IDENTIFICACIÓN DE RIESGOS

Kenya and Zambia exhibit some similarities in their economies, agricultural sectors, and food security regimes. Except for recent signs of recovery in Zambia's economy, its rate of economic expansion was relatively slow during the 1980s and 1990s, and macro-economic challenges, such as high inflation, unemployment and weak investment, persisted during the same period. Kenya’s food supply and food security challenges persisted during the reference period. In spite of moderate growth in overall production, a gap between supply and demand in accessing the main cereals was common. The pace of maize liberalization was slow and there was widespread institutional failure. The portion of prices received by maize farmers was significantly low; often undercut by the middlemen institutions such as the NCPB.

Among the macroeconomic challenges exerting pressure, the rate of inflation was particularly critical. The rate of inflation, which remained high, was made worse by the fixed exchange rates preferred by the governments. In practice, rising inflation rates do not work well with fixed exchange rates. There is a tendency to incur a balance of payments deficit; fixed exchange rates are not sustainable during an inflationary period.

The economic mismanagement of the maize marketing schemes was strikingly similar. The stop-and-go approach for both domestic and external maize trade liberalization attempts provided sufficient room for corrupt government officials, often at the behest of the ruling government, to participate in maize trade with huge financial gains. The institutions which oversaw input and output markets were similar in both Kenya and Zambia. State monopoly of

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the procurement of agricultural inputs and outputs impeded full entry of the private sector into the market. As a landlocked country without direct access to its own harbor, Zambia incurred heavy transportation cost and transferred these costs to the final consumer, agricultural producers.

The widespread consumption of maize by a majority of people in both countries makes a comparative analysis of maize supply relevant, particularly due to the fact that it is considered as a proxy for food security. Prior studies on food security have emphasized the weight of maize as a core determinant of food security (Jayne, 1997; Jayne, 1997 & 2002;

Seshamani, 1998). While other variables are important indicators of food security in these countries, following the trend of a proxy food security measure provides an important indication of overall access to food. There are other remarkable demographic differences between the two countries which facilitate their respective food security conditions. The portion of the population that resides in urban areas, including small towns, is relatively higher in Zambia than it is in Kenya. The location and activity of the population influences a government's food security planning and strategies in any given period. The presence of a larger concentration of residents in towns and cities, as is the case in Zambia, might imply decreased agricultural activity.

Research and investment aimed at the development of maize hybrid varieties has been ongoing in Zambia since the 1960s, and these varieties were introduced to the smallholder sector during the 1970s (Kumar, 1994). The most common hybrid varieties in Zambia are ZH1, SR11, ZCA, SR52, and SR13. SR52 offers the most yield advantage over local varieties, particularly in its response to fertilizer, and commands 90 percent of the commercial seed market. The remaining 10 percent of the commercial market share is held by ZH1. However, both hybrids are long-duration varieties requiring 170 days to mature, which makes it critical to plant them early in the season.

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Figure 8. Agricultural production and import indices (Zambia): 1961-2005

It can be concluded from the Figure 8 that Zambia is not a strong participant in cereals trade based upon it low trade turnover prior to early in the year 2000. It is clear from the maize production figure that the government of Zambia continued to face two policy challenges with regard to maize production. First, there was the need to maintain remunerative prices that would encourage farmers to continue producing enough for the market. Secondly, policy-makers were faced with the task of mitigating maize mealy prices, mainly for urban consumers. Reigning in prices also serves the interests of rural consumers who are net buyers of maize.

The role of cereals must be viewed against the overall trends in food production and consumption of the entire South-Eastern region of Africa. Kenya has moved from being a net exporter of cereals, particularly maize, to being a net importer. The surge in imports has always remained high during the drought seasons. In terms of population density and the proportion of arable land utilized, Kenya has maximized the percentage of cultivated land as a percentage of the estimated potential of arable land (Byerlee & Eicher, 1997). Intensive agricultural production techniques are considered essential in increasing the domestic cereal production and in meeting the domestic cereal demand. Reclaiming arid and semi-arid areas in order to increase production has not achieved any substantial yields. This trend has

050100150Index (1989=100)

1960 1970 1980 1990 2000 2010

Year

Import Production

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remained cheaper than the cost of reclaiming arid land or acquiring the appropriate technology necessary for irrigation or storing water storage during periods of extreme drought.

The demand for cereal imports continues to be steady. In Zambia, the commercial demand for maize, and the resulting political pressure to improve the policy and organizational environment led to the reorganization of the state delivery of maize, an important political weapon for most Zambian administrations. Demonstrating a political interest in the rural and urban poor and their food demands was a valuable means for politicians to remain popular.

Demand for maize in the urban areas of Zambia was a major catalyst for the replacement of traditional over-pollinated varieties with improved higher yields. After independence, maize development programs played an important role in solidifying political support, particularly for urban and rural residents who neglected during the colonial period. The government encouraged farmers to grow sufficient output in order to supply urban residents with cheap maize mealy, a form of maize.

Figure 9. World Maize production: 1961-2008

Aggregate productions trend upwards, indicating that the global supply during the reference period is on the rise. The graph in Figure 9 summarizes the global trend in maize production.

02.0e+084.0e+086.0e+088.0e+08Quantity in metric tons

1960 1970 1980 1990 2000 2010

Years

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The rise in global production may not essentially be representative of individual country production trends. Instead, the global food markets, most commonly the demand for animal feed, is a particularly one of the important factors that drive production. These global conditions strongly affect domestic production and domestic prices overall.