Economic Partnership Agreement and the Farming Sector

By Simon Ng’ona

Agriculture is important because civilization began with it. When our nomadic ancestors began to settle and grow their own food, human society was forever changed. Not only did villages, towns and cities begin to flourish, but so did knowledge, the arts and the technological sciences.

And for most of history, society’s connection to the land was intimate. Human communities, no matter how sophisticated, could not ignore the importance of agriculture. To be far from dependable sources of food was to risk malnutrition and starvation.

In modern times, however, many in the urban world have forgotten this fundamental connection. Insulated by the apparent abundance of food that has come from new technologies for the growing, transportation and storage of food, humanity’s fundamental dependence on agriculture is often overlooked. Further even the process of liberalisation has also taken away the natural dream of people being engaged into agriculture evident from how Least Developing Countries have been affected after the structural Adjustment Programme.

Most LDCs have lost the touch of agriculture and recently a recently, a scholarly survey was conducted in Zambia to investigate the impact of liberalisation. Results review that this development has had negative effects evident in the responses gathered from rural communities and various institutions in the country. Communities visited argued that trade liberalization was leading to a distortion of marketing systems and reducing productivity, as they were unable to compete with imported products. Most rural people complained of high poverty levels after liberalization in the process of the implementation of Structural Adjustment Programs since 1991.

Most communities also bemoaned the pace at which liberalization was taking place as it was too fast and there was no adequate preparation for the change. In the rural areas of Zambia where 90% of the people are small scale farmers, the situation led to the deterioration of markets in the agricultural sector, and the markets in turn have influenced production. There has been a shift to commercial crops such as cotton in the rural communities. This is due to guaranteed markets and input supplies provided by intermediary companies. The decision to go into cash crop production is thus not so much determined by the price but rather related to market and input security.

The marketing of farm crops has also become a problem as most rural areas are inaccessible. This has made transportation costs incredibly high because government has more or less stopped grading the rural roads and rural public transport has become more infrequent.

The farmers in most communities also complain of the growing cost of inputs. They argue that it has been rising faster than product prices. There is a perception that the availability of farming inputs has not increased, particularly for remote communities, e.g. fertilizer is no longer provided by state marketing agencies or the cooperatives. The rural communities argue that their production levels for maize have fallen as a result of liberalisation.

“We were taken unaware by the liberalization and have become worse off than before 1990. As a result of the liberalization we have had a situation where the big buyers have monopolized and are dictating the prices of agricultural products. We, under the circumstances, have been left with no bargaining power, “said Alibate Mbewe a farmer in northern province.

“Due to liberalization, the market for maize has become extremely difficult. We have to travel all the way to town for the maize to be sold. Due to transport problems, we use bicycles to transport our products. If the load is heavier, we face added costs of booking a vehicle,” added another farmer Matambose Mbewe from a focus group in the same province.

“Because of liberalization, co-operatives that were helping us went under. The government decided that they were not useful. Co-operatives used to offer good prices to us and purchased crops at the doorsteps. They were also able to deliver inputs to us,” said

Christina Tembo another farmer.

Most agricultural and industrial inputs are imported. This means that local prices are also affected by the exchange rate, which has depreciated steadily as a result of liberalization. The case of maize is a slightly different example to the other crops because producer prices have not been totally deregulated over the period.

Meanwhile, Consumer Unity and Trust Society (CUTS) and Civil Society Trade Network and other non governmental organisations have condemned the Zambian government for signing an agreement on market access before rectifying all the contentious issues in the interim agreement.

The CSOs believe that Zambia has no infrastructure and capacity to compete on the Economic Partnership Agreement (EPA) with the European Union.

They said country is not yet ready to open its market to all the goods coming from Europe because of infrastructure deficiency.

“If we open our further markets now by signing the EPA, which is still under negotiations, we will definitely not be able to compete because the prices of our products will be too high, compared to their own goods, “said CSOs. “We need time to make Zambia to be more competitive by putting sound infrastructure in place.

The CSOs said the government should not have rushed to offer market access. “We have supported it for not signing the interim agreement because we felt that the agreement in its current state gave more opportunities to European countries to excel than Developing Countries,” said CSOs.

“We have worked well in the past with the government. The government pledged to take decisive measures and views from all stack holders in formulating the Sensitive list Product so that all important products are incorporated in it. But is unfortunate that the list has been kept secrete and all the changes that have been made to the document no one knows. We understand the pressure government is going through in terms of trimming the list to suit the vague interpretation of substantiality all trade. Opening 83% of the economy to the EU is re-inventing the developmental success we as a country have achieved in the past years and will have negative effects on sensitive sectors like agriculture sector,” they said.

“Further though most developing countries received preferential market access from developed countries in the past, the lives of the poor did not improve but saw an increase in poverty. Productivity went down, access to social services such as education, health and farming deteriorated, and the availability of food declined, “CSOs added.

“Similar effects have been experienced in other Free trade Areas and the expected gains in jobs did not materialise, neither did it prevent real wages from declining and income inequality from rising, the CSOs said.

Therefore we edge the government to fall into prey and continue negotiating the Trade in Services, Competition policy, Government procurement Trade Facilitation, among other others as these issues have not yet been resolved at World Organisation Level. Further there should be full involvement from the private sector and other CSOs in the on going EPA negotiations, to prevent the government from taking political decision on the issue, rather than economic decision, “they said.

Agriculture as important from ancient times should be without any reservations considered as on of the key factors to human life. Killing this sector means forgoing the principles attached which compel life to forever change and enhance. Even in our modern times we should understand the repercussion of killing this sector. Therefore these trade agreements should be compressed in a manner that will benefit both countries.