the public treasury. This latter line of
argument is based on the premise that the continuation of government programs, while intended to
meet the needs of remote and poor smallholder farmers, may actually undermine the market for
private traders more generally and weaken the prospects for building a vibrant market-oriented
fertilizer distribution system. Proponents of this view also contend that the private sector can
indeed meet the needs of poor smallholder farmers in remote areas if the policy environment is
conducive and if adequate investments in infrastructure are made to support a market economy.
This study was identified by the Advisory Board of the Food Security Research Project, composed
of government and private sector stakeholders in Zambia’s agricultural sector. The objectives of
the study were to describe how the fertilizer industry has developed under the process of
liberalization, to examine the effects of liberalization, to identify feasible opportunities to reduce
farm-gate fertilizer prices and increase smallholder farmers’ access to fertilizer. Particular
attention was given to the impact of government programs on the objective of increasing the private
sector’s capacity and incentives to distribute fertilizer, and policy options for increasing fertilizer
use in areas where it is profitable and contributes to agricultural productivity.
This summary provides the main results of the study and recommendations for consideration by
government. First, the general trends in the importation of fertilizer into Zambia and the
contributions of different players are shown. This is followed by a presentation of the alternative
marketing channels prevalent in Zambia during 1999/2000 and their respective market shares and
other characteristics. Thirdly, key suggestions on how to reduce the price farmers pay for fertilizer
are presented. Finally, the recommendations emanating from these findings are provided.