Proposed Agricultural Sector Reforms in the 2023 National Budget
Author: Rabecca Banda
14 October 2022
A review of the 2023 National budget has indicated, particularly in relation to agriculture, along with the subsectors of livestock and fisheries, a number of progressive reforms that the government intends to undertake in the coming year. With a view to adequately address this major sector of the economy, below is a summary of the proposed developments for enhanced agricultural productivity.
Dam construction for irrigation development
To enhance the development of irrigation in the country, the government has proposed the following measures:
- construction of 40 dams accross the country of which a total of 16 dams will be constructed within 2023; and
- Actualise the Chiansi Irrigation Scheme in Kafue which will be financed by the US$10 million that the government has procured from the African Development Bank and will cover 600 hectares infield irrigation by smallholder farmers (for the benefit of approximately 12,000 people).
Introduction of Comprehensive Agriculture Support Programme(CASP)
To enhance agricultural productivity, the government proposes to introduce the CASP which is an expansion and developed form of the Farmers Input Support Programme (FISP). The CASP will encompass extension service support; irrigation development; access to finance; support to value addition; and storage and logistics. It is intended to target small scale farmers and ensure equity in the provision of subsidies as well as services. To this end, the government has already secured market access to among others, the European Union, United Arab Emirates, South Africa, and China.
Revival of Farm blocks
On this aspect, the government intends to revive the development of farm blocks which will be between 50,000 to 100,000 hectares. To achieve the foregoing, the government has already secured financing of US $300 million from the World Bank which is concessional with a maturity period of 30 years and a grace period of 5 years.
In developing the farm blocks, the goverments key responsibility is to ensure that key infrastructure is placed on these farms such as main access and internal roads, power reticulation etc., which will enable investors get into production quickly with little time wasted on preliminaries.
With regards to infrastructure in the agriculture and livestock sector, the government has proposed to enhance disease surveillance, prevention and control. Therefore, specific interventions will include the construction of biosecurity infrastructure on trunk roads and completion of laboratories.
On the path to attracting investment into corn starch processing, the government is introducing income tax concessions for 15 years on income generated from local sales of corn starch by agroprocessing businesses operating in Multi-Facility Economic Zones, Industrial Parks or rural areas being:
- 0% corporate income tax for charge years 2023 to 2033;
- 50% relief on corporate income tax for charge years 2034 to 2036;
- 25% relief on corporate income tax for charge years 2037 to 2038;
Extension service Delivery
In order to increase production among small scall farmers, the government has proposed to recruit extension officers through which government will provide 1.5 million small holder farmers with extension services via physical visits and e- extension platforms with a view to increasing crop productivity among small scale farmers.
With these reforms in place, there is a potential of growth in the sphere relating to agriculture for both local and foreign investors. We will elaborate on each aspect in the coming days.