Improved food security anticipated in 2021

BATANAI MATSIKA

The Famine Early Warning System Network (Fewsnet) recently published a Food Security Outlook Report for Zimbabwe indicating that the above average 2021 harvest will significantly improve food access in most parts of the country. 

We highlight that Zimbabwe has had to import maize in recent years to meet its food requirements. According to the Zimbabwe Revenue Authority, about 530,000MT of maize for human consumption was imported between April and December 2020. The above-average harvest therefore works to reduce the import bill in the outlook period. Some of the highlights of the report are as follows;

• As of mid-February 2020, some areas had almost doubled their average seasonal totals with nearly one and half months left in the season. Further, the season has been among the wettest on record across much of southern and eastern Zimbabwe;

• Favourable rainfall resulted in above-average area planted for most staple food crops and some cash crops. Many households engaged in the government’s Conservation Agriculture (CA) initiative (Pfumvudza/Intwasa) under the Presidential Input Scheme. The CA initiative provided mainly seed and fertilizers to farmers that had prepared conservation agriculture plots;

• Normal to above-average rainfall has improved the availability of water for domestic, livestock, and other uses. Most streams and rivers are in flow, with deep wells and boreholes having abundant supplies of water. More than half of the national dams are spilling over. The Zimbabwe National Water Authority reports that as of February 15, the average national dam level was 89% which reflects a 50% improvement from October 2020 and making it the second-highest average dam level in more than 50 years;

• Cotton and tobacco harvests are also expected to be above average. Depending on sales conditions on the markets, cash crop sales are expected to improve direct and indirect incomes for farming households and others in respective producing areas across the country; and

• Pasture availability is well above normal and significantly better than the same time last year.

Fewnet has however warned that some areas in the southern region would still experience hunger due to the incessant rains. Persistent heavy rainfall has also negatively impacted crops in some southern, eastern, and central areas where heavy leaching, waterlogging, and weed pressure amidst fertilizer shortages will likely somewhat reduce yields. 

In addition, most people were still vulnerable as macroeconomic conditions remain poor (triple digit inflation, deteriorating exchange rate and fuel price increases). That said, Morgan & Co Research maintains a view that the agricultural sector in Zimbabwe remains strategic. Rapid population growth and increased economic prosperity in the future is set to create substantial demand for food. 

In Sub Saharan Africa, a major constraint is that total food production (primary crops and meat) has been growing but at a very slow rate of less than 1.0% per year. This is rather alarming because the food production growth rate is not statistically different from the population growth rate. There is there an opportunity for a country like Zimbabwe to increase its food production output given that these dynamics can translate to an uptick in the demand for its agricultural produce. 

Agricultural businesses that provide key inputs into the food production chain are well positioned to take advantage of this growth. Fertilisers, water supplies, and hybrid seeds will also be critical in boosting yields farmlands.  Seed Co International develops and markets certified crop seeds, mainly hybrid maize seed as well as wheat, soya bean, barley, sorghum, groundnut, and vegetable seeds and is set to benefit from the strong national focus on agriculture.  

While the business may likely face headwinds in Zimbabwe (macro environment and product pricing constraints), prospects in regional markets remain very strong. We view Seed Co International as a vehicle of gaining exposure in the food demand growth story in Sub Saharan Africa. BUY

Batanai Matsika is the Head of Research at Morgan & Co, and Founder of piggybankadvisor.com. He can be reached on +263 78 358 4745 or               batanai@morganzim.com / batanai@piggybankadvisor.com

Related Articles

0 0 votes
Article Rating
Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments
Back to top button
Business Times
0
Would love your thoughts, please comment.x
()
x