The Chairman for the Poultry Association of Zambia,
Distinguished invited Guests
It is a great honour for me, to be accorded this opportunity to grace this occasion by delivering this statement. I must begin by tendering apologies from the ZNFU President, Mr Jervis Zimba who is unable to be here today because of another engagement in Livingstone. Many of you know him well as a Poultry Farmer, and no doubt he would have loved to be here today to interact with you all and hear the concerns of the poultry industry first hand. Nevertheless, the ZNFU remains committed as ever before to defend the plight of poultry farmers.
The ZNFU pays particular attention to gatherings such as this one today, because it is an opportunity for the Union to listen to the members and get a sense of what the priorities that will take this industry forward should be. I am therefore very delighted to be here today.
Looking back at the past year, the challenges have been enormous for the agricultural sector as a whole and even more so for the Poultry Industry. On the economic front, developments in the global markets have had negative effects on our economy. After a long period of relative economic stability, we have seen the situation change for the worse. The exchange rate has depreciated rapidly, costs of production have risen and bank interest rates have increased. These developments point to an inevitable increase in prices of the products we produce. However, we are all aware that there is usually resistance to any increase in prices and in this regard, it is seldomly appreciated that if farmers cannot recover their production costs, the returns disappear and production declines. It is for this reason that the Union has been championing the call to explore ways of reducing production costs that farmers face especially where these costs can be influenced by Government.
We are also aware that the livestock aspects of agriculture which include poultry, for a long time were accorded very low priority. Yet, the livestock industry has great potential in terms of its contribution to employment creation for small scale producers and towards export earnings.
The Union has remained alive to all these issues and has continued lobbying the authorities for action. It was for this reason that the Union fought hard for the inclusion of Livestock to become part of the Private Sector Development Programme. We are pleased that through these efforts we have started to see a positive change towards livestock issues. For the first time a Minister in Charge of Livestock was appointed. We believe that this is a step in the right direction as it gives hope that livestock issues will begin to receive the deserved attention. In addition, we saw Governments’ response to the 2009 ZNFU budget submissions which had requested for increased funding towards agriculture and the livestock sub-sector in particular. The national budget allocation for livestock was increased to K70.7 billion for this year compared to K29.2 billion in 2008. The Union has also been lobbying for the enactment of a Poultry Act to regulate the entire poultry industry as a matter of priority.
We are also aware of the significant increase in stockfeed prices which has taken place because of reduced soya beans production in the country. In this regard, the ZNFU provides a platform for stakeholders to develop positions that should encourage prosperity for all players in the commodity value chain. We would like to encourage you all to utilize this platform to champion industry consensus, on critical issues that affect the entire industry, as opposed to championing positions suitable for one segment of the industry. I am sure you will all agree with me that in the past we have had experiences where businesses have suffered when one segment of the industry focuses on short term gains, then only to suffer in the long term when other players in the value chain cut back production.
As indicated earlier, the Poultry Industry can make a significant contribution to job creation and export earnings through exports into the region. However, this will only be possible if our products are competitive when they land in the regional markets. In this regard, the union has been advocating the following;
· The need to reduce VAT to zero on all agricultural products. In the case of Poultry, this would remove the 16% VAT charged on some inputs which would reduce the production costs, making poultry products cheaper hence more competitive.
· The Union has submitted a reaction to the Energy Regulation Board (ERB) on the proposed 66% upward revision of the Zesco tariffs requesting for a significantly reduced adjustment in view of the prevailing difficult economic environment. We are currently waiting for the ERB Public Hearing on the Zesco proposal.
· The Union worked closely with officials from the Ministry of Local Government and Housing to prepare recommendations on how agricultural commodity levies should be determined so that such levies do not become prohibitive to farming. Implementation is still being awaited.
· On international trade, trade agreements continue to be negotiated and signed by government. These agreements open up local products to competition as imports gain greater access to local markets and in reverse, local products are expected to gain through cheaper imported inputs with no import duty and access to larger markets through exports hence boost local production. However, reality has shown that implementation of free trade agreements should be properly sequenced by support to develop capacities of local producers so that they can break into the export markets. In addition, government should not shy away from protecting certain industries where it is justifiable to do so. Failure to do so could wipe out emerging local production and the corresponding value chain businesses. Government should therefore target its support in these critical areas if local producers are to benefit from these opportunities.
As I conclude my remarks, may I take this opportunity to endorse the theme for this AGM “RETURN TO PROSPERITY AND PROFITABILITY”. This theme is appropriate, in view of what the poultry industry has been going through, because it gives us all a sense of hope that the deliberations of this gathering, will contribute positively towards restoration of growth in the poultry industry. We look forward to the proceedings and together chart the way forward through action.
I take this opportunity to thank you for the invitation.
ZNFU 2nd Vice President