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Agricultural PJ -A f~ "/ d- "-)" ( ~~'" q,/9~ AGRICULTURAL POL;CY ANALYSIS PROJECT, PHASE II Under contract to the Agency for Intemational Development, Bureau for Research and Development, vI/ice of Agriculture Project OffIce Hampden Square, 4800 Montgomery Lane, Suite 600, Bethesda, MD 20814 • Telephone: (301) 913-0500 Telex: 312636 • Fax: (301) 652-3839 IMPROVING THE EFFECTIVENESS OF AGRICULTURAL POLICY REFORM IN AFRICA: THE CASE OF ZAMBIA I September 1993 APAPll Collaborative Research Report No. 359 Prepared for Agricultural Policy Analysis Project, Phase II (APAP II) and USAID/AFRIARTSIFARA A.I.D. Contract Nos. DAN-4084-Z·11·8034-00 and LAG-4084·C-QO·2044 Authors:. William T. Levine, AbtAssociates Inc. Charles J. D. Stathacos, Abt ASsociates Inc. Prime Contractor: Abt Auoci~ Inc., 55 Wheeler Street. Cambridge. MA 02138. (617) 492·7100 Subcontractors: Harv.rd Inltltute tor Int8m8tJoft81 Development, Harvard University, One Eliot Street, Cambridge. MA 02138 • (617) 495·9779 Food ......rch Inl'HUIe, Stanford University, Stanford, OA 94305·6084· (415) 723·0693 North C8ro1'ft8 S.... Un'VIrIlty, Department of Economics and Business, Box 7845, Raleigh, NC 27695·~645. (919) 515·3107 Abel, Daft. ElrIey, 1410 King Street, Alexandria, VA 22314· (703) 739·9090 'nl8mltlo....ScIence and Technology InItHute, 1129 20th Street. NW, Suite 800, Washington, 0.0.20036 • (202) 785·0831 , l ZAMBIA ,;• TANZANIA ;• :l.ambCen batder \, PnM1cI8I bomdaIy '\ InI8ma1on11 bcxnf8ty .. • • ClIy "'I .:I \ ZAIRE t, -''.,.... .....' ... -.' ANGOLA NORTHWESTERN :,.-' ...... ., • "1-_"--: .... "., ',... - w·' ~. '\, i • Mongu I , ~ MOZAMBIQUE ,. ,, WESTERN L_._~_~ ., ~~ , , -, ; SOUTHERN ~-.', , ... ~­, ".-. ". ZIMBABWE , J .I I ,, \- I ~ " ~ , - _.- -- NAMIBIA ..... , .- -. ..,--- -,- "".-' ~.' \ -, o 100 200 -- .... ---;. _.- -.. ., .. •; KiamII.... , r- - _.- - 1./ BOTSWANA \'. .' ;' TABLE OF CONTENTS ACRONYMS It ••••••••••••••••••••••••••••••••••••• •• 11 ACKNOWLEDGEMENTS ' iii 1. INTRODUCTION. .......................................... .. 1 1.1 The Analytical Framework Employed in this Study ................ .. 2 2. FROM INDEPENDENCE TO REFORM: THE POLITICAL AND ECONOMIC CONTEXT . .. 6 2.1 The Political Context of Maize Reform: 1964-1985 ................ .. 7 2.1.1 Policy Origins: The Colonial Legacy 7 2.1.2 Independence and Mter: The Foundation of the One Party State ,........... 8 2.2 The Context of Economic Policy: 1964-1985 10 2.2.1 Macroeconomic Policy ......•...•............... .".. .. 10 2.2.2 Agricultural Sector Policy ............................ .. 11 3. POLITICAL ACTORS IN ZAMBIA 12 3.1 Coalitions and Mass Political Pressure ........................ .. 12 3.2 Donor-Government Relations ................•............... 15 3.3 Political Elites ......................................... .. 17 3.4 Bureaucratic Interaction ........•.•............. .. 19 4. MAIZE MARKETING REFORM 25 4.1 Economic Crisis and Rationale for the Agricultural Reform Program ... .. 25 4.2 Agricultural Reform in Zambia 1985-1993 .• ................... .. 25 4.2.1 The 1985 IMF Structural Adjustment Program .............. .. 26 4.2.2 The UNIP Response to the December Riots 28 4.2.3 The Rise and Fall of the New Economic Reform Program (NERP). 1987·1990 29 4.2.4 1991 Victory of the MMD Party and Political Support for Maize Marketing Reforms ............•................... .. 31 4.3 The Political Economy of Agricultural Sector Reform Implementation ... 32 ~ 4.3.1 Coalitions and Mass Political Pressure for Maize Marketing Reforms. ....................................... .. 33 4.3.2 Donor-Government Relations in Implementing Maize Marketing Reforms ................................ .. 3S 4.3.3 Political Elite.s .................................... .. 36 4.3.4 Bureaucratic Interaction: The 1993 Maize Marketing Season •.•••• ·37 5. CONCLUSIONS AND RECOMMENDATIONS 41 REFERENCES ATTACHMENTS I". LIST OF ACRONYMS AFR/ARTS/FARA Bureau for Africa/Office of Analysis, Research, and Technical Support/Division of Food, Agriculture, and Resources Analysis BOZ Bank of Zambia ANC African National Congress CIDA Canadian International Development Agency CUSA Cooperative Union Savings Association DCU District Cooperative Unions GNP Gross National Product GRZ Government of the Rep,ublic of Zanlbia IDA International Development Association IMF International Monetary Fund MAFF Ministry of Agriculture Food and Fiaheries MMD _ Movement for Multi-party Democracy MMDP Maize Market Decontrol Program NAMBOARD National Agricultural Marketing Board NCDP National Commission for Development Planning NCZ Nitrogen Chemicals of Zambia NERP New Economic Reform Program NFUfZNFU Zambia National Fanners Unions PCU Provincial Cooperative Unions REDSO/ESA Regional Economic Support OfficelEast & Southern Africa SPCMU Southern Province CooJi<:rative Marketing Union USAID U.S. Agency for International Development UNIP United National Independence Party UPP United People's Party ZAMS Zambia Agribusiness and Management Support ZAMSEED Zambia Seed Company ZATPID Zambia Agricultural Training, Planning, and Insti~utional Development Project ZCF Zambia C~operative Federation ZCCM Zambia Consolidated Copper Mines ZIMCO Zambia Industry and Mining Corporation ZR Zambia Railways, Ltd. ZTCU Zambian Conference of Trade Unions ACKNOWLEDGEMENTS The authors gratefully acknowledge the support and assistance offered by USAIDlLusaka in undertaking this study. Particular thanks are due to Dr. Fred Winch, Mission Director, Dr. Will Whelan, Agricultural Officer, Dr. James Polhemus, Democracy and Governance Officer, Ms. Betty Wilkinson, Private Enterptise Specialist, and Ms. Tu-Hue Mahan, Administrative Assistant. Special thanks are also due to Dr. DavidMartella, REDSO/ESA Evaluation Office.i, and Dr. James McKenzie, Ministry of Agriculture, Food and Fisheries. Two additional notes of thanks are due to Drs. David Schroder, R&D/AGR/APP APAP n Project Officer, and George Gardner AFR/ARTS/FARA, for their constant support and encouragement throughout the preparatory stages of the study. Finally, the authors would like to thank Dr. Catherine Rielly and Mr. Nick Kulibaba of Abt Associates for their comments and editorial assistance. The fmdings and conclusions are the sole responsibility of the authors. • CHAPTER 1 INTRODUCTION Agricultural policy in Zambia, from independence in 1964 until 1985, focused upon implementing the sectoral dictates of a command economy whose characteristics included state control of marketing, price policy, and high producer and consumer subsidies. This resulted in a manifestly unsustainable economic system requiring dramatic remedial action within the nation's agricultural sector. Since 1985, agricultural policy refonn effmts have reflected the nation's policy reform experience as a whole, careening between an interventionist orientation and a professed commitment to liberalization. This study seeks to chart the course of these reform efforts as they apply to Zambia's single most important staple, maize. The study uses a political eCJnomy approach developed as part of an effort sponsored by A.I.D./AFRIARTSIFARA, entitled, "Improving the Effectiveness of Policy Reform in Africa." As such, it employs a matrix that examines maize pricing, marketing and input marketing refonn, in seeking to determine the role of coalitions and mass political pressure, donor-government interactions, the role of political elites: and the bureaucracy as they affect the sequencing of refonns. Fo.t' purposes of analysis, the agricultural policy refonn process is sequenced within this matrix (see, Figure 1.0) into three phases: initiation/adoption, implementation, and sustainability. The authors also integrate an accounting of one particular USAID/Zambia assistance effort into this study-the Maize Market Decontrol (611-0229) Program (MMDP) (as amended, September 30, 1992): USAID assumed donor leadership in the agricultural policy sector in 1991, and a knowledge of MMDP is central to any understanding of the dynamics of the maize market reform process within the last five years. This study begins with a brief presentation of the framework which undergirds this and companion studies. This is followed by an historical overview of the political, macroeconomic and agriculture sectJral context of Zambia up to 1985. It next provides a description of those politically relevant actors who have been central to agricultural policy reform. The study then addresses the reforms introduced as central to zambia's agricultural liberalization efforts-maize pricing, marketing and input marketing refonn-from 1985 to the present. It concludes with some observations regarding the major political interactions that drive the reform program, successful and unsuccessful elements ofzambia's maize marketing reform efforts, and the impact of political change upon reform. I An earlier USAID effort. the Zambia Agricultural Policy Training, Planning and Institutional Development (ZATPID), in 1990, prepared adocument, Evaluation of the Perfonnance oflambia's Maize Subsector, which laid much of the conceptual groundwork. for subsequent liberalization efforts. 1.1 The Analytical Framework Employed in this Study This study of the political economy of agricultural policy reform in zambia is part of a larger undertaking supp·orted by A.I.D.'s Africa Bureau (AFRIARTS/FARA). As pan of a comparative study of agricultural structural adjusunent reforms, it seeks to provide Missions and government analysts coping with agricultural reform, and/or designing projects and programs to undertake such reforms,
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