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Agricultural intensification in Mozambique:
Infrastructure, policy and institutional framework


Peter E. Coughlin
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EconPolicy Research Group

September 2006

SARPN acknowledges EconPolicy Research Group, Lda. as a source of this document: www.econpolicy.org
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Introduction

Unlike most African countries, Mozambique possesses a huge coastline, vast tracts of virgin arable land, and no landless peasants. But despite these advantages, it suffers extreme poverty. Colonialism trained exceptionally few Africans, left an infrastructure appropriate for serving the metropolis but, in large measure, inappropriate for the economic development of an independent state. Revolutionary war and, in their last days, the flight of most Portuguese (including manufacturers, merchants, and commercial farmers) were followed nearly immediately by a civil war that systematically destroyed the rural commercial and transport networks and educational and health systems and killed or displaced millions thus aggravating the economic disruption.

Finally, with peace in 1992, began the huge tasks of returning the refugees and rehabilitating, reforming and, eventually, expanding or creating systems, all systems, both physical and human. The process has been heavily state and donor driven. Within the framework of structural adjustment, the state rapidly privatized state enterprises, withdrew from directly productive activities, and eliminated controls over prices and markets. It also guided an evolving process of investment in infrastructure and systems, including decentralization, capacity building, and progressive reform, gradually enabling the country to merit confidence and support and to attract investment, first in the richer south and, more recently, in the poorer central and northern parts of the country. Thus, growth is quick and the economic possibilities are interlinked and fast evolving.

This is the shifting dynamic that confronts farmers and defines the possibilities and limits of agricultural development as reflected in their productive and technological choices. Blessed with abundant land but squeezed between low farm-gate prices and high input costs, the majority remain subsistence farmers sell little or nothing on the market, and those who produce for sale do so mostly without the benefits and risks of modern inputs. Though agricultural intensification is occurring among the farmers participating in the rapidly expanding contract-farming schemes, few others use pesticides, fertilizers and hybrid seeds. And, except for fallowing, crop rotation, and improved seeds or varieties (e.g., for maize, cassava, sunflower, and sweet potatoes), even the use of pre-industrial methods of intensification is limited, e.g., composting, manuring, small-scale irrigation, use of nitrogen-fixing crops, and integration between land and animal husbandry.

The situation, however, is far from static. Roads, electricity, and communication are expanding. Competition among input suppliers is also growing; agricultural price and supply information is more readily available; and, as primary, secondary, and feeder roads are built, traders are penetrating deeper into the countryside, initially as lone buyers and later in more open competition. Despite the problems of monopsony, false measurements, and lack of information and negotiating power, the farmers are being gradually enticed by the market, especially for the production and sale of cash crops. And, though nascent and far from uniform, there are initial signs that this is affecting both the scope and intensity of their activities.

Access to international markets is also changing. With the accelerated integration of the SADC market, especially after 2006, the regional markets will become yet more accessible, unlike Europe where increasingly strict sanitary and phytosanitary controls make exports problematic unless farmers and agrobusinesses in Mozambique invest substantially to ensure quality. Moreover, Europe and the United States are slow to respond to the pressures within the World Trade Organization to phase out numerous agricultural subsidies so inimical to the interests of developing countries. Overall, however, the trend is toward global trade reform and liberalization. To benefit, Mozambique must continue to make complementary investments to facilitate market access and stimulate production.



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