Draft Report-Oilseed Value Chain and Climate Impact Study (2)-clean(click to read the whole document)
Zambia is currently experiencing rising demand for edible oils. The local edible oils supply is not meeting the demand and thus the shortfall in supply is apparently being met through imports. The rise in imports is undermining prospects for growth of the domestic oilseed industry, which has experienced substantial investments in the processing capacity. Several stakeholders in the Zambian oilseed subsector are therefore facing a number of challenges, which have been presented to the Ministry of Agriculture (MoA): seeking for the MoA’s intervention in resolving them. The concerns involving edible oils were primarily raised by members of the Crushers and Edible Oil Refiners Association (CEDORA) and the Zambia National Farmers Union (ZNFU).
The notable challenges raised were:
(i) Toll-Processing: This is a case in which traders who have no processing equipment apply to import crude edible oil to be processed on their behalf by other industry players who have processing facilities;
(ii) Importation of bulk refined edible oils by some processors but disguised as crude oil; and
(iii) Increase in local prices and price fluctuations of edible oils.
In addressing challenges in the various agricultural subsectors or industries, the MoA has adopted an industrial consensus approach. Through this approach, stakeholders are encouraged to meet and discuss the contentious issues in an effort to reach consensus and officially communicate the industrial resolution to the MoA.
At around the time the challenges within the oilseed industry were presented to the MoA, the Agricultural Consultative Forum (ACF) also submitted a proposal to develop a Soybean Strategy. The ACF’s proposal aimed at contributing to the Agricultural and Food-system Resilience: Increasing Capacity and Advising Policy (AFRICAP) Project’s objectives, i.e. to facilitate the development of sustainable, productive and climate-smart agricultural systems to meet food security and economic development needs. The proposal was also in line with and supporting the implementation of Zambia’s key national development policies and programmes; including the on-going review of the National Agriculture Investment Plan (NAIP). The development of a Soybean Strategy is looking at the climate resilience, food and nutrition security implications of soybeans, and the different supply chains that soybean feeds into; as well as the crop’s potential to contribute to the Country’s agricultural diversification agenda. The development of the Soybean Strategy is also in line with the Government’s plan of developing commodity-based action plans or strategies.
In following the industrial consensus approach to resolve the challenges presented by the oilseed stakeholders, and simultaneously, embracing the soybean strategy development proposal, the MoA decided to undertake an oilseed industrial study, involving a broader stakeholder coverage, besides CEDORA and ZNFU members. The MoA appointed ACF, being neutral player in the oilseed subsector, to lead the study. The study was to cover not only soybeans but to also include other major oil crops (sunflower, cotton, groundnuts and palm oil) in Zambia: taking a value chain approach, including the impact of climate change on the oil crops. This study was also expected to generate data and information, relevant to the development of Zambia’s second NAIP, and to the Biennial Review Reports (BRR) under the African Union’s Malabo Declaration commitments.
(vii) .The overall objective of this study was to understand the operations and functioning of the oilseed industry and identify policy levers to help enhance the value chains’ contribution to the national agricultural diversification agenda, for a sustainable and climate-resilient agriculture sector.