Mozambique

Special Report: FAO/WFP crop and food supply assessment mission to Mozambique 14 Jul 2004

Attachments

Mission Highlights
Despite late and erratic rains early in the season, regular precipitation from January through May, enabled replanted cereal crops to reach maturity and, in the southern provinces, encouraged extended plantings of maize.

Cereal production for 2004 is estimated at 2 million tonnes, 11 percent above last year's relatively good performance. The main maize crop increased substantially, while rice was affected by dry weather.

After four consecutive bad years, southern provinces had a bumper cereal crop. In the north, estimated production is similar to last year's while the record is mixed in the centre.

Cassava cultivation has expanded and will reduce food insecurity in areas where the maize crop was adversely affected by irregular rains. Higher incomes from the expansion of industrial crops are also contributing to food security among rural households.

Overall, food production has been satisfactory, but localized areas did suffer from reduced harvests.

Although maize prices fell at harvest time, they had reached by May a higher level than a year ago, reflecting lower production in some surplus areas, strong export demand and a delayed harvest.

Maize exports, formal and informal, are forecast to increase in 2004/05 (April/March) in response to strong demand from Malawi, where higher prices prevail.

However, maize imports are still necessary, given the high costs of moving grain from north to south. Total cereal imports, including rice and wheat, are forecast to be 10 percent lower than last year.

An estimated 49 000 tonnes of cereal relief food aid will be required in 2004/05, for about 187 000 people recovering from a succession of flood/drought shocks combined with the impact of HIV/AIDS.

1. OVERVIEW

Following four poor harvests in southern provinces and parts of the central provinces caused by drought or floods, an FAO/WFP Crop and Food Supply Assessment Mission (CFSAM) visited all the production areas in the country from 29 April to 20 May 2004. The Mission evaluated food crop production in the 2003/04 agricultural season, assessed the overall food supply situation, forecast cereal import requirements and possible exports in marketing year 2004/05 (April/March) and determined the eventual food aid needs.

As on previous occasions, the Mission received support from the Ministry of Agriculture and Rural Development (MADER), which provided preliminary production forecasts for this year's agricultural season and technical staff to accompany the Mission on its field visits. Staff from National Institute of Disaster Management (INGC) and Ministry of Industry and Commerce (MIC), and observers from the Southern Africa Development Community (SADAC), the European Union (EU), the United States Agency for International Development (USAID), the Famine Early Warning System Network (FEWS-NET) and NGOs also joined the Mission.

Prior to departure to the field the Mission was briefed by representatives of FAO and WFP and by government officials, who provided information on the current situation in the country. A meeting with donors and NGOs also provided valuable information, particularly on the situation in the districts where they work.

The Mission, divided into four groups, travelled for almost two weeks to 45 districts in all northern, central and southern provinces. This year, the districts to be visited were carefully selected using a range of criteria including agro-ecological, marketing and vulnerability considerations. In the districts, sub-teams were organized to provide larger coverage of the areas. In each province and district, the teams met with administrative authorities and with representatives of Agriculture, Health and Commerce Ministries, as well as NGOs working in the various areas. After these meetings, the sub-teams travelled to selected production areas to conduct interviews with farmers, carry out field inspections and make crop cuttings to estimate yields. The Mission also visited markets and interviewed a wide range of traders.

The preliminary assessment of the season provided by the Early Warning Unit of MADER, and pre-harvest data on area and yield for food crops gathered at MADER provincial and district levels, were analysed by the Mission and cross-checked against qualitative information from farmers, traders, NGOs and international agencies working in the agricultural sector. Information on growing conditions, pest and disease status, rainfall, prices and input supply obtained during the field visits were triangulated with remote sensed and field monitored data from FAO and WFP offices in the country. The work of the Mission was complemented with the March survey of the Vulnerability Assessment Committee (VAC) to 4 950 households in 11 regions of the country previously affected by an emergency situation, which, among other objectives, aimed to determine food assistance needs for the 2004/05 marketing year. The CFSAM and the VAC teams worked together to analyze data prior to and after the CFSAM field work in order to ensure the concordance of the two assessments.

In general, rains this season started late and were irregular until late December and in some regions until January. Improved rainfall was received only after January and it continued in a more regular fashion through April, especially in the south and central regions. Exceptions to this pattern were areas of Zambezia province, where the interruption of rains lasted until March. Although there were significant differences by regions and districts, in general the northern, interior and high-altitude areas of all provinces received better rains than the southern and coastal parts.

Farmers had to replant twice and three times, but availability of local seeds, from the previous season's production, was not a major problem. Seed fairs conducted across the country in localities with a poor harvest last year, as well as programmes to promote cassava and sweet potatoes cultivation, had noticeably a positive impact on production. While improved seeds, fertilizers and pesticides are generally used only on cash crops, through company credit schemes, tobacco companies also provided their growers with maize hybrids seeds to a limited extent. However, as tobacco and cotton are grown in rotation with maize, the area with residual fertilizer for follow on cereal crops is significant in some provinces.

The most serious pests this season were those already reported in previous years and include brown streak and mosaic viruses in cassava, (particularly in Nampula province coastal district of Memba), odium in cashew, cassava mealy bug, leaf miner affecting groundnuts, and large grain borer in maize. The use of insecticide and fungicides to control these problems continues to be limited. In northern areas, the most serious pests were wild animals, in particular elephants, which caused substantial damage to crops in Cabo Delgado province.

National cereal production (maize, sorghum, millet and rice) in 2004 is estimated at 2 million tonnes, 11 percent above last year's level. Maize, accounting for 72 percent of the total cereal output, is estimated at 1.4 million tonnes, 15 percent up on 2003. This increase mainly reflects a dramatic recovery of production in the southern provinces and in the important central growing province of Manica. By contrast, the paddy crop, which was the most affected by lack of rains in the first part of the season, is estimated 12 percent lower than last year at 177 419 tonnes. Sorghum/millet output rose 8 percent to 390 494 tonnes. The production forecast for cassava is 6.4 million tonnes (fresh weight), 4 percent higher than in the previous season.

Overall, a bumper cereal crop was obtained in the southern provinces, while production was similar to last year's good level in the northern provinces. In the central provinces, cereal output increased, with the higher production in Manica province more than offsetting lower returns in Tete and Zambezia provinces.

Despite the overall satisfactory food production, the harvest was reduced in pocket areas, mainly in the southern districts of Tete province, remote areas of Manica province, some localities in southern provinces and coastal areas of Nampula province.

Cassava production and consumption have increased in recent years following promotion programmes carried out by the government and international agencies. Substantial quantities of cassava will be available for consumption during the marketing year 2004/05 and this will moderate the impact of reduced maize crops in several areas. However, the Mission's field observations suggest that official production figures underestimate cassava yields and, therefore, it is recommended that a comprehensive study of cassava harvesting and utilization be made.

Abundant grazing following the continued rains this season, together with the absence of major animal diseases, except for Newcastle disease of poultry, have resulted in generally good livestock conditions.

Industrial crops, mainly tobacco, cotton, cashew, coconuts, tea, paprika, soybeans, sesame, sunflower and citrus are undergoing an expansion that is contributing substantially to household food security and boosting agricultural exports.

The marked regional differences in maize production and consumption, coupled with high cost of moving the crop from the surplus northern and central provinces to the deficit South, are reflected in the high price differentials among regions. At the time of the Mission, the price of maize in the southern Maputo market was almost twice as much as in the central Manica province.

In all regions maize prices were declining with the arrival of the new crop. However, by May, they were higher than at the same time last year in central and southern markets, partly reflecting the delayed harvest, but also strong demand from bordering southern provinces of Malawi, where harvests have been reduced, and a slight decline in production in the surplus provinces of Tete and Zambezia. Traders interviewed by the Mission in these provinces reported slower procurement and lower volumes of maize in the markets this season. In spite of this, the Mission nonetheless observed substantial flows of informal exports of maize into Malawi attracted by higher prices, in particular from the border location of Milange. Formal and informal exports of maize, mainly to Malawi but also to bordering areas of Zambia, are forecast by the Mission at 170 000 tonnes.

Imports of maize for southern deficit provinces, resulting from the high costs of moving the crop from the north to the south and the proximity of the southern provinces to the competitive South African market, are forecast at 140 000 tonnes, including reduced quantities of food aid. As the country has a structural deficit in rice and wheat, imports of these commodities are estimated at 325 000 and 320 000 tonnes, respectively. These amounts include programme food aid to be monetized in the market and minor quantities of rice pledged for WFP development projects. In aggregate, total cereal imports in 2004/05 (April/March) are forecast to decline 10 percent from the previous year as a result of the improved production in the South and reduced food aid distributions.

The results of the VAC survey, which were cross-checked with those of the CFSAM, indicate that, notwithstanding the favourable national production of this year, 187 000 people will still require 49 000 tonnes of cereal relief food aid in marketing year 2004/05 (April/March) to recover from the droughts and floods of the past several years, as well as to cope with the continuing impact of HIV/AIDS. Most of these requirements will be covered with carry-over stocks and through already contracted local purchases of maize. However, there is still a deficit of 14 000 tonnes of maize in WFP food aid pipeline. Distributions of relief food aid for the period July 2004-March 2005 are estimated at 33 368 tonnes of cereals and 13 499 of non-cereal commodities.

HIV/AIDS continues to be a severe problem in the country, particularly in the central and southern regions. The latest HIV estimates suggest infection rates of 13.6 percent at national level, with much higher prevalence in urban populations in Gaza, Manica, Tete and Zambezia provinces when compared to the rural estimates.

2. ECONOMY AND AGRICULTURE

2.1 Economy1

With a total area of 786 300 km2 and a population officially projected at 18.9 million in mid-2004, Mozambique has a relatively low population density. It is richly endowed with natural resources, including arable land, forest, grasslands, inland water, marine fisheries, minerals and hydroelectricity. As a result, the economy is diversified, and agriculture, transport, manufacturing, energy, fisheries, tourism and wage remittances all make important contributions to the economy. Following the rapid growth of the industrial sector in the past few years, the share of agriculture in GDP in 2002 ranked only third (21.1 percent); however, the sector still employs around 80 percent of the total labour force. At the same time, exports of prawns and fish, cotton, sugar, timber and cashew nuts are important foreign exchange earners, although they have lagged behind aluminium and electricity in recent years.

Market liberalization policies have been implemented since 1992 in cooperation with the IMF and the World Bank. Under a poverty reduction and growth facility (PRGG), renewed at the end of 2003, Mozambique continues to benefit from debt relief and renewed loans. At the same time, foreign grants continue to cover about one-half of public expenditures. The economic reforms have been remarkably successful in terms of macroeconomic indicators, even though the country started from a low base. Sustained by strong foreign investment, real GDP growth has averaged 9.3 percent in the period 1998- 2002, notwithstanding the severe economic set back caused by devastating floods in 2000. Preliminary estimates indicate a further 7 percent increase in 2003 and a projected growth of 7.2 percent in 2004. Inflation, which fell to 15 percent in 1997 from over 50 percent the previous year, stood at 13.8 percent in 2003 and is forecast to decline again this year. Exports have almost tripled between 2000 and 2003, while the exchange rate against the US dollar has remained relatively stable after the devaluation in 2000.

Despite all these gains, the impact on employment and incomes has been limited, as economic growth has mainly stemmed from a few large capital-intensive projects, with the support of huge inflows of foreign investment. This includes the Mozal aluminium smelter in Maputo, whose production is oriented mainly to the European market; the natural gas pipeline from the coastal port of Beira to South Africa; the rehabilitation of the power lines from the Cahora Bassa hydroelectric dam to South Africa and Zimbabwe; and several projects funded by donors for road construction and other activities.

According to the 2003 Human Development Report of the United Nations Development Programme (UNDP), Mozambique ranks 170th out of 175 countries in the human development and the human and income poverty indexes, coming before only Burundi, Mali, Burkina Faso, Niger and Sierra Leone. Although poverty remains high by all standards, some progress in poverty reduction has been achieved in recent years as a result of sustained economic growth coupled with the Government's road construction and rehabilitation programme and investment in social sectors. A recent official study on poverty incidence suggests that the percentage of total population falling below the absolute poverty line has decreased by 15 percent, from 69 percent in 1997 to 54 percent in 2003. Results of the study also show that poverty is higher in the southern provinces, where rates have actually increased somewhat. As part of the Government's poverty reduction strategy for the period 2001-2005 (Plano de Accao para a reducào da pobreza absoluta, PARPA), promotion and development is planned in six priority areas with a key impact on poverty: education, health, agriculture and rural development, basic infrastructure, good governance and macro-economic and financial management.

2.2 Agriculture

Forty-five percent of Mozambique's total land area is suitable for agriculture, but only 11 percent, 4.09 million hectares, is estimated to be cultivated. Farming is conducted mostly by some 3.4 million peasant families, a small but growing number of commercial farmers cultivating 60 000 hectares and refurbished agro-industrial units growing 30 000 hectares of sugar-cane. Consequently, agriculture provides food security and an important source of income generation for the vast majority of the 19 million inhabitants.

Tree crops, grown within the peasant farming systems, provide an important source of foreign exchange earnings each year including coconuts (265 000 tonnes) and cashews (58 000 tonnes). Other major cash crops include sugar-cane (212 000 tonnes sugar) and seed cotton (50 000 tonnes). These, along with tobacco, citrus and horticultural crops, particularly tomatoes - all of which have expanded significantly in the past two years - help generate revenue.

From the above, it may be inferred that Mozambique's diverse soils and climatic conditions, influenced by latitude, variations in altitude, topography and the proximity to the coast, offer a wide range of production opportunities. However, as agricultural systems are predominantly rainfed, the temporal and spatial distributions of rainfall are critical to crop performance, resulting in wide-ranging fluctuations in annual crop harvests from year to year.

The main production season extends from September to March in most parts of the country, with a short second season in the south from April to August. The farming system is characterized by aggregations of near-subsistence farm-families holding 1.2 hectares each on the average, who practise manual/animal-traction cultivated bush fallow, the intensity of which varies with the population pressure.

The use of purchased agricultural inputs, (improved seeds, fertilizers and pesticides) is limited to a small number of modern farm enterprises growing cash crops and vegetables and outgrowers of tobacco and cotton-producing crops on contract. The yields of cereals in the peasant sector are generally low, and losses in the field and stores are high.

Maize and cassava are the major staples; other crops of significance include sorghum, beans, groundnuts, millet and rice. Cassava is grown mainly in the north and southeast where it is the main staple, but it is being introduced along with sweet potatoes under a government initiative in drought-prone areas throughout the country. The effect of this introduction is already being appreciated by communities whose food security was regularly threatened by insufficient or untimely rains until now.

Livestock numbers are low, as herds have yet to recover from the losses incurred during the civil war and, in southern provinces, from the devastating floods of 2000. Cattle, goats, sheep and pigs are reared in extensive grass-based (ruminants) or back-yard scavenger systems. There is, however, a small modern poultry industry emerging, augmenting backyard production and servicing some of the demand for broilers in the main towns.

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