Fixing the Payment System: How to Get the E-Voucher Right

Lusaka, March 20, 2019

Over the last month, politicians, farmers and traders have been dissecting the effectiveness of the e-FISP following governments announcement of the 60-40 scale back. On 6 February, the Consumer Unity Trust Society (CUTS) brought together key stakeholders in the agriculture sector to analyse the implementation of the e-FISP in the 2018/2019 farming season. The meeting found that the e-voucher remained overwhelmingly positive with the agro-dealers, fertiliser companies and more especially the farmers, who are empowered with choice over inputs, and was creating much-needed off-farm jobs in the private sector. However, it was highlighted that one of the key factors hindering its success was government arrears to agro-dealers which delayed the delivery of inputs to farmers. At the meeting, a broad coalition of farmers, agro-dealers, suppliers, civil society and think tanks emphasised their commitment to the e-voucher, applauded government progress on farmer registration through ZIAMIS and identified a clear fix for next year’s rollout – the immediate payment of agro-dealers.

CUTS has long advocated that a key benefit of the e-FISP is the increased farmer input choice, bringing diversification to reality. The ability to choose which inputs to access and which traders to purchase from is a key component of the e-voucher. Farmers themselves at the convening confirmed this: a smallholder farmer in Chongwe explained how the choice over inputs had allowed her to diversify her smallholding with poultry and livestock, which has allowed her to sell produce all year round and increase her income. The e-FISP delivers on the commitment to support growth in the 7NDP by empowering farmers with choice, enabling them to improve their incomes and graduate from the programme, a long-elusive goal of the traditional FISP, under which poverty has remained stagnant.

The e-FISP crowds-in the private sector by utilising agro-dealers to provide, store and transport inputs to beneficiaries which has provided a ‘win-win’ by creating jobs and reducing government expenditure at a time of austerity. At the CUTS event, agro-dealers highlighted the jobs created in districts under the e-FISP, confirming IAPRI estimate that 3000 jobs were created in agro-dealerships alone in the 2017-18 season – as well as the jobs lost in districts which reverted to the Direct Input Supply (DIS) system this year. The e-FISP enables government with two key factors – the creation of jobs and reducing government expenditure.

Agro-dealers are essential to the e-FISP, but there was a problem this year with late payments by government, which hindered the overall success of the programme. Under this years system, agro-dealers are paid directly by government for providing farmers with their inputs. However, delays meant that agro-dealers suffered from cash flow issues, leaving them unable to provide farmers with their inputs on time and, in some cases, forcing them to close. Using agro-dealers provides farmers with a genuine choice as only private sector can provide the range of inputs to suit individual and regional demand. The sector is ready to provide competitive and timely inputs to suit farmer needs but government arrears have held back the market. Therefore, for the e-FISP to fulfil its promise of empowering farmers, creating jobs and reducing expenditure, government must commit to paying agro-dealers on time and consider options for developing a real-time payment platform as part of ZIAMIS.

The e-FISP can work – and key area of focus is in achieving success is in ensuring timely payment to the agro-dealers. The e-FISP has proven to be more efficient that the traditional system in improving smallholder farmers’ incomes, diversifying the agricultural sector, creating jobs and reducing government expenditure. An autumn 2018 survey conducted by IPSOS found that this sentiment is shared is shared by MPs, 80% of whom believe that the e-voucher is the right policy for Zambia but needs to implemented properly. Following successful scale-up of ZIAMIS this season, which saw 99.9% of farmers depositing on the scheme, the central implementation challenge is the timely payment of agro-dealers. Considering that consultations by government on the review of the implementation of the e-voucher in the 2018/19 farming season will begin soon, CUTS and other key stakeholders across the sector are calling on GRZ to address this critical issue to ensure that the e-voucher is the success that Zambia deserves.

For more information contact:

Ms Chenai Mukumba, Centre Coordinator, Consumer Unity and Trust Society (CUTS) at or 0978055293

Mr Ishmael Zulu, Policy Analyst, Consumer Unity and Trust Society (CUTS) at or +260 97 77979981

Njavwa W. Simukoko,  CUTS Communications Officer at or +260964905611