Profile of Zambia’s Smallholders: Where and Who are the Potential Beneficiaries of Agricultural Commercialization? Africa Region Working Paper Series No. 113 June 2008 Abstract Understanding the heterogeneity of Zambia’s rural households and their dif ferent potential as agricultural producers is critical to designing strategies for commercially viable smallholders. The objective of this paper is to help contribute to efforts to identify who and where are the Zambian smallholders that have the highest potential to benefit from agricultural commercialization, and to identify other groups of rural households that require alternative strategies for poverty reduction. This paper draws on the existing literature (both quantitative and qualitative analyses) to try and classify higher and lower potential households. It seems that many rural households can not be expected to directly benefit from agricultural commercialization and will require safety nets. Other smallholders might be able to achieve food security and more diversified incomes over time. Even smallholders with potential to be more market-oriented will require significant assistance to make the transformation into commercial farmers. This paper should be viewed as the beginning of a process to better identify the potential of different households to help policymakers design differentiated policies and investment strategies that can be targeted based on these differences Authors’ Affiliation and Sponsorship Paul B. Siegel, Consultant, The World Bank. [email protected]. [email protected]The Africa Region Working Paper Series expedites dissemination of applied research and policy studies with potential for improving economic performance and social conditions in Sub-Saharan Africa. The Series publishes papers at preliminary stages to stimulate timely discussion within the Region and among client countries, donors, and the policy research community. The editorial board for the Series consists of representatives from professional families appointed by the Region’s Sector Directors. For additional information, please contact Paula White, managing editor of the series, (81131), Email: [email protected]or visit the Web site: http://www.worldbank.org/afr/wps/index.htm . The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s), they do not necessarily represent the views of the World Bank Group, its Executive Directors, or the countries they represent and should not be attributed to them. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
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Profile of Zambia’s Smallholders: Where and Who are the
Potential Beneficiaries of Agricultural Commercialization? Africa Region Working Paper Series No. 113
June 2008
Abstract
Understanding the heterogeneity of Zambia’s rural households and their different potential as agricultural producers is critical to designing strategies for commercially viable smallholders. The objective of this paper is to help contribute to efforts to identify who and where are the Zambian smallholders that have the highest potential to benefit from agricultural commercialization, and to identify other groups of rural households that require alternative strategies for poverty reduction. This paper draws on the existing literature (both quantitative and qualitative analyses) to try and classify higher and lower potential households. It seems that many rural households can not be expected to directly benefit from agricultural commercialization and will require safety nets. Other smallholders might be able to achieve food security and more diversified incomes over time. Even smallholders with potential to be more market-oriented will require significant assistance to make the transformation into commercial farmers. This paper should be viewed as the beginning of a process to better identify the potential of different households to help policymakers design differentiated policies and investment strategies that can be targeted based on these differences
The Africa Region Working Paper Series expedites dissemination of applied research and policy studies with potential for improving economic performance and social conditions in Sub-Saharan Africa. The Series publishes papers at preliminary stages to stimulate timely discussion within the Region and among client countries, donors, and the policy research community. The editorial board for the Series consists of representatives from professional families appointed by the Region’s Sector Directors. For additional information, please contact Paula White, managing editor of the series, (81131), Email: [email protected] or visit the Web site: http://www.worldbank.org/afr/wps/index.htm.
The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s), they do not necessarily represent the views of the World Bank Group, its Executive Directors, or the countries they represent and
Profile of Zambia’s Smallholders: Where and Who are the Potential Beneficiaries of
Agricultural Commercialization?
Paul B. Siegel *
June 2008
(*) This paper was originally prepared as a background document for the Zambia Smallholder Agricultural Commercialization Strategy (SACS) for Environment, Rural, and Social Development Unit, AFTS1, Africa Region, The World Bank, Washington, DC, USA
ACKNOWLEDGEMENTS
TThis paper was originally prepared as a background document for the Zambia Smallholder
Agricultural Commercialization Strategy (SACS). See: World Bank (2007) ―Zambia Smallholder
Agricultural Commercialization Strategy.‖ Report No. 36573-ZM. Washington, D.C. January 9,
2007. Guidance for the paper was provided by Alex Mwanakasale (AFTS1), Agricultural Officer
based in Lusaka, Zambia and. Paavo Eliste (AFTS1) served as Task Team Leader (TTL) for the
Zambia SACS and provided valuable suggestions and support for publication of this paper. Any
errors are solely the responsibility of the author, as are any opinions. More information on the
Zambia SACS can be received from Paavo Eliste, who can be contacted at
I. SPATIAL OVERVIEW .................................................................................................... 9
I.A. Characteristics of Zambia’s Agro-Ecological Zones ..................................................... 9 I.B. Road/Rail Infrastructure and Population Centers ........................................................ 12 I.C. Distribution of Smallholder Households ...................................................................... 13 I.D. National Livelihood Zone Map .................................................................................... 13 I.E. Stylized Classification of High/Low Potential Areas and Rural Households .............. 16
II. PROFILE OF RURAL POVERTY ............................................................................... 18
II.A. Quantitative Poverty Profile – based on World Bank (2007) ...................................... 18 II.B. Qualtitative Poverty Profile – based on Parker and Mwape (2005) ............................. 25 II.C. Participatory Assessment: Kefa Village – based on Skonsburg (2003) ....................... 31 II.D. Smallholder Model – based on Siegel and Alwang (2005) ......................................... 32 II.E. Classification of Rural Households – based on Pinder and Wood (2003) ................... 34 II.F. Hard to Measure Factors: Culture and Attitudes.......................................................... 35 II.G. Summary of Key Points on Profile of Rural Poverty ................................................... 36 II.H. Where and Who are the Potential Beneficiaries of Agricultural Commercialization? 37
III. POTENTIAL FOR SMALLHOLDERS MOVING INTO HIGHER VALUE.......... 39
III.A. Higher Value Agricultural Activities ........................................................................... 39 III.B Conservation Farming .................................................................................................. 41 III.C. General Observations ................................................................................................... 41
IV. IDENTIFYING POTENTIAL BENEFICIARIES FROM AGRICULTURAL
COMMERCIALIZATION IN ZAMBIA ...................................................................... 43
V. CONCLUDING COMMENTS ...................................................................................... 46
Map 1 Agro-Ecological Zones of Zambia ................................................................................... 10 Map 2 See http://www.fews.net/livelihoods/files/zm/profiling.pdf (page 5) Or see
Table I. 1 Major Agro-Ecological Zones of Zambia and Agricultural Potential ..................... 11
Table I.2 Zambia’s Major Cities and Urban Areas ................................................................. 12
Table I.3 Distribution of Smallholder Households by Province and Agro-ecological Zone ............................. 13
5
Table I. 4 Population by Livelihood Zone ............................................................................... 15
Table I. 5 Typology of Agricultural Producers in Zambia ....................................................... 16
Table I. 6 Typology of Agricultural Producers in Zambia: From the PRSP ............................ 16
Table I. 7 Stylized Classification of High/Low Potential Areas and Households ................... 17
Table II. 1 Headcount Poverty Estimates, 2002-2003 LCMS ................................................... 19
Table II. 2 Headcount Poverty Estimates Rural/Urban, and Province, ..................................... 20 Table II. 3 Self-Assessed Poverty Status of Zambians, 2002-2003 LCMS............................... 20 Table II. 4 Demographic Characteristics of Rural Households, by Consumption Quintile ...... 21 Table II. 5 Principal Economic Activity of Rural Household Heads, ....................................... 23 Table II. 6 Mean Shares of Income by Source for Rural Households, ...................................... 23 Table II. 7 Mean Area of Crop Land Used for Food and Non-Food Crops, by Household ...... 24 Table II. 8 Crop Production Patterns and Livestock Ownership of Rural Households, ............ 24 Table II. 9 Livestock Ownership: Rural Households, by Province: .......................................... 25 Table II.10 Key Characteristics of 3 Wealth Categories by Agro-Ecological Zone .................. 27 Table II. 11 Stylized Classification of High/Low Potential Areas and Households ................... 38 Table II. 12 Smallholder Households Classified by Agro-Ecological/Livelihood Zone ............. 38 Table IV. 1 Potential Winners and Losers from GRZ’s Agricultural Commercial. Policies ...... 43
6
EXECUTIVE SUMMARY
here is optimism that a dynamic agricultural sector in Zambia can lead to diversified
production and exports, increased employment and income, and improved food security. The
overwhelming majority of Zambia’s agricultural producers are asset-poor smallholders who use
simple technologies and cultivation practices. However, it is important to recognize that Zambian
smallholders are not a homogeneous and monolithic group, and that being a rural resident is not
synonymous with being a smallholder. Thus, not all rural households who produce some crops
and livestock should be considered ―smallholder farmers‖ when examining potential of the
agricultural sector. There are distinct differences in smallholder households that need to be taken
into account. In fact, it seems that a significant proportion of Zambian smallholders can not be
expected to transform into market-oriented production units (in the short or even longer term),
while other smallholders are better positioned to be market oriented. Understanding the
heterogeneity of Zambia’s rural households and their different potential as agricultural producers
is critical to designing strategies for commercially viable smallholders.
The objective of this paper is to help contribute to efforts to identify who and where are the
Zambian smallholders that have the highest potential to benefit from agricultural
commercialization and to identify other groups of rural households that require alternative
strategies for poverty reduction. This paper draws on the existing literature (both quantitative and
qualitative analyses) to try and classify higher and lower potential households based on different
key factors. As such, this paper should be viewed as the beginning of a process to better identify
the potential of different households to help policymakers design differentiated policies and
investment strategies that can be targeted based on these differences.
Based on the classifications presented in this paper, some rural households can be considered to
be located in ―higher economic potential‖ or ―lower economic potential ― areas, and some
households can be considered to have higher or lower potential based on their asset portfolios.
The widespread poverty and challenges facing Zambia’s rural residents have masked, to some
extent, the differences among households grouped together as ―smallholders‖. As shown in this
paper, many rural households can not be expected to directly benefit from agricultural
commercialization and will require safety nets. These ―ultra poor‖ households should benefit
from the increased availability (and possibly lower cost and increased quality) of agricultural
products produced by other rural households. Other smallholders might be able to achieve food
security and more diversified incomes over time. Importantly, even smallholders with potential to
be more market-oriented will require significant assistance to make the transformation into
commercial farmers.
T
7
INTRODUCTION
Zambia’s recent Poverty Reduction Strategy Paper (PRSP), Country Assistance Strategy (CAS),
and Country Economic Memorandum (CEM) view the agricultural sector as a potential engine
for broad based rural growth and poverty reduction. There is optimism that a dynamic
agricultural sector can lead to diversified production and exports, increased employment and
income, and improved food security. This optimism vis-a-vis Zambia’s agricultural sector is
based on the country’s abundant agricultural potential, to the extent that Zambia’s agricultural
sector has been referred to as a ―sleeping agricultural giant‖ (see McPherson, 2004, p.328-329).
Although Zambia’s agricultural sector has significant untapped potential, it is characterized by
structural problems and risks that thwart realization of this potential - especially for smallholders.
The overwhelming majority of Zambia’s agricultural producers are asset-poor smallholders who
use simple technologies (hand hoes and oxen) and cultivation practices (minimal purchased
inputs such as hybrid seed or fertilizer). They mainly produce rain-fed maize, groundnuts, roots
and tubers, mostly for own consumption on five or less hectares (most smallholders cultivate less
than 2 hectares) and productivity tends to be low. Most smallholders lack access to functioning
input and output markets and support services, and it is estimated that less than 50% sell crops in
any given year. At the other extreme are large scale commercial farms using modern inputs and
with access to domestic and global input and output marketing chains, and sometimes vertically
integrated with agro-processing. Larger-scale commercial farmers use hired labor and contribute
to national agricultural production and exports, but their relative small numbers and reliance on
labor-saving technologies limit their poverty reducing potential through labor linkages. However,
there has been a recent trend of outgrower schemes (different forms of contract farming) that
directly link smallholders with larger commercial farmers (or national/international agri-business
firms) through the supply of inputs, credit and technical assistance and the marketing of outputs.
The proliferation of outgrower schemes is largely a response to the collapse of state-supported
along with vegetables (e.g., tomatoes and onions) and fruits (e.g., bananas, citrus fruits and
guavas). This zone constitutes about 42% of Zambia’s land area.
It is important to note that within Zone II there is a low-rainfall area in the western part of the
country that corresponds mostly to central/northern parts of Western Province (which Chiwele
and Sikanu (2004) refer to as Zone IIB). Note the different shades of blue in Zone II in map 1.1. This area is often considered a part of Zone II, but is differentiated by lower rainfall and sadier
soils, poorer road and market infrastructure, high risk of droughts, mainly sorghum and millet as
staple crops along with cassava, with some maize also being grown. This drought-prone area is
also suited to extensive livestock production, cashew nuts, and timber.
10
Zone III is a high-rainfall area in the north of the country in Copperbelt, Luapula, Northern and
NorthWestern Provinces. It includes the mines of the Copperbelt area, which is relatively
urbanized and was once a source of prosperity for the nation. The decline of the copper industry
has caused an unemployment problem in this area. Zone II contains major river systems, such as
the Luapula and Mansa rivers, as well as numerous lakes. The major crops produced are cassava,
maize, groundnuts, millet, sorghum, beans and sweet potatoes; and small-scale fishing and fish-
trading is also a source of income. Because of the abundance of water in this area, there is
potential for irrigation and for fishing. This zone constitutes about 46% of Zambia’s land area.
Map 1 Agro-Ecological Zones of Zambia
Zambezi
Kaoma
Mongu
Kalomo
Choma
Monze
Mazabuka
Kafue
Mumbwa
Kabwe
Rufunsa
Kapiri Mposhi
Serenje
Mkushi
Ndola
Luanshya
Kitwe
Solwezi
Mwinilunga
Petauke
Chipata
Mpika
Lundazi
Isoka
Nakonde
Mbola
Kasama
Luwingu
Mansa
LUSAKA
Kafue R.
LAKE KARIBA
ZAMBE
E
ZI R
IVR
Lu
.a
pu
ta R
LakeMweru
LakeTanganyka
Lake Bangwelu
Kabompo
Sesheke
Livingstone
Chingola
TCI401-42/ZAMBIA-AGROECO
Kaboomp R.
Cham
besh
i R
.
Luang
wa R
.
Lun
ga R
.
ZAMBEZI V RI ER
Kafue R.
I
III bII a
II a
III
III
0 80 160 240 Km
International boundaryMain roadsRivers
Agroecological Regions
Luangwa-Zambia Rift Valley
Central, Southern and Eastern Plateaux
Western Semi-arid Plains
Northern High Rainfall Zone
I.
II a.
II b.
III.
Source: FAO (2005)
Map 2 See http://www.fews.net/livelihoods/files/zm/profiling.pdf (page 5) Or see
Notes: a) Poverty is based on food and non-food consumption poverty line, core poverty is based on food
consumption poverty line.
b) For rural areas households were divided into small-scale farmers (< 5 ha), medium-scale
farmers (5-20 ha), large-scale farmers (20+ ha), and rural agricultural. Across provinces, there is substantial variation in poverty. The lowest poverty rates are found in
Lusaka and Southern Provinces, but even in these Provinces about 47% of the population has
consumption insufficient to meet basic needs. Northern Province stands out as having the highest
poverty rate at 75% with 54% core poverty. Also, there are very high poverty and core poverty
rates in Luapula (67% poor, 47% core poor) and Northwestern Provinces (61% poor, 37% core
poor).
The urban poor are highly concentrated in just two provinces, Lusaka and Copperbelt, home to
20% of Zambia’s poor, while the smaller urban areas of the remaining provinces account for only
an additional 8% of the nation’s poor (and about 1/4 of all the country’s urban poor). The rural
poor are more widely distributed throughout the country. They are most concentrated in Eastern
Province (13% of poor) and Northern Province (15% of poor); home to 28% of the nation’s poor.
See table II.2.
20
Table II. 2 Headcount Poverty Estimates Rural/Urban, and Province,
and Shares of Poor
Province Rural Urban
Fraction of
National Poor
Living in
Province
Fraction of
National Poor
Living in
Province's
Rural Areas
Fraction of
National Poor
Living in
Province's
Urban Areas
Central 0.55 0.52 0.10 0.08 0.02
Copperbelt 0.65 0.48 0.15 0.04 0.11
Eastern 0.58 0.34 0.13 0.13 0.01
Luapula 0.70 0.48 0.09 0.08 0.01
Lusaka 0.63 0.43 0.12 0.03 0.09
Northern 0.78 0.59 0.17 0.15 0.02
Northwestern 0.64 0.37 0.06 0.06 0.01
Southern 0.51 0.32 0.10 0.09 0.02
Western 0.53 0.40 0.07 0.06 0.01 Source: World Bank (2007)
Besides measuring poverty using a defined consumption/income poverty-line, respondents for the
2002-2003 LCMS were asked how they self-assess themselves in terms of ―very poor‖,
―moderately poor‖ and ―not poor‖. Only 5% of those surveyed reported that they are ―not poor‖,
with more in urban than rural areas. Some 52% of rural households reported being ―very poor‖
versus 37% of urban households. But, 55% of urban households reported they were ―moderately
poor‖ compared to 45% of rural households. See table II.3.
Table II. 3 Self-Assessed Poverty Status of Zambians, 2002-2003 LCMS
Self-Assessed Poverty
Status
All Zambia Rural Urban
Very Poor 47% 52% 37%
Moderately Poor 48% 45% 55%
Not Poor 5% 3% 8%
Total 100% 100% 100% Source: World Bank (2005, p.35).
Rural Household Demographics
Below we review the demographic characteristics of rural households, contrasting poorer
households with better-off households. Some basic mean demographic characteristics of rural
households are shown in table II.4.
21
Table II. 4 Demographic Characteristics of Rural Households, by Consumption Quintile
Quintile of National Distribution
Average
of All
HHs
Quintile #1
(Poorest
20%)
Quintile
#2
Quintile
#3
Quintile
#4
Quintile #5
(Richest
20%)
Mean HH size 5.3 6.5 6.2 5.5 4.7 3.7
Medium age of HH
head (years)
40 44 43 39 37 35
% of female headed
HHs
24% 27% 23% 23% 25% 24%
Mean schooling of
household head
5.3 4.4 4.9 5.1 5.5 6.2
Dependency ratio 1.15 1.35 1.33 1.25 1.06 0.80
Youth dependency
ratio
1.07 1.26 1.24 1.17 .98 .72
Old-age dependency
ratio
.08 .09 .09 .08 .09 .08
Share of HHs with 1
generation
12% 3% 5% 6% 15% 29%
Share of HHs with 2
generations
65% 65% 67% 72% 66% 58%
Share of HHs with 3
generations
22% 29% 27% 21% 18% 13%
Share of HHs with 4
generations
1% 2% 2% 1% 1% 0%
Source: World Bank (2005)
Note: Calculations of the mean were done at the household level, weighted by household sampling weights.
Consequently, the figures are means of households rather than means of individuals.
Household size is highest among poorer households, averaging 6.5 for the poorest quintile, and is
sharply lower in the richest quintile. Poorer households also tend to be headed by older
individuals. The median age of household heads in the poorest quintile is 44 years, compared to
35 for heads of the richest rural households. There is a strong association between education
levels of household heads and household consumption. The relationship is consistent across the
distribution. It is strongest at the top: households in the top quintile have an average of 0.7 year of
schooling more than those in the next quintile.
The frequency of female-headed households varies much less consistently by consumption level.
Although female headship is highest among the very poorest—among whom women make up
27% of household heads -- moving up the income distribution there is no clear relationship
between the two variables.
Additional information about household demographics includes dependency ratios and the
number of generations found in each household. The denominator for the dependency ratios is the
number of adults in the household, defined as those age 15-64. The youth dependency ratio is the
mean number of children per adult, the old-age dependency ratio is the number of elderly per
adult, and the sum of the two is the household dependency ratio. The youth dependency ratio is
high; the average rural Zambian household has 1.07 children per adult, and the ratio is highest for
the poorest households. The old-age dependency ratio is only 0.08 and varies little by quintile.
Almost all rural Zambians live in multi-generational households. Two-thirds live in households
with two generations, and 23 percent live in households with three or more generations present.
22
The richest rural households, which are smaller on average, also are less likely to have three and
more likely to have just one generation.
Access to safe water. Only 34% of rural Zambian households have access to what would
generally be considered a safe source of water: a water tap, a borehole, or a protected well. The
remaining households rely on water taken directly from a river or lake, piped from a river or lake,
or taken from an unprotected well. Even among rural households in the top quintile, only 44%
have access to safe water.
Access to sanitation. Two-thirds of rural residents use a pit latrine, and almost all others have no
toilet facilities at all. Surprisingly, households in the poorest quintiles are slightly more likely
than better-off households to have their own pit latrines.
Access to household energy. The overwhelming majority of rural households use firewood they
collect for cooking. Better-off households are slightly more likely to use other fuels, chiefly
charcoal. Collecting of firewood can be a time consuming activity for women and girls.
Access to housing. 77% of households report owning a residential building. Homes of
households in the richer quintiles are slightly more likely to be made of concrete brick and less
likely to be made of mud brick. Mud floors are found in the homes of most rural Zambians at all
consumption levels. About 19% of households in the wealthiest quintile have concrete floors,
compared to 8% of those in the poorest quintile. Homes of better-off households are more likely
to have roofs of iron or asbestos, rather than grass or straw. But even among those in the richest
quintile, 80% have grass or straw roofs.
Access to markets, transport and public services. There is surprisingly little variation in median
distances to markets and public transport by quintiles. This suggests that wealthier households are
not highly concentrated by community but rather that rich and poor households are fairly
interspersed. Access to public services is mixed. While median distances to a middle-level basic
school (grades 1-7) and a health facility are five kilometers, median distances to a police station
(19 km) and post office (25 km) are much higher. The extent to which markets are accessible to
rural households is unclear. More than half report being within five kilometers of public
transportation, but it is not possible to evaluate whether available transportation could serve to
transport agricultural products to a market. The median distance to a food market is only 9
kilometers, but it is not known if these markets are integrated with the national economy. Median
distances seem large for the nearest bank (48 km), public phone (40 km), and agricultural input
markets (25 km) selling equipment and fertilizer needed for modern agriculture.
Asset ownership. Ownership of basic agricultural tools—an axe and hoe— is nearly universal
among households in all quintiles. Most durable consumer goods are owned by only a small
fraction of households. Exceptions are a bicycle (owned by 35% overall) and radio (34%). What
is most striking in the table is that there are few assets with sharply differentiated ownership rates
among rich and poor.
Principal economic activity. Agriculture is overwhelmingly the dominant activity in rural areas.
In 80% of rural Zambian households, the principal activity of the household head is farming.
People at the top of the distribution are slightly less likely to be engaged in agriculture; 71% of
household heads in the richest quintile report farming as their main activity. Only 9% of
individuals live in households where the head is engaged mainly in wage work, with a smaller
percentage among the poorest households. See table II.5.
23
Table II. 5 Principal Economic Activity of Rural Household Heads,
by Consumption Quintile
Quintile of National Distribution
Activity Average
of All
HHs
Quintile #1
(Poorest
20%)
Quintile
#2
Quintile
#3
Quintile
#4
Quintile #5
(Richest
20%)
Farming 79% 82% 84% 80% 79% 71%
Fishing 2% 4% 2% 3% 3% 1%
Wage Work
(incl. Piece work)
11% 8% 8% 10% 10% 16%
Self-Employed 6% 4% 4% 4% 6% 10%
Other 2% 2% 2% 3% 2% 2%
Total 100% 100% 100% 100% 100% 100% Source: World Bank (2005)
A breakdown of economic activities by males and females above the age of 20 did not exhibit
large differences in the share for farming (67% males, 71% females) or self-employment (5%
males, 4% females), but males were much more likely to work in wage work or piece work (10%
males versus 2% females) and females were more likely to work in productive but unpaid family
labor (16% females versus 6% males).
Sources of income. Another way to look at economic activity is to examine household sources of
income. Table xx shows a breakdown of the various income sources. The total income measure
includes the value of the household’s own production consumed. Consumption of own production
accounts for just over half of average rural household income for rich and poor households alike.
The other large categories of income are food crop sales, salary, and remittances (6% of income
in the average household), non-farm business income (10%), and ―other income‖ (11%) Salary
and non-farm business income are more important for better-off households. See table II.6.
Table II. 6 Mean Shares of Income by Source for Rural Households,
by Consumption Quintile
Quintile of National Distribution
Activity Average
of All
HHs
Quintile #1
(Poorest
20%)
Quintile
#2
Quintile
#3
Quintile
#4
Quintile #5
(Richest
20%)
Consumption of
own production
55% 57% 55% 54% 55% 52%
Food crop sales 6% 7% 6% 6% 6% 5%
Non-food crop sales 2% 1% 2% 3% 2% 2%
Livestock and other
ag income
2% 2% 2% 3% 2% 3%
Non-farm business 10% 11% 10% 10% 13% 11%
Remittances 6% 7% 6% 6% 7% 6%
Other 12 13% 12% 12% 11% 9%
Total 100% 100% 100% 100% 100% 100% Source: World Bank (2005)
Land use patterns. Average total land worked varies little by quintile, but better-off households
average more than twice as much non-food cropland as the poorest households. The smaller
households in the richest quintile also work twice as much total land per capita as the poorest
households. See table II.7.
24
Table II. 7 Mean Area of Crop Land Used for Food and Non-Food Crops, by Household
Quintile of National Distribution
Average
of All
HHs
Quintile
#1
(Poorest
20%)
Quintile
#2
Quintile
#3
Quintile
#4
Quintile
#5
(Richest
20%)
Hectares of food crops 1.08 0.97 1.11 1.11 1.05 1.16
Hectares on non-food crops 0.11 0.05 0.09 0.14 0.12 0.12
Hectares of all crops 1.19 1.02 1.20 1.26 1.16 1.28
Hectares of all crops per
capita
0.25 0.16 0.21 0.24 0.28 0.36
Source: World Bank (2005)
Table II.8 presents a further breakdown of household crop and livestock activities. Most
households in all quintiles grow at least some maize. Substantial fractions of households also
grow cassava, millet, sweet potatoes, and groundnuts. There is substantial differentiation in crop
choices by rich and poor for cassava, which is grown by half of the poorest households but just
over a quarter of the richest households, and hybrid maize, grown by 11% of the bottom quintile
and 28% of the top. Among the relatively few households with non-food crops, cotton and
sunflower are dominant. Nine percent of those in the poorest quintile grow at least some non-food
crops, compared to 13% overall.
Table II. 8 Crop Production Patterns and Livestock Ownership of Rural Households,
by Consumption Quintile
Quintile of National Distribution
Activity Average
of All
HHs
Quintile #1
(Poorest
20%)
Quintile
#2
Quintile
#3
Quintile
#4
Quintile #5
(Richest
20%)
At least one food crop 93% 94% 96% 95% 92% 89%
Local Maize 59% 54% 63% 62% 62% 54%
Hybrid Maize 19% 11% 15% 19% 21% 28%
Cassava 38% 50% 45% 39% 33% 28%
Groundnuts 40% 40% 44% 45% 38% 32%
Mixed Beans 16% 18% 18% 16% 15% 12%
Millet 16% 24% 20% 16% 12% 11%
Sweet Potato 30% 30% 33% 32% 29% 26%
At least one cash crop 13% 9% 14% 16% 15% 13%
Cotton 9% 6% 7% 10% 10% 9%
Tobacco 1% 0% 2% 2% 1% 1%
Paprika <1% 0% 0% 0% 0% 1%
Sunflower 5% 3% 6% 5% 5% 4%
Any Livestock 71% 69% 73% 74% 72% 66%
Cattle 16% 11% 13% 18% 19% 19%
Goats 18% 17% 20% 18% 17% 16%
Chickens 64% 64% 69% 66% 65% 58%
Pigs 8% 7% 10% 8% 8% 8% Source: World Bank (2005)
In table II.8 we observe livestock ownership by quintile, and 71% of rural households reported
the ownership of some livestock. A clear difference by quintile is seen only for cattle ownership:
25
19% of households in the top quintile having cattle compared to 11% of those in the bottom
quintile. These differences are more profound by province than by quintile. See table II.9. It can
be observed that cattle are much more likely to be found in Central, Eastern, Lusaka, and
Southern Provinces – Agro-Ecological Zone II. Again we observe a strong correlation between
assets, livelihoods and location.
Table II. 9 Livestock Ownership: Rural Households, by Province:
Percentage of Households Owning Each Type of Livestock
All
Rural
House-
holds
Central Copperbelt Eastern Luapula Lusaka North-
ern
Nwest-
ern
South-
ern
West-
ern
Any
Livestock
71 77 53 74 68 60 76 69 73 66
Cattle 18 20 4 23 1 15 7 6 31 27
Goats 18 21 7 18 13 23 19 16 33 3
Pigs 8 2 2 17 2 6 11 6 10 4
Sheep 1 2 0 2 1 1 1 2 0 1
Chickens 64 70 51 67 61 54 72 63 63 58
Ducks
and
Geese
5 6 5 5 12 6 4 3 3 5
Guinea
Fowls
4 5 0 5 2 4 3 3 8 1
Other
Poultry
3 4 2 3 1 4 3 1 6 1
Source: World Bank (2005)
II.B. Qualtitative Poverty Profile – based on Parker and Mwape (2005)6
Parker and Mwape (2005) report on a qualitative study carried out in villages and settlements of
all three of Zambia’s major agro-ecological zones. Two districts were randomly selected in each
zone7, and 3 villages were visited in each district. A total of 18 villages were visited. Villages
were purposively selected to reflect the range of conditions that is typical of each of these three
zones. Within each village, the village committee was requested to invite approximately 30
residents to the discussions, which took about one week in each village.
Zambian villages do not appear to be characterized by wide discrepancies in levels of wealth (in
contrast to most rural communities in the world). Nearly every villager was defined as ―poor‖ to
some extent, but there are recognized differences between three categories: the very poor, the
poor and the better off. Even those households defined as better off, however, were viewed as
vulnerable to falling into poverty and their future well-being was uncertain. This was true even of
traditional leaders. In most study sites, the village headman or local chief was one of the
wealthiest individuals in the village, but this did not prove to be true in every case.
Although wide differences in household wealth levels exist in rural Zambia, the really wealthy
households were not found to be residing in the rural villages. Thus, rural elites were not found
6 Parker, B. and F. Mwape (2004). ―Rural Poverty and Vulnerability in Zambia, 2004: A Qualitative Study.‖ Paper
prepared for DFID and The World Bank, Social Protection Unit. mimeo. 7 Zone I: Luangwa and Siavonga Districts, Zone II: Katete and Mumbwa Districts, Zone III: Mpika and Mansa
Districts.
26
controlling local resources or denying them to the poor and powerless. Instead, a generalized
condition of economic uncertainty and material scarcity prevails in the villages. A type of social
and economic egalitarianism ―collective poverty‖ characterizes these communities. Another
consequence of this lack of wealth differentiation is that there are relatively few households with
enough resources and generating sufficient surpluses to hire poorer neighbors or provide them
with loans or other assistance in times of need. But, the better-off households do occasionally
provide emergency loans or assistance to the poor, or buy their surplus produce. In general,
however, they can only offer a day’s casual agricultural labor (ganyu), paid in food or in kind.
Characteristics of the 3 wealth categories (see table II.10):
Very Poor Households:
The very poor lack the meager assets normally found in rural homes and some of the basic
necessities of life. Food insecurity was mentioned as a primary aspect of extreme poverty in all
three zones. The very poor are often unable even to eat the two meals a day typically consumed
by the moderately poor. They have no stored grain and may be forced to go without meals for a
full day or for days. In addition, they do not have adequate clothing and may possess no bedding.
They are housed in mud huts with thatched roofs. They are unable to educate their children due
to their inability to meet minor expenses such as books and school supplies, uniforms, and fees
charged by the local parent-teacher association (PTA). In some areas (such as the poorest areas
of Zone 1), they do not own any livestock, while in slightly better-off areas (such as many found
in Zone 2), they are likely to own a single goat or 2-3 chickens. In all three zones, ownership of
livestock was an important criterion for separating better-off from the poorer households.
Particularly in Zones I and III, the very poor were said to have no identifiable source of income.
In drought-prone Zone I, households with labor and access to inputs are often unable to cultivate
due to lack of water. Most rely on seasonal casual agricultural labor in the fields of better-off
neighbors. They thus provide the labor pool that is available to better-off households with a
shortage of agricultural labor. The very poor were described as those who are always in search of
daily casual work or ganyu. Some of the very poorest are unable even to perform ganyu.
Typically, these are the labor deficient households headed by the elderly, the disabled, or
abandoned or widowed women caring for small children. Households are similarly constrained
when the only healthy adult is caring for a chronically ill family member. See table II.10.
Ganyu Labor
Daily casual work or ganyu is labor that is paid in kind or with a day’s supply of food.
Casual agricultural work of this kind is not a reliable source of income or food, since it
tends to be available only seasonally.
27
Table II.10 Key Characteristics of 3 Wealth Categories by Agro-Ecological Zone
ZONE I
The Poorest The Less Poor The Better-Off
Inadequate food
Poor clothing
Lack of bedding
No livestock
Mud/thatch house
No visible source of income
Aged, chronically ill, disabled
Work for others (ganyu)
Keep orphans
Illiterate
Unable to send children to school
Have steady source of
income
Have a skill (brick
making, mat weaving)
Own chickens and goats
Do not own cattle
Usually food sufficient but
occasionally food short
Always food secure/three meals per
day
Own cattle (as well as pigs, goats,
chickens)
Have house of permanent materials
Own farming implements (plough)
Have off-farm income source
(fishing, jobs)
Hire casual labor
Have stored grain (granary)
Have many wives
ZONE II
The Poorest The Less Poor The Better-Off
Food insecure all year (miss meals)
Use hand hoe for farming
Cultivate little
Lack agricultural inputs
Work for others
Own a few small livestock (fowl,
goats)
Grass-roofed house with dirt floor
No remittances from outside village
Old, orphans, widows, ill or
handicapped
Cultivate 2-5 ha of land
Use either hoes or ploughs
Own small livestock (a
few also own cattle)
Employed as driver, tailor,
etc. or own small shop in
village
House has concrete floor
Own cattle (as well as smaller
livestock)
Own vehicles
Farm using draught animals or
tractors
Adequate food at all times
Hire agricultural labor
Brick house with iron roof
ZONE III
The Poorest The Less Poor The Better-Off
Food insecure at all times
Own no livestock
Have land, not able to cultivate it
Poor clothing
Work in exchange for food
No remittances
Poor access to public resources
(schools, markets)
Sometimes food insecure
Own hoe (some own
ploughs but no oxen)
Own small livestock
Food secure always
Own farm implements (ploughs)
Own oxen, cattle and cart
Own bicycle, radio, a shop
Able to educate all children
Some receive remittances from
outside village
Employs others (ganyu)
House has iron roof Source: Parker and Mwape (2004)
Moderately Poor Households:
The moderately poor, or less poor, were said to be basically food secure; although they might
experience occasional food shortages during the lean season, they are normally able to maintain
an acceptable level of consumption. Their homes are usually thatched with grass but, unlike the
poorest, may have a cement floor. They possess a few assets in the form of beds, cooking pots,
livestock (usually smaller livestock such as goats and chickens) and basic farm instruments.
They are likely to possess a hoe, but rarely a plough and never oxen. Reliance on hand hoe
agriculture limits the amount of land they can cultivate, but since they are able to farm, they are
considered to have a reliable source of income. Some households were placed in this category
because a member had a skill such as carpentry, brick-laying or bicycle repair. In river areas,
households in this group are sometimes able to make and sell mats or basketry made from reeds.
28
Better-Off Households:
In all three zones, fewer than 10 of the 30 households categorized in the wealth ranking exercise
were assigned to the ―better off‖ group. In some villages of Zone I, only 2-3 households were
classified as ―better off.‖ The better off households usually own cattle and ―luxury goods‖ such
as radios and bicycles. They live in homes built of burnt brick and roofed with corrugated iron.
The better off households are food secure and can eat as many as three meals a day. They are
able to educate their children through secondary school, since they can afford school fees,
uniforms, and transport (or occasionally boarding fees).
Better-off households possess livelihoods that are more reliable than those of the moderately poor
and very poor. They have ploughs and draft animals, or in Zone II, maybe even a tractor. They
are thus able to cultivate a larger area and, since households in this category can afford to buy
inputs, they produce enough maize to fill a granary and often can sell surplus produce. They
often operate a small shop in the village, and they sell or trade produce, fish, etc. outside the
village. Although a few moderately poor households may hire ganyu labor, it is the better off
who usually employ members of other households to assist with planting, weeding and
harvesting. These relationships generally do not develop into long-standing patron-client
relationships, as they are usually ad hoc and temporary. These relatively wealthier villagers do
not, therefore, constitute a reliable source of credit, employment or emergency assistance to the
families they have employed. However, this does indicate the existence of labor and credit
linkages that can expand over time as the household succeeds.
The Importance of Livestock:
After basic food security, the factor most mentioned when informants were distinguishing poorer
from better-off households was possession of livestock, particularly cattle, pigs, goats and sheep.
Domestic animals were described as both an indicator and a source of higher economic standing.
The ability to plough using draught animals can dramatically increase a household’s productive
capabilities. Cattle, therefore, were described as the most desirable livestock asset; although they
are susceptible to disease and beyond the means of the average poor household. Small livestock
are a common means of attempting to cushion against shocks and shortfalls in consumption; since
they can be sold to smooth consumption, pay school fees or buy medicines, etc.
Oxen Use
Oxen use can help raise average yields and save labor at critical points in the cropping cycle. Such
innovations can help smallholders plant more land without resorting to hired labor, or be constrained by
household labor availability. Increasing land under production by smallholders is one of the keys for
agricultural growth to be poverty reducing. Nationally, it is estimated that only about 25% of smallholders
use oxen (Haggeblade and Tembo, 2003), but oxen are unevenly distributed throughout the country. For
example, oxen use is virtually non-existent in Northern and Northwestern Provinces.
29
Explanations for Wealth Differences
Informants suggested that the better-off are often those receiving remittances from urban
relatives, especially educated adult children, who were employed in well-paying jobs. The
moderately poor and better off were also said to possess either a remunerative skill or a
productive asset, such as a sewing machine, that could be used to generate income. In other
cases, the better off were recent immigrants (such as retirees) who arrived in the village with
some capital to invest in agriculture, horticulture, or livestock.
The very poorest were often described as the ―new poor‖—households that have lost a
breadwinner or are elder- or female-headed as a result of HIV/AIDS or other diseases, and
individuals returning to their natal villages because they have been retrenched, have retired witho
Risks and Vulnerability
Informants indicated that the number of households that had experienced declining
income/consumption during the past five years is much larger than the number that had managed
to improve their economic standing. Informants were asked to describe events that have caused
households to lose income/consumption. The events, which differed somewhat by agro-ecological
zone, were:
Zone I: Droughts, damage to crops by wildlife, floods, loss of livestock to disease (and attendant
loss of draught power), chronic illness in the household, laziness, and death of the household
head.
Zone II: Floods, droughts, inability to purchase fertilizer/inputs, human and animal diseases,
death of a breadwinner, theft of livestock, and cost of health care
Zone III: Droughts, floods, cholera outbreaks, crop destruction by pests, livestock diseases,
chronic illnesses, death of adult members of the household, fire, and violent crime/theft.
It was found that covariate shocks such as droughts, damage to crops by wildlife or pests, floods,
etc. were mentioned most of often as the critical risks faced by rural households. Idiosyncratic
shocks, however, particularly those resulting from diseases in humans and livestock, also trap
households in poverty; and households described as the poorest were mostly those that had lost
labor power to HIV/AIDS, tuberculosis, cholera or other fatal illnesses. Households employ a
range of defensive and preventive strategies to reduce the risk of destitution in the event of
shocks, such as stockpiling grain, breeding small animals for sale, crop substitution, multiple
plantings etc. Removing a child from school is considered to be a last resort coping mechanism.
Rural Poverty and Vulnerability in Zambia
In a recent survey of several rural areas in Zambia carried out for C-SAFE, distinct spatial and
household differences were identified. A major conclusion was that: ―Rural households have
very few assets. In the survey, about 80% of households were classified as asset poor or very
poor. Households with limited assets are vulnerable, not only because of their relative poverty,
but also because they have few items to divest should they be forced to spend money on food
or emergencies (C-SAFE, 2003, p.45).‖
30
In many communities there seems to be less reliance on the extended household to provide
assistance in times of trouble than in the past. In addition, some traditional extended family
leveling and support mechanisms, such as communal meals, have broken down entirely.
Voluntary labor sharing between related households can still be found, but it is being gradually
replaced by ganyu arrangements. As part of the extended family tradition, Zambians have often
fostered children from related households. This tradition, too, is said to be on the decline.
Families feel the need to concentrate scarce resources on the feeding and education of their own
children, and they are less certain that their investment in nieces and nephews will be repaid.
Changes in Zone II: Outgrower Schemes and Conservation Farming
Most of the positive changes mentioned by informants were concentrated in Zone 2, the growth
of: a) contract farming or outgrower schemes, and b) conservation farming. In Zone 2, many
participants indicated that several private firms operate out-grower schemes to produce high value
cash crops, such as cotton, paprika, tobacco, etc. According to participants, these firms provide
inputs, train farmers on how to produce these crops, and offer a guaranteed market for the
products. Zone II informants noted that many households are taking advantage of these
opportunities. However, some people reported difficulties in working with out-grower schemes.
The field activities are labour intensive and sometimes beyond the capabilities of individual
households. Furthermore, cultivators have no say in establishing the grade and the price of the
product.
Another positive development that has primarily benefited Zone II is the Conservation Farming
(CF). Although Conservation Farming was initially concentrated in Zone II, efforts were made
under the FAO-FSP to expand it to Zone I. After a year of implementation, the results were found
to vary significantly according to soil quality and rainfall patterns. Some farmers in both Zone I
and Zone II expressed positive views about CF, but results were apparently better in Zone II.
However, complaints were heard from both zones. CF requires digging basins before the
beginning of the annual rains, and then planting maize within the basins. Some informants found
the effort of digging in dry, hard soils to be beyond their capacities, given the lack of tools.
Others reported that their basins had dried up or become water-logged. Clearly, CF is not a
universal panacea that is suitable to all parts of Zambia, but comments from informants were
more often favorable than unfavorable. It should be noted that CF techniques do not deliver their
full benefits for several seasons and that most trials are only one to two seasons old.
Changes in Zones I and III: Crop Diversification
In Zones I and III, no formal out-grower schemes were reported by study participants. It may be
assumed, therefore, that these opportunities are generally unavailable outside Zone II. Many
Zone III farmers reported that they have reduced or abandoned maize cultivation in favor of
cassava and millet; and a few cultivators in Zone I have ceased producing maize in favor of
sorghum. Cassava does not require fertilizer, it is a traditional crop in Zone III, and (although
difficult to process) it is easy to grow in this ecological zone. Sorghum is drought-resistant and
hence more appropriate to Zone I, a low rainfall area. A number of Zones II and III farming
households have also begun to intensify their investment in horticulture. This was said to have
improved the nutrition and food security of those households, as well as providing cash income if
markets can be found for the fruits and vegetables they produce. Some farmers in Zones I and III
have joined outgrower schemes where such arrangements are available.
31
Maize is Still the Choice of Smallholders
However, the majority of study participants from all zones expressed a desire to continue in
maize cultivation. Smallholder households that have abandoned it would still prefer to cultivate
maize– it is thought to be more palatable, more nutritious and far easier to process – but they find
it increasingly beyond their capacity. Maize is the staple crop of the country, and rural Zambians
feel that no meal is complete without it. Furthermore, they are familiar with maize cultivation but
may lack information on the requirements for growing other crops. The versatility of maize
appears to make it a safer choice for the risk-averse poor. It is a subsistence crop, a cash crop and
a safety net. Although produced primarily for own-consumption, maize surpluses can be sold as
a cash crop or, if an acceptable market price is not found, can be stored and consumed during lean
periods. Also, it produces fodder for livestock and can be eaten early (green) in the season if
alternative food is not available. Other crops offer few of these advantages. For example, markets
for sorghum, cassava and millet are smaller and unpredictable.
II.C. Participatory Assessment: Kefa Village – based on Skonsburg (2003)8
A rapid participatory assessment was undertaken in Kefa Village located in Eastern Province in
2003 (see Skonsberg, 2003). The findings reflect changes taking place in much of rural Zambia
since the early 1990s. It was found that:
a) Demise of the GRZ extension system that provided farmers with technical support,
subsidized credit, seeds and fertilizer, and the lack of public or private sector to
replace these services.
b) Land issues tend to be debated, but land reform per se is not an issue for the
community (only 25 percent of interviewed residents said they did not have enough
land).
c) Land is not equally distributed (advantaged groups include clan members,
wealthier farmers and long-time residents).
d) Soil fertility problems are increasing the need for fertilizer and improved seeds.
However, farmers do not have cash or credit to buy improved seeds and fertilizer.
e) Seeds and credit are sometimes available from agents of the cotton and tobacco
buyers.
f) Seeds and fertilizer are rarely available in a timely manner.
g) On average, a household cultivates about 1 ha maize and 0.4 ha groundnuts,
primarily for home consumption. The major binding constraint tends to be
available household labor, not land.
h) Livestock numbers, especially cattle, populations are declining due to drought and
illness.
i) Small livestock (e.g., chickens and goats) are gaining in importance.
j) Water scarcity is a major problem.
8 Skjonsberg, E. (2003) ―A Report on 25 Years of Rural Change in Kefa Village, Eastern Province, Zambia.‖
Background Report for Zambia PSIA. Prepared for Social Development Department. The World Bank: Washington,
D.C. mimeo.
32
k) Lack of fertilizers is claimed to be the biggest problem. When people say that
there is a ―lack of fertilizer‖, this includes the lack of suppliers and the high cost of
fertilizer when available.
l) GRZ programs for subsidized fertilizer do not reach Kefa farmers or reach them in
insufficient quantities.
m) Lack of fertilizer and water scarcity are driving cropping choices. Cotton
production has increased because it needs less fertilizer and water, and because and
agents for cotton processors tend to provide advances of inputs and guaranteed
markets)
n) There is also a lack of output markets. ―One big problem that we all have is where
to sell our produce. There is no market so instead we just have to sell it one by
one.‖
o) Increased problems with malaria, HIV/AIDS, and orphans.
p) Increased dependence on assistance from donors and NGOs (church groups).
q) Persistence of beliefs in witchcraft and fatalistic attitudes.
The findings from Kefa Village indicate that there are many factors that influence the
opportunities and constraints faced by smallholders, including important social and cultural
factors. Also, it is apparent that for most households, conditions worsened over time. Results
from the assessment at Kefa Village are very consistent with the findings reported by Parker and
Mwape (2004).
II.D. Smallholder Model – based on Siegel and Alwang (2005)
Siegel and Alwang (2005) used a stylized single-period linear programming (LP) model of
smallholder households in rural Zambia to examine potential impacts on land and labor use, and
income-generation of suggested land tenure reforms, changes in fertilizer policy, and
infrastructure investments, and also impacts of HIV/AIDS.9 Major findings include:
a) Because of a ―safety-first‖ objective function10
, smallholders’ primary objective is
to produce their own staple foods for home consumption, especially in remote
areas. These food security concerns and subsequent livelihood strategies imply a
significant (real and opportunity) cost to smallholders and sub-optimal use of
assets.
b) Using hoes and oxen, smallholder households can only cultivate about two to four
hectares of land, respectively, before household labor constraints become binding.
Increased access to land would therefore not benefit most households unless hired
labor became available at a relatively low cost. Labor-saving technology may
substitute for labor and allow for improved labor allocation.
9 The smallholder model is an update of Alwang and Siegel (1994) and Alwang, Siegel and Jorgensen (1996). The
model has an objective function, model activities, and constraints for different resources, with labor disaggregated by
month, over a one-year period. The model maximizes returns from agricultural production given fixed assets, subject
to the available technologies and technical constraints. The model only considered labor income from on-farm
agricultural activities, assumed to be carried out only household members. 10 The ―safety-first‖ objective function means that smallholders first make their production decisions based on
providing staple foods for home consumption, and then allocate remaining resources to other activities.
33
c) Technologies such as conservation farming can help spread out labor demand more
evenly though the year. However, the ―entry costs‖ of such technologies may be
prohibitively expensive for the majority of resource-poor smallholders.
d) Higher official market prices for fertilizer and lower prices for maize have made
hybrid maize production less economically attractive for smallholders. Lower
maize/fertilizer ratios and the continued lack of dependable input supplies have
slowed the adoption of improved technologies and encouraged a ―retreat‖ to semi-
subsistence farming, especially in remote areas.
e) For most smallholders, there are relatively low returns to farming—less than $1 per
person per day. This low return to labor makes it difficult to generate surpluses
that could be saved or invested in improved technologies, and thus contributes to a
cycle of poverty.
f) Market liberalization and commercialization increases the need for cash, other
liquid assets, or credit. The scarce amounts of cash available and the high returns to
cash suggest that demand for credit will likely be robust and the returns relatively
high.
g) I mproved infrastructure should, in theory, lower transport and transaction costs, and
increase the commercial orientation of smallholders. However, lower costs might
not compensate for the decline in output prices and rise in input costs that
smallholders have faced over time.
h) Remoteness leads to less land under cultivation, lower returns per household
member and lower returns to land. Improved transport should benefit remote
households and encourage more intensive and extensive utilization of land, and
higher income-earning potential.
i) Improved infrastructure increases confidence in markets. Such confidence could,
over time, reduce the tendency of smallholders to allocate scare resources to
production of staple foods for own consumption. The combination of less
remoteness and increased confidence in the market can lead to significant
improvements in household well-being.
j) The food security constraint severely lowers household returns, and its ―removal‖
should allow smallholders to produce higher-value crops instead of traditional low-
value staple crops. Over time, these households might adopt improved
technologies and possibly increase their demand for land.
k) HIV/AIDS and other serious illnesses will likely continue to negatively impact
household welfare. Labor reductions lead to less land under cultivation and more
staple foods as a share of total crops. Purchased inputs increase as a share of the
total value of production, indicating some substitution of purchased inputs for
scarce labor.
From the above discussion of results of the smallholder model, and consistent with findings of
many other studies – a major aspect of successful commercial smallholder agriculture in Zambia
is improving the efficiency and intensity of household labor in order to expand the amount of land
under production. In addition, it is important to identify farming systems – farm and off-farm
agricultural (crops and livestock) and non-agricultural activities that are based on a more even
spread of labor throughout the year. Improved efficiency in land preparation using oxen or
tractors and improved water management through conservation and/or irrigation is also needed.
34
II.E. Classification of Rural Households – based on Pinder and Wood (2003)11
Based on the GRZ’s 2000 Post Harvest Survey, there were 830,000 rural households dependent
on agriculture. Assuming an average of between 5-6 people per household, these 830,00
households approximately account for the estimated 4,600,000 rural poor and ultra poor persons
in Zambia.
Pinder and Wood (2003) have classified these 830,000 smallholder households into 3 groups:
1) The very poorest and most vulnerable households who suffer chronic food
insecurity and require long-term social protection and support (200,000 ―sub-
subsistence‖ smallholders)
2) The very poor households that have potential to achieve a poor but sustainable
livelihood, marketing a small surplus viable in a year of a reasonable amount of
rain, with the eventual possibility of joining an outgrower scheme (300,000
‖marginal smallholders‖)
3) The poor households with potential to become, or which have already become
commercially viable small-scale farmers, either joining an outgrower scheme or
marketing their surplus in the domestic market (330,000 ―viable‖ or ―emergent
smalllholders‖. This includes about 30,000 households with 10 hectares or more.
In this classification, Pinder and Wood (2004) estimate that about ¼ of smallholder households
are ―sub-subsistence’ households. In a recent study on the ―incapacitated poor‖ in Zambia,
several estimates were presented, but most were in the range of 15-20% (Milimo and others,
2004). On the other and, they assume that about 35% of smallholders are ―marginal‖ and 45%
are ―viable/emergent‖. Based on all the other evidence presented in this chapter, the estimates
seem high for ―viable/emergent‖ smallholders. So, instead of focusing on the precise distribution
of households in each group, it is important to focus on the characteristics of the respective
households groups knowing that they all represent significant shares of the smallholder
population.
Below are some salient characteristics of each group:
Sub-subsistence Smallholders: smallholder households that are not commercially viable
farmers and are unlikely to ever become so. They represent the most vulnerable social groups.
Ultra poor, often female headed households, or elderly or child headed households, the
chronically sick and/or disabled – with less than sufficient to feed themselves throughout the
year. They are usually far distant from main rail and road routes, occupy the least arable land in
the community, and they have no resources on which to call in event of a ―shock‖ (e.g., drought,
death, sickness). They usually provide seasonal unskilled labor to large farm estates and
outgrowers’ holdings. The term ―farmer‖ might be a misnomer for this group since they are
simply surviving by whatever means they can, frequently as casual laborers on larger farms and
estates, more often on food relief. They are likely to continue to need social protection measures
in the foreseeable future.
11 Pinder, C. and Wood, D. ―The Socio-Economic Impact of Commercial Agriculture on Rural Poor and Other
Vulnerable Groups.‖ Working Document. DFID. February 2003.
35
Marginal Smallholders: smallholder households who could, potentially become self-sufficient
in food and capable of producing a small marketable surplus. Many are bordering on ultra poor,
but they have some resources on which to call – e.g., greater physical strength and better health,
slightly more and better land closer to means of irrigation, some small savings or livestock to use
as collateral for informal or micro-loans. Again, they often reply on obtaining causal work on
larger farms and estates. Some of these households benefit from their location in a more favored
agro-ecological zone and/or better access to roads and markets – which make transactions costs
for both production and consumption lower. Some in this group have failed to participate in an
outgrower scheme or failed while participating in an outgrower scheme, or who do not live in an
area where outgrower schemes exist; they grow for subsistence and the local market, and provide
seasonal labor to the estates and outgrowers.
Viable/Emergent Smallholders smallholder households who are poor but potentially, or already
commercially viable small scale farmers. They often have assets that are used inefficiently
because of conditions such as lack of access to markets because of poor infrastructure, or inability
to raise small loans for investment because they do not hold title to their land. As a result they
are vulnerable to exploitative buyers (e.g, they are unable to store their surplus and are forced to
sell it when prices are low, or they are forced to accept a low price from the only trader who
passes through the area). They have the potential to participate, or may well be participating
already in outgrower schemes, or they are functioning as commercially viable independent small-
scale farmers selling to the domestic market
II.F. Hard to Measure Factors: Culture and Attitudes
There are many ―hard to measure‖ factors that influence the potential for agricultural
commercialization. Most notable, are cultural and attitudinal factors associated with farming.
Many lament the fact that the greatest constraint facing Zambian smallholders is the lack of a
more business oriented approach to farming. Most smallholders view agriculture as a way of life
and not as a business. Other cultural and attitudinal factors affect Zambian smallholders – as
noted in the qualitative studies by Parker and Mwape (2004) and Skonsburg (2003). Culture and
attitudes about farming also linked to locational factors (and historical factors) in much of Zambia
(Francis and other, 1997; Milimo, Shilito and Brock, 2000).
As noted by Chiwele and Sikananu (2004, p.71-2): ―Unfortunately in Zambia, agriculture is
mostly taken as a way of life rather than as a business such that entering into markets is not well
planned for. Helping farmers to take a more commercial approach to their activities is important
and must be deliberately promoted.‖ ―Two elements necessary in commercializing smallholder
agriculture are raising the entrepreneurial skills and reorienting the mindset of small producers
towards markets as well as adopting policy actions that help the markets work for the poor. ―
In Zambia some smallholders have experience with commercial agriculture, but that does not
mean that they are commercial smallholders. Smallholders in Zambia have a history of
dependency on others to carry out the commercial activities associated with agricultural
production while they focus on the productive activities. In many ways, the services that
smallholders receive thorough outgrower schemes are very similar to the services they received in
the past from government-supported programs that provided inputs, markets for outputs, credit
and technical assistance. In both cases there was a lack of development of commercially-oriented
smallholders rather than smallholders engaged in commercial activities.
The reluctance of poor and vulnerable households to invest in new and potentially risky ventures
is well known. Parker and Mwape (2004) note that: ―In this context, the mistrust rural Zambians
36
display toward new crops is based primarily on the difficulties they encounter in identifying
markets for these commodities, and on the wide fluctuation in market prices. These uncertainties
undermine the willingness of smallholders to invest in crops that cannot be stored and eaten if
unsold.‖
Also, with respect to outgrower schemes, Parker and Mwape (2004) note: Although the study did
not find communities that had refused contract farming outright, many said they would engage in
it only as long as it took to achieve a short-term goal such as roofing their house with iron
sheeting. The explanation may lie in the complaints heard from some villagers who had
undertaken these contracts. They feel that the labor required to produce these crops is harder and
more strenuous than that required to produce the preferred crop, maize. They also feel they get
too little payment for the harvested crop, and that they are often cheated. For example, the
payment for a paprika crop is determined by its quality or ―grade.‖ It is the contractor who
judges the grade, however; and there is no incentive for him to assess it as top quality. There is a
conflict of interest, therefore, in this arrangement. Nevertheless, these schemes were generally
described favorably as options that have raised some household incomes.‖
II.G. Summary of Key Points on Profile of Rural Poverty
From the various analyses presented above, there are some common issues about smallholders
that affect their potential for poverty reducing commercialization:
a) In rural areas, there is a remarkable homogeneity of conditions. The vast majority
of rural households are poor in terms of income/consumption poverty measures.
Thus, smallholders tend to be asset-poor and various shades of ―poor‖.
b) Rural households, including those who rank higher in terms of consumption, own
consumption of agricultural production contributes a major share to household
income/consumption.
c) In general, poorer households are constrained by the availability of labor and not
the availability of land. Household well-being is closely correlated to the
availability of household labor.
d) Households without a healthy adult are particularly disadvantaged. The poorest
households are those headed by an elder, child, widow or chronically ill person –
are usually unable to work for others or even to cultivate their own lands
e) There is a lack of human capital – notably entrepreneurial skills, and a lack of
affordable and dependable access to credit and input/output markets.
f) Locational factors such as agro-ecological zone, access to infrastructure and
proximity to population centers have a major influence on livelihoods. Factors
such as culture and attitudes are also important and often associated with locational
factors.
g) There are 3 basic groups of smallholders: 1) sub-subsistence, 2) marginal, and 3)
emergent/viable based on a combination of locational factors and household-
specific assets.
h) There is a need for at least 3 distinct strategies for smallholders households in
different areas of the country that include safety nets, a focus on food security and
natural resource management (e.g., conservation Farming), outgrower schemes and
other market-oriented activities. There is also a need to consider rural labor
37
markets and migration to rural towns and urban centers.
Different spatial and sectoral approaches and strategies are needed to deal with the different types
of rural households, with many requiring social protection and safety nets.
1. The very poorest and most vulnerable households will require long-term social
protection and safety net support. The needs of this group are for free or cheap
farming inputs, for example food relief and PAM, and agricultural and input packs
(fertilizer and seed). Most households in this group are almost certain to need
social protection measures on a long-term basis.
2. The very poor households that have the potential to achieve a poor but sustainable
livelihood, regularly marketing a surplus, with the eventual possibility of joining an
outgrower scheme. The approach to this group should be one of enabling and
supporting them through to a position of food security and viability (possibly
through applying Conservation Farming techniques), eventually capable of
producing a small marketable cash crop in addition to meeting their subsistence
needs. Eventually some may be able to join outgrower schemes. Others will
provide labor to emergent smallholders and/or find employment in rural non-
agricultural activities. Others will out-migrate to rural towns or urban areas.
3. Poor households with potential to become, or which have already become,
commercially viable small-scale farmers, either by joining an outgrower scheme or
marketing their surplus in the domestic market. The approach to this group should
be one of enabling and supporting them through to achieving stronger commercial
viability so that they increases profitability and maintain their viability, and do not
slip back to the previous group. The types of support and enablement they need
will be different to what is needed for the previous group: more support in
developing export market linkages, improved technology and infrastructure that
leads to greater efficiency and lower transaction costs in order to strengthen
comparative advantage. There is a need for pro-active methods to organize these
smallholders and improve their entrepreneurial skills.
II.H. Where and Who are the Potential Beneficiaries of Agricultural Commercialization?
There are different estimates on how many smallholders currently participate in outgrower
schenmes or other forms of contract farming. Some estimates indicate about 150,000-200,000
smallholders participating in cotton, tobacco, paprika, and vegetables. Outgrower schemes have
been rising rapidly and is the channel through which small farmers are participating in export
markets, particularly cotton. It is expected that before 2010, as many as 25% of the small farmers
would be participating in contract farming (Chiwele and Sikananu, 2004). This is then an
estimate of the number of small farmers with links to both input and output markets.
Thus, it seems that about 20-25% of all smallholder households currently participate in outgrower
schemes and there are others who have some past experience or are considering joining. From
the various classifications of rural households presented in this paper, it seems that about 30-40%
were classified as having more potential to be viable commercial smallholders. As pointed out
throughout the paper, it would seem that most of the households participating in outgrower
schemes are located in Agro-ecological Zone II (which is home to almost 40% of rural
households) or in Livelihood Zones 4A (Central Maize-Cotton, 5A Line of Rail Commercial
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Farming, 5B Eastern Province Cash Crop, 7B Chongwe-Nyimba Plateau, and 13 Mkushi
Commercial Block -- which zones account for about 3,604,00 out of an estimated 9,900,000
Zambians (about 36% of all rural and urban residents).
It is important to note that in discussions about Zone II and the equivalent livelihood zones, we
have not specifically addressed the need to consider the major urban areas of the Copperbelt,
home to about 1.8 million persons (consumers of agriculural products), in a broader spatial rural
development strategy that would include these urban markets that are well-connected by road/rail
infrastructure to the ―line-of’rail‖ high-potential agricultural areas. Also, the Copperbelt urban
areas are linked to markets in neighboring countries.
In any case, below we explore various ways to disaggregate smallholder households. The
suggested next step would be to discuss this issue with stakeholder in Zambia to try and allocate
the estimated number of households to the different groups, using, for example the following
classification schemes(or some other means of grouping smallholder households).
Table II. 11 Stylized Classification of High/Low Potential Areas and Households
Household (HH) Asset Portfolio
High Low
Location-Specific
Assets (agricultural
potential and access to
markets)
High High-High
―High Potential Area/
High Potential HHs‖
High-Low
―High Potential Area/
Low Potential HHs‖
Low Low-High
―Low Potential Area/
High Potential HHs‖
Low-Low
―Low Potential Area/
Low Potential HHs‖
The simple 2x2 typology in table II.11 generates the following classification of households:
HH Type #1: Welfare Cases: smallholders not succeeding as farmers, rural households