Lesotho

Special report: FAO/WFP crop and food supply assessment mission to Lesotho

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Assessment
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Mission Highlights
- Domestic cereal supply in 2002/03 is estimated at 74 000 tonnes, while total national consumption requirement is estimated at 412 000 tonnes. This results in an import requirement of 338 000 tonnes. Commercial imports are estimated at 191 000 tonnes and food aid at 147 000 tonnes which needs to be met by the Government and external assistance.

- The mission estimates that a total of 444 800 people throughout Lesotho will require emergency food assistance. The districts hardest hit by this year's poor harvest are Qacha's Nek, Quthing and Mohale's Hoek. Not all individuals will require food assistance for the whole year and, therefore, assistance needs to be carefully targeted and phased so as to avoid disruption of domestic markets. Overall, the Mission recommends targeted emergency assistance of approximately 68 955 tonnes of food, including maize, pulses, vegetable oil and iodised salt. The GOL has already allocated 5 400 tonnes of maize for distribution to the most vulnerable people.

- Emergency provision of agricultural inputs such as seeds is recommended to enable disaster-affected farming families to restart agricultural production during the next main planting season starting in October 2002. Promotion of seed multiplication and horticultural production are recommended measures to further improve food security at household level.

- Agriculture in Lesotho faces a catastrophic future. Crop production is declining and could cease altogether over large tracts of the country if steps are not taken to reverse soil erosion, degradation and the decline in soil fertility. Crop yields are generally very low and declining. In the mid 1970s average maize and sorghum yields were in the order of 1 400kg/ha, but today they average 450-550kg/ha.

1. OVERVIEW

Lesotho faced severe weather variability for the second year in a row, characterized by heavy rainfalls, frost, hailstorms, and tornadoes. The erratic timings of rainfall and frost severely affected crops at planting time and during their critical development stages. Heavy rainfall in October and November delayed or prevented planting of crops in many areas and frost in March curtailed the end of the growing season. The Government of Lesotho, anticipating another poor harvest, declared a state of famine and requested FAO and WFP for assistance in reviewing the country's food situation and outlook for the 2002/03 marketing year. Consequently, an FAO/WFP Crop and Food Supply Assessment Mission was fielded from 25 April to 4 May 2002 to estimate the current season cereal production, assess the overall food supply situation and forecast import requirements for 2002/03 marketing year (April/March), including food assistance needs. A representative of Southern African Development Community (SADC) Regional Early Warning Unit (REWU) participated in the mission as an observer.

The Mission received full cooperation from the Ministry of Agriculture, Cooperatives, and Land Reclamation, Ministry of Economic Planning, Disaster Management Authority, Ministry of Industry, Trade and Marketing, and Bureau of Statistics. Discussions were also held with relevant UN agencies including UNICEF, WHO, UNDP, as well as donor representatives, NGOs, and grain importers. The Mission split into two groups and was able to cover all the ten districts of the country. Interviews were conducted with each District's Principal Secretary and staff from crops, livestock, extension, disaster management, nutrition, and health divisions to get information and their assessment of the situation within their districts. Interviews were also conducted with Village Chiefs, households farmers, and traders. Overall, more than 120 interviews were conducted during the course of the mission.

The Mission forecasts 2001/02 cereal production at 53 800 tonnes. Maize production is estimated at 34 500 tonnes, wheat at 14 100 tonnes and sorghum at 5 200 tonnes. Other crops such as beans, potatoes and peas were also observed on most farmers' fields that contribute to the diet of families and cash incomes when grown in larger quantities. The Mission used last year's FAO/WFP assessment mission figures for comparison of cereal production levels. On this basis production for this year will be 33 percent lower than the already reduced production last year. The Mission estimated the total cropped area of 133 600 hectares, about 60 percent of the area in normal years. The drop was partly due to heavy and widespread rains during the land preparation and planting period. Large areas in the lowlands with impermeable clay sub-soils were water-logged and took considerable time to drain and dry for tractors and machinery to operate, coupled with a shortage of tractors and oxen for ploughing in many areas.

With an estimated total domestic cereal supply of 74 000 tonnes, and total utilization requirement of 412 000 tonnes (Table 5), the country faces a shortfall of 338 000 tonnes for 2002/03 marketing year. Commercial imports are estimated at 191 000 tonnes, and food aid at 147 000 tonnes, which needs to be met by the Government and external food assistance.

The mission has estimated that a total of 444 800 people throughout Lesotho, but particularly in the districts of Qacha's Nek, Quthing and Mohale's Hoek which have been the hardest hit by this year's poor harvestwill require immediate emergency food assistance. Total emergency food assistance is estimated at approximately 68 955 tonnes of food, including such commodities as maize, pulses, vegetable oil and iodised salt.

Different approaches to food distributions need to be examined. In less affected areas, self-targeting through food-for-work may be more appropriate than free distribution. In the worst affected areas free distribution will be required.

Agriculture in Lesotho faces a catastrophic situation: crop production is declining and could cease altogether over large tracts of the country if steps are not taken to reverse soil erosion, degradation and the decline in soil fertility. The foothill and mountain areas are unsuitable for intensive cropping due to their fragile and poorly structured soils and should concentrate on livestock production. Crop yields are generally very low and declining; in the mid 1970s average maize and sorghum yields were in the order of 1 400kg/ha but today they average 450-550kg/ha.

2. ECONOMY

The Kingdom of Lesotho is a landlocked mountainous country of 30 355 km2 that is completely surrounded by South Africa. The entire country lies 1 000 meters above sea level with mountains reaching well over 3 000 meters. Only 406 500 ha (13 percent) of the total land area is arable, the remainder being mountainous1. The country is divided into four agro-ecological zones and ten administrative districts. The Lowlands is the most populated and intensively cultivated zone, followed by the Foothills, the Mountains, and the Senqu River Valley which is the smallest zone. Climatic conditions also vary widely by region and altitude - 85 percent of rainfall occurs from October to April, while snow occurs in the mountains from May to September.

Lesotho's economic performance over the last decade has been relatively mixed. The early to mid 1990s saw an economic boom that was driven by the construction of the Lesotho Highlands Water Project and the expansion of the manufacturing sector. The GDP grew at an annual average rate of 6.3 percent. However, there was a severe contraction in GDP growth in 1998-99 resulting from civil unrest. Growth resumed in 1999-00 and 2000/01, but at a slower pace of 2.4 percent and 3.2 percent, respectively. It is expected that the growth rate will remain around 3 percent for the current fiscal year. Major contributors to real GDP growth in 2000/01 were agriculture (15 percent), manufacturing and construction (40 percent) and services (36 percent).

The budget for fiscal year 2002/03 projects a deficit of M423.5 million before grants-5.5 percent of GDP. However, after grants the deficit drops to M28.1 million. Major budget allocations include 22 percent for education, 8.2 percent for health, and 4.8 percent for agriculture.

The latest IMF review of Lesotho's economic performance under the three-year Poverty Reduction and Growth Facility (PRGF) programme was generally favourable. Of the SDR24.5 million (US$31 million) available under the programme, SDR 10.5 million has been released. IMF has acknowledged the

Government's overall commitment to the programme and the fact that all quantitative performance criteria have been met.

Lesotho has been steadily improving its revenue collection, particularly of income tax, with relatively stable customs revenues (Figure 1).


Figure 1: Central Government Revenue Generated by Customs and Income Taxes

Source: Central Bank of Lesotho, Bureau of Statistics


Under the Southern African Development Community (SADC) Free Trade Area Protocol signed in 1996, Lesotho is committed to gradually removing import restrictions and tariffs over a period of 8 years. The loss in customs revenues is projected to reach 17 percent by the time the Protocol is fully implemented. The recent trade agreement between the European Union and South Africa will further increase the fiscal deficit, as the country will lose its share of revenue from the Southern Africa Customs Union (SACU).

Lesotho's current account deficit in 2000/01 improved by 30 percent and the capital and financial accounts together declined by 16 percent, resulting in a relatively better balance of payments position than in 1999-00. However, there still remains a significant trade deficit. The total export earnings average around 25 percent of total imports (Figure 2). The main exports are textiles, footwear, mohair and some live animals.


Figure 2: Imports and Exports of Lesotho 1997/98 to 2000/01

Source: Central Bank of Lesotho, IMF Country Report 2002


The external debt stood at US$ 546.7 million at the end of fiscal year 2000/01. The multilateral component was 76 percent, bilateral 11 percent, and commercial 14 percent. The external debt to GDP ratio was 62.8 percent, and debt service as a percentage of total export revenue was 13.2 percent. Official foreign exchange reserves remain above the target floor set by the Central Bank, at 7.4 months of imports of goods and services.

Lesotho's currency, the Maloti, which is pegged at par with the South African Rand, has been declining against the dollar since 1998-1999. During the fiscal year 2001/02, the Moloti fell over 38 percent against the US dollar. Commercial bank lending interest rates during the fiscal year 2000/01 ranged between 16-25 percent.

The average unemployment rate for Lesotho is about 30 percent, but is higher in the rural areas. The economy has only been able to absorb about a third of individuals entering the work force every year. The unemployment situation is exacerbated by the continuing retrenchment of Basotho workers from South African mines (Table 1). Since 1991 the number of Basotho working in South Africa has declined by about 50 percent.


Table 1: Number of Basotho Working in the South African Mines (1991-2001)

Year
Number of Workers
Year on Year Change (%)
1991
122 188
1992
119 596
-2.1
1993
116 129
-2.9
1994
112 722
-2.9
1995
103 744
-8.0
1996
101 262
-2.4
1997
95 913
-5.3
1998
80 445
-16.1
1999
68 604
-14.7
2000
64 907
-5.4
2001
59 900
-7.7
Source: IMF Country Report 2002

3. FOOD PRODUCTION IN 2001/02

The agricultural sector in Lesotho is facing extremely serious structural problems. The key issues are severe soil and land degradation, lack of proper land and crop husbandry practices, limited use of improved seeds, fertilizers and pesticides, and almost non-existent extension services. Without serious long-term interventions, it is highly probable that crop production will completely cease on large tracts of agricultural land. Lesotho's last agricultural census (1999/00) highlighted the fact that the country's cultivated land has increased from 317 900 to 406 500 hectares between 1989 and 2000, with the increase attributed to extension of cultivation to marginal lands that were previously fallow/grazing land.

3.1 Agro-meteorological conditions

Unexpected heavy rain fell in late August over most areas of the country, which benefited some early land preparation for the summer cropping season. October was characterized by very wet conditions, particularly during the last ten days, which restricted land preparation and planting activities.

November rainfall was normal to above normal in most areas, but was particularly heavy during the first two dekads, further delaying crop establishment, especially in southern districts. Rainfall remained above normal in December and this trend continued through January. However, February was generally dry throughout the country with erratic rainfall (Figure 3). On a cumulative basis, rainfall was above normal for the 2001/02 season, but quantities and distribution were erratic and delayed planting of crops. A widespread frost in March severely affected crops in most districts, and localised hailstorms exacerbated the problem.

Footnotes:

1 Lesotho Agricultural Census 1999-2000. Volume 1: Rural Households and Crop Statistics. Bureau of Statistics (BOS), Lesotho.

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