GOVERNMENT OF THE REPUBLIC OF ZAMBIA · crop oriented. The emergent farmers produce a mix of food and cash crops. There are about 600,000 small–scale farmers of which 119,200 are

New Partnership for

Africa’s Development (NEPAD) Food and Agriculture Organization

of the United Nations Comprehensive Africa Agriculture Development Programme (CAADP)

Investment Centre Division

GOVERNMENT OF THE REPUBLIC OF ZAMBIA

SUPPORT TO NEPAD–CAADP IMPLEMENTATION

TCP/ZAM/2906 (I) (NEPAD Ref. 04/01 E)

Volume II of IV

BANKABLE INVESTMENT PROJECT PROFILE

Nega–Nega Irrigation Scheme Development

November 2004

ZAMBIA: Support to NEPAD–CAADP Implementation

Volume I: National Medium–Term Investment Programme (NMTIP)

Bankable Investment Project Profiles (BIPPs)

Volume II: Nega–Nega Smallholder Irrigation Scheme Development Project

Volume III: Sustainable Aquaculture Development Programme

Volume IV: Smallholder Dairy Development Project

NEPAD–CAADP BANKABLE INVESTMENT PROJECT PROFILE

Country: Zambia

Sector of Activities: Irrigation and Land Management

Proposed Project Name: Nega–Nega Irrigation Scheme Development

Project Area: Nega–Nega, Lubombo, Magobbo and Kabesha

Duration of Project: 5 years

Estimated Cost: Foreign Exchange...............US$9.78 million Local Cost...........................US$1.41 million Total.................................US$11.19 million

Suggested Financing:

Source US$ million % of total

Government 1.68 15

Financing institution(s) 6.15 55

Beneficiaries 2.24 20

Private sector 1.12 10

Total 11.19 100

ZAMBIA:

NEPAD–CAADP Bankable Investment Project Profile

“Nega–Nega Smallholder Irrigation Scheme Development”

Table of Contents

Abbreviations........................................................................................................................................ iii

I. PROJECT BACKGROUND.......................................................................................................1 A. Project Origin ....................................................................................................................1 B. Economy, Agriculture and Food Security .......................................................................1 C. Irrigation Development .....................................................................................................2 D. Institutional Capacity in the Sector .................................................................................4

II. PROJECT AREA.........................................................................................................................4 A. Geography, Climate and Socio–economics......................................................................4 B. Infrastructure and Potential for Irrigation Developments ............................................5 C. Formal and Informal Institutions/Organizations ...........................................................5 D. Target Population and Scope for Development ..............................................................6

III. PROJECT RATIONALE............................................................................................................6

IV. PROJECT OBJECTIVES...........................................................................................................7

V. PROJECT DESCRIPTION ........................................................................................................8

VI. INDICATIVE COSTS ...............................................................................................................10

VII. PROPOSED SOURCES OF FUNDING..................................................................................11

VIII. PROJECT BENEFITS ..............................................................................................................12

IX. IMPLEMENTATION ARRANGEMENTS ............................................................................13

X. TECHNICAL ASSISTANCE REQUIREMENTS .................................................................14

XI. IDENTIFIED SSUES AND PROPOSED ACTIONS .............................................................15

XII. RISKS ANALYSIS ....................................................................................................................16

ANNEXES: ...........................................................................................................................................17 Annex 1: Map of Project Area ..................................................................................................19 Annex 2: Figures and Tables ....................................................................................................21 Annex 3: List of References ......................................................................................................23

NEPAD – Comprehensive Africa Agriculture Development Programme

Zambia: Investment Project Profile “Nega–Nega Irrigation Scheme Development”

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Abbreviations

AGRIFLORA An out–grower company for exports of vegetables and cut flowers ADB African Development Bank amsl Above Mean Sea Level (elevation in metres) CAADP Comprehensive Africa Agriculture Development Programme CLUSA Cooperative League of the United States of America DUNAVANT An out–grower scheme company with focus on cotton growing IDE International Development Enterprises IFAD International Fund for Agricultural Development LUKAMA Lubombo Kabesha and Magobbo Co–operative MACO Ministry of Agriculture and Cooperatives MoFED Ministry of Finance and Economic Development MoFNP Ministry of Finance and National Planning NEPAD New Partnership for Africa’s Development NGOs Non–Governmental Organizations NMTIP National Medium–Term Investment Programme PRSP Poverty Reduction Strategy Paper PAM Programme Against Malnutrition PLC Private Limited Company SIP Small–scale Irrigation Project SHEMP Smallholder Enterprises and Marketing Programme TLC Total Land Care TNDP Transitional National Development Plan TSB Technical Services Branch UNDP United National Development Programme ZACA Zambia Agricultural Commodity Agency



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I. PROJECT BACKGROUND

A. Project Origin

I.1. The Nega–Nega Irrigation Scheme Development project is a new proposal and pipeline project whose concept is in its development stage by the Technical Services Branch (TSB) of the Ministry of Agriculture and Cooperatives (MACO). It is a demand driven project and brainchild of the commercial and small–scale farming community of Nega–Nega, Magobbo, Lubombo, Kabesha and Makuku farming area in Mazabuka district. The Minister of Agriculture and Cooperatives visited the proposed project area and gave a conceptualization go ahead with a view to supporting it at government level. A preliminary reconnaissance survey conducted by MACO in July 2003 indicated high potential for success from a standpoint of resource endowment (soil and water) and social acceptability. The government has given top priority to the development of this irrigation scheme, which amply falls under one of the pillars1 of the Comprehensive Africa Agriculture Development Programme (CAADP) i.e. a sustainable land management and reliable water control systems. The proposed scheme also fits with the highlighted priorities of the National Medium–Term Investment Programme (NMTIP). The government has recently created an Irrigation Task Force to support the development of small–scale irrigation in unison with large–scale commercial farmers and agri–businesses through an out–grower scheme arrangement. This decision is to be welcomed, as it will enhance agricultural development with less dependence on the rains.

B. Economy, Agriculture and Food Security

I.2. Zambia’s agriculture has been characterized by persistent droughts, particularly in the southern parts of the country that mainly covers Agro–ecological Zones I and II with mean annual rainfall totals of 400 mm and 800 mm respectively whilst the northern parts of the country lie in high rainfall areas of Agro–ecological Zone III with average annual rainfall total of 1,200 mm. Agriculture’s share of the GDP is 22% and provides for the livelihood of over 70% of the population. The agricultural sector absorbs about 67% of the labour force i.e. 2.4 million people. According to the Poverty Reduction Strategy Paper (PRSP), agriculture is the main source of income and employment for rural women who constitute 65% of the total rural population (MOFED, 2001). It therefore follows that increase in rural income will result in overall poverty reduction and increased food security. The agricultural export potential is significant considering that its exports increased from US$46.5m in 1995 to US$133.9m in 1999. Although there has been continued increase in export crops, recent figures are not yet officially documented. Out–grower schemes have led to accelerated crop diversification leading to its commercialization. Their involvement of smallholders is a step in the right direction since they constitute the majority of Zambian farming community.

I.3. The current population of 10.3 million people is growing at a rate of 2.9%, which is above the food, and fibre production rate of 2.1%. Drought occurrences continue to depress food production and thus food insecurity threatens 80% of the population. Reduced crop production has been attributed to the heavy dependency on rain fed agriculture that is undependable due to severe droughts that affect crop production and thus food deficits particularly maize, frequently occur. Despite the surplus maize produced in the 2002/2003 agricultural season due to a good rain season, recent production figures confirm the declining trends in crop production as indicated in Table 1 (see also Figure 1 in Annex 2).

1 Pillar 1: Sustainable Land Management and Water Control Systems.



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Table 1: Zambia Agricultural Crop Production Crop 1998/1999 2000/2001 2001/2002 Castor beans 487 0* 0* Cotton 140,072 49,485 0* Cowpeas 4,485 0* 1,141 Groundnuts 50,965 51,972 41,421 Irish Potato 4,610 0* 421 Maize 855,869 801,889 601,606 Millet 69,618 46,875 37,615 Mixed beans 17,392 21,349 16,619 Rice 14,700 13,936 11,645 Sorghum 25,494 30,245 16,801 Soybeans 26,703 28,311 2,350 Sunflower 6,748 19,002 9,364 Sweet potato 101,440 171,931 59,349 Wheat 39,346 0* 0* Source: MACO, Crop Production Figures 2002 (in metric tons). * No official data available.

I.4. Four farmer categories namely; small–scale, emergent, medium and large–scale exist under rainfed farming. The categories are based on land size owned by a respective farmer i.e. 0.5 to 10 ha (small–scale), 10 to 20 ha (emergent), 20 to 60 ha (medium) and more than 60 ha (large–scale or commercial). Large–scale farmers primarily produce cash crops whereas small–scale farmers are food crop oriented. The emergent farmers produce a mix of food and cash crops. There are about 600,000 small–scale farmers of which 119,200 are emergent farmers. The medium–scale farmers’ numbers are 100,000 countrywide whilst the large–scale farmers account for about 1,500 (TNDP, 2002).

C. Irrigation Development

I.5. Zambia’s irrigation potential is 2.75 million ha based on the water availability and soil irrigability (UNDP, 2000). Of this potential, it is believed that 500,000 ha can be economically developed (TNDP, 2002). However, in some instances, much larger area potential that is several folds of the current figure are estimated. For example, Daka (1986) quotes Zambia’s technical irrigation potential to be 28 million ha based on soil suitability and water availability to irrigate crops. There is need for a systematic assessment to determine the correctness of these findings. It is obviously an under–estimation of the technical potential to refer to 500,000 ha as Zambia’s economic potential, which bases the figure on the ability to develop irrigation financially and also on being able to market the produce. Irrigation development is in its incipient to emergent stage and requires vigorous promotion for its accelerated adoption. Until recently the majority of Zambians shunned irrigation with a view that it entailed huge investments requiring pump sets and pipe network. Frequent and disastrous droughts, which have led to failure of rainfed crops, have forced farmers to go into some form of irrigation using available surface and underground water resources.

I.6. Irrigated agriculture has demonstrated the potential to contribute towards achieving household food security and poverty reduction better than rainfed agriculture because it offers crop security, increases yields and allows multiple cropping intensity. Currently the country irrigates an area of about 156,000 ha of land, which is 5.7% of the physical irrigation potential indicated above. About 95.7% of the irrigated area draws its water from surface water and 4.3% from groundwater (FAO, 2003).



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I.7. Typically, Zambia’s fully equipped irrigation typology can be described as small–scale (111,525 ha), medium–scale (7,370 ha) and large–scale commercial (37,015 ha). Small–scale and informal irrigation is characterized by vegetable growing which mainly utilizes wetlands (dambos2) and riverbanks (see Figures 2 and 3 in Annex 2).

I.8. Table 2 shows irrigation schemes by type whereas Table 3 indicates irrigation coverage by crop. The majority of small–scale farmers utilizing water resources in fertile wetlands grow vegetables using simple irrigation methods.

Table 2: Extent of Irrigation by Types and Systems Irrigation Type Size (ha) Irrigation System Size (ha) Small–scale 111,525 Surface 32,819 Medium–scale 7,372 Sprinkler 17,570 Large–scale 37,015 Localized (drip) 5,628 Equipped wetlands & Inland valleys 100,525 Total 155,912 Total 155,912 Source: FAO Aquastat, 2003.

Table 3: Irrigated Area by Crop Crop Type Irrigated Area (ha) Annual crops 1,344 Bananas 3,000 Citrus 2,210 Coffee 5,160 Cotton 35 Maize 1,500* Rice 8,000 Sugarcane 18,418 Tea 520 Vegetables 125,525 Wheat 12,200 Total 155,912 Source: FAO Aquastat, 2003. *The dry season maize production is believed to be on the increase. The indicated figure may be conservatively low.

I.9. About four smallholder irrigation schemes were initially developed and managed by government in the late sixties to early seventies by the then Projects Division of the then Ministry of Rural Development. The irrigation schemes were initiated to serve the following objectives:

• To compensate the land lost by the displaced local farmers through national projects such as the construction of the lake Kariba Dam in the Gwembe Valley;

• To produce crops that would meet local community requirements; and

• To introduce and promote irrigated agriculture.

2 Dambos are low–lying concave depressions surrounded by high ground from which they receive run–off and

nutrients and have shallow water tables within 1 m of the soil profile and thus remain wet for most part of the year.



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I.10. Most of these irrigation schemes have not performed well mainly due to a top–down management approach. In addition, the concept of sustainability and access to markets and what crops to grow were not given due attention. This did not empower scheme owners to operate and maintain them by themselves. Some of these irrigation schemes are in a collapsed state, whilst others were not completed at construction stage. The government’s current policy is to rehabilitate or complete construction of these schemes and later transfer the management responsibility for operation and maintenance of the system to its beneficiaries. Unfortunately, the government through the TSB has failed to hand–over any irrigation scheme to private hands to date because of failure to rehabilitate the eight planned irrigation schemes under SIWUP (IFAD, 2003).

I.11. Other irrigation schemes that followed the above–described ones are parastatal schemes, which were also initiated by the government for sole purposes of producing specific crops for throughput to their industries. Such crops included coffee (Kateshi which is now privatized and Ngoli irrigation schemes), bananas (Munushi and Chiawa schemes) and tea (Kawambwa scheme). These schemes range from medium– to large–scale irrigation scheme that include Nakambala Sugar Estate developed by Tate and Lyle but now managed by Illovo sugar group — a South African company.

D. Institutional Capacity in the Sector

I.12. The Technical Services Branch (TSB) in the Department of Field Services of MACO is the main institution mandated to plan and develop all aspects related to irrigation and water management. The TSB consists of three sections, namely: (a) Irrigation Engineering section (b) Land Husbandry section and (c) Farm Power and Mechanization.

I.13. The TSB through the Irrigation Engineering section provides services to farming enterprises in irrigation, agronomy, catchments hydrology and related hydraulic and civil engineering aspects. It further helps the government to formulate policies for irrigation development, carry out water resources assessments and implement irrigation projects. Training to communities in water use and management is provided by the TSB through its provincial, district and camp officers. NGOs like the Cooperative League of the United States of America (CLUSA), the International Development Enterprises (IDE) and Total Land Care (TLC) also have a large focus on water management and use capacity building among small–scale farmers.

II. PROJECT AREA

A. Geography, Climate and Socio–economics

II.1. The proposed Nega–Nega Irrigation scheme is located approximately 70 kilometres from Lusaka to its turn–off on the north–western side of Munali hills. The area lies at an altitude of about 1,000 m amsl. The area stretches further on the south–western side to Lukama Cooperative. It is in the Kafue flats area in Agro–ecological Zone II. Annual average rainfall total of 800 mm is recorded. The area is probably on the leeward side of the Munali hills because it is characterized by erratic and poorly distributed rainfall and thus droughts are frequent. Other constraints leading to poor yields include poor crop husbandry, inadequate supply of inputs, which are also delivered late. Sometimes flooding after a heavy storm has occurred particularly in areas covered by poorly drained soils takes place. Both situations expose the population of Nega–Nega to crop failure and consequent hunger in many years. The majority of the population is poor subsistence farmers and therefore survives on government food relief programmes and/or casual labour from commercial farms surrounding the area.



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Because of this wholesale poverty, thefts are rampant on commercial farms that produce crops through irrigation particularly during severe drought years.

B. Infrastructure and Potential for Irrigation Developments

II.2. There is a railway line cutting through some parts of the area but generally the railway line is only some seven kilometres away from the southern side of the proposed project. On the northern side of the area some eight kilometres away lay the Kafue River, which flows all year round and would be the potential source of irrigation water.

II.3. The majority of the people live on traditional land administered by chiefs and headmen under customary law. A settlement committee in the area has allowed smallholders to obtain title deeds for their farm plots. This settlement committee works well with chiefs and headmen and they facilitate those on traditional land to get title deeds. There are some commercial farms like Delta Farms, Makuku Farms, Nanga PLC and Lublinkhof Farms that border the proposed project area (see Map in Annex 1). Delta Farms shares an immediate boundary with the project area near Kafue River whereas Nanga Farms PLC shares boundaries with Lukama Cooperatives. Some 15–20 km from Nega–Nega, to the western side from the proposed project area is the famous largest Sugar Estate in Zambia — Nakambala with its out–grower estates i.e. Ceres Farms, Garner Farms, Nanga Farms and Kaleya Smallholder Company. Whilst Nakambala Sugar Estates grows a sole sugarcane crop, its out–growers produce both sugarcane and other crops like wheat, coffee and maize. Nanga Farms in the area once successfully grew a supplementary irrigated cotton– now grown by most small–scale farmers under rain fed conditions.

II.4. Within the proposed project area is a large warehouse building, which used to be a brick factory. It has a side rail connecting the main railway line. The building is currently unutilized but can be commercialized easily for any value–adding ventures and training. There are about ten primary schools and four clinics within the surroundings of the project area, up to a radius of 10 km. Other infrastructures include some three large storage sheds and three market centres. There are about four Agricultural Extension Blocks with three extension staff and one veterinary assistant. A number of communal borehole hand pumps exist for water supply but the majority of the people draw water from hand–dug wells and sometimes from streams.

C. Formal and Informal Institutions/Organizations

II.5. The Ministry of Agriculture and Cooperatives gives extension services in the area. However the extension system under government is poorly funded and in most cases not fully functional. An International NGO called CLUSA is offering extension services in the area of conservation farming and marketing skills through a US$650,000 Smallholder Enterprises and Marketing Programme (SHEMP). This is a project, which can potentially complement the present proposal. DUNAVANT as an Agri–business company also operates an out–grower cotton scheme and gives extension services to its farmers. Plan International and Programme against Malnutrition (PAM) are among other NGOs operating in the area on socio–safety–net programmes including food security packs.

II.6. The African Development Bank (ADB) is currently implementing a Small–scale Irrigation Project (SIP), which is located close to the proposed project area. This project would render itself useful in complementing some activities of this project particularly infrastructure development, electrification and feeder road construction since the areas are just adjacent to each other.



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II.7. There is a locally based settlement committee that administers land under title deeds and supports activities of the settled smallholder farmers in fostering development in the area. This committee is willing to commercialize the settlement farming system by adopting appropriate technologies and farming systems. Farmers without title deeds are directly under the administration of headmen and chiefs who have welcomed development projects of this nature and it is reported that they will be influential in modernizing smallholder farming.

II.8. There is also a National Irrigation Research Station equipped with a meteorological weather station just some seven kilometres from the proposed project site. The research station has previously undertaken useful research in irrigated crop water requirements and scheduling, horticultural research including agronomy and plant protection as well as pasture and tree crop research. Although now operating at low–level funding, it could actually provide useful complementing support services to the proposed project.

D. Target Population and Scope for Development

II.9. The project will aim at targeting resource poor smallholder farmers who are already engaged in rain fed farming and own land. The project area potentially possesses up to 29,000 ha of land owned by the community who are cultivating it using hand hoes and mainly growing staple maize. The area can safely be demarcated in four segments that could be developed for irrigation purposes (see Map in Annex 1). The first 3,000 ha called Phase I (a) lie between the line of rail and the Kafue River with an extension to Lukama Cooperative area that covers about 4,000 ha under Phase I (b). The second 10,000 ha lie between the Northwestern foot of Munali hills, the rail line and Kafue River. The third proposed 8,000 ha lie approximately between and including Chilamba stream and contour line 1,080.3 The fourth area covers 4,000 ha and is an extension of the second area enclosed by contour lines 1,020 and 1,040 from the great north road to the South East. The area that could be put under irrigation is 29,000 ha. A mixture of commercial and small–scale farming could successfully involve local inhabitants, thereby leading to empowering these people.

II.10. This project proposal is targeting 140 smallholder farmers to develop the first 1,050 ha of which 525 ha will fall in the Phase I (a) near Delta Farms area and another 525 ha in Phase I (b) of Lukama Cooperative area near Nanga Farms PLC. Given that each farm family has seven members in the household, there will be at least over 980 direct beneficiaries in this first phase. It is expected that, up to 3,000 indirect beneficiaries will be reached through employment creation as labourers on the farms. The Government of the Republic of Zambia could do the follow–up developments in completing the extent of land under this phase and that in Phases II, III and IV as expansion activities after demonstrated success.

III. PROJECT RATIONALE

III.1. The proposed project area has abundant water resources that can be tapped from the Kafue River via river diversion through an excavated canal to the project area over eight kilometres. This will benefit the community as water can be pumped directly from the canal to the fields for irrigation and other purposes. The project area has suitable soils for irrigation as can be demonstrated by the commercial farming community who are growing sugarcane, coffee, wheat and maize under irrigation. Although irrigated farming is incipient among smallholder farmers, it is envisaged that training and hiring out specialized services such as spraying, mechanized land preparation to commercial 3 Map No. 1528C3 edition 2–ZS 1988, Scale 1:50,000.



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companies and/or farmers who already have the equipment will help alleviate this constraint. Nanga Farms has accepted to pump water from its already excavated canal from the Kafue River to Lukama Cooperative land and foster irrigation development in Phase I (b).

III.2. Because of its high irrigation water application efficiency and simplicity to centrally run, centre pivot irrigation will be preferred to furrow irrigation, which entails use of a lot of water and massive land preparation. One Centre Pivot (75 ha) will cater for ten smallholder farmers each irrigating 7.5 ha. There will be seven Centre Pivots of this size to cover 525 ha in Phase 1a and another seven of the same size to cover 525 ha in Phase I (b). These will be bought by the project and will be given to the farmers on a cost recovery basis over a period of five years. The equipment will be used as a guarantee in case of default. Thus the recovered money can be used for expansion to cover other farmers and complete the Phase I (a) and I (b) systematically. The handling of 7.5 ha of land grown to sugarcane per farmer has proven successful under the Kaleya smallholder irrigation scheme and it is hoped that with all issues of sustainability taken into account, the model project will be highly successful.

III.3. The existence of the old brick factory building will be useful once rehabilitated as a training centre and processing/storage of crops before transportation to Lusaka for export markets. To run the centre pivots, electrification of the area will be required.

III.4. The promotion of irrigation for smallholders under this proposed project is in line with the country’s national development policies among which irrigation is spelled out as one of the strategies for increasing food production and earning the much cherished foreign exchange through growing high value export crops (non–traditional export crops). This will help increase the contribution of agriculture to the country’s GDP. Irrigation development in this area will undoubtedly help enhance livestock and fisheries production. In drought years, which are frequent, livestock production is hampered by lack of or inadequate supply of water. The Kafue River that is an inland aquatic fishery is seasonally closed off for fishing to allow for breeding. With irrigation coming to the area, livestock interactions are advocated. Construction of fishponds at smallholder farm level to sell fish during off–season will be possible and irrigation water can be used for replenishing water. With livestock production, it is envisaged that green fodder can be grown and by–products could be fed to the livestock. Livestock manure can also be used on the farm to replenish soil fertility. The five CAADP pillars reflect these activities in the NMTIP.

IV. PROJECT OBJECTIVES

IV.1. Overall Objective. To increase rural incomes of smallholder households through increased production and marketing of high quality crops under irrigated farming.

IV.2. Specific Objectives:

• To mobilize and sensitize smallholder community about the benefits of irrigation and out–grower group marketing dynamics i.e. credit linkage, input and output marketing;

• To increase access of smallholder rural farmers to irrigated agriculture and strengthen their capacity through training in irrigation agronomy, crop processing and handling and marketing;

• To contribute towards reduction of poverty and malnutrition by producing and marketing crops to earn incomes throughout the year;



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• To increase rural employment and incomes of vulnerable groups through forward and backward linkages in the value–chain of irrigated crop output; and

• To commercialize smallholder farmers through crop diversification under irrigation.

V. PROJECT DESCRIPTION

V.1. The proposed irrigation development will run for five years. It is foreseen that this community/TSB–initiated proposal will act as a pilot phase to carter for 1,050 ha in the first five years. Following successful implementation of the pilot phase and subsequent interest in funding by the government and other donors, it is envisaged that the available land earmarked for Phase I a/b would complete the 7,000 ha of development by the fifth year. The project is foreseen to run purely on commercial business basis by establishing a private company that will assist the smallholders to formulate an irrigation plan so that water requirements, spraying, mechanized land preparation and marketing are known in advance. Lukama Cooperative, which is operating actively and spearheading some developments in the area, will with other stakeholder from the commercial farming sector and out–grower schemes, spearhead the formation of this company.

V.2. Target Group. The project is targeting smallholder farmers to work with both the commercial and private agri–business out–grower companies especially in marketing the irrigation crop output. One hundred and forty smallholder farmers including 980 direct household beneficiaries will be covered in the pilot phase, which will have spin–off benefits to over 3,000 indirect beneficiaries through employment creation within the community.

V.3. Community Mobilization. MACO will be in the centre stage of spearheading awareness campaigns and farmer group formation and development. This stage will involve some of the following elements; (a) project concept explanation to the community; (b) farmer selection criteria; (c) project benefits to the community; (d) agreements on irrigation systems and/or crops to be grown; (e) implications on land development issues with respect to re–demarcation and allocation; and (f) community contribution and involvement at design and implementation stages. These processes will be participatory in nature.

V.4. Land Development and Irrigation Systems. It is critically important that the community and particularly the first pilot farmers agree to land demarcation and allocation arrangements/adjustments that may arise due to irrigation system selection. The pilot project proposes to use the centre pivot system because of its numerous advantages over the sprinkler, furrow and drip irrigation systems. Firstly, a specialized team hired by the farmers rather than individual farmers operating their own system can centrally control the centre pivot system. Secondly, the system has much higher application efficiency than the furrow and sprinkler irrigation systems. Although drip may be competitive, it is sophisticated, highly intensive and technical in nature. The centre pivot will allow for centrally planned mechanized land preparation and easy water allocation. There will be 140 farmers each cultivating 7.5 ha under a centre pivot system. There will be 14 centre pivots to irrigate 1,050 ha with each centre pivot irrigating 75 ha. Farmers under each pivot would be a cooperative group linked to a set–up company running the centre pivot. Lukama Cooperative in conjunction with the settlement committee will foster the formation of this company.

V.5. In the unlikely event the farmers refused to adopt the centre pivot irrigation system in fear of re–demarcating their land and re–allocating it to them, the proposed system allows for water delivery up to farmers’ fields wherein infield canals and furrow irrigation system can be adopted without undue



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disturbance to their existing farm plot configuration. However this may result in increased costs for land levelling, canal development and furrow formation. Of course this will also be at the expense of having a highly efficient water application irrigation system — the centre pivot. The merit right now lies in the farmers’ understanding of project’s proposed irrigation system based on what they have seen on surrounding commercial farms.

V.6. Water Abstraction and Reticulation. Water will be abstracted from the perennial Kafue River by diversion canal over some eight kilometres to the proposed irrigation scheme. One low–lift high volume step–up booster pump will be installed every 2 km along the Phase I (a) 8 km earth canal to allow enhanced water flow and they will be used to deliver water to the centre pivot and/or the conveyance canals to infield structures. The canal in Phase I (b) is an existing one and will only need two low–lift pumps to the intended irrigation area. The canal to be excavated will be trapezoidal shaped with top and bottom widths of 2 m and 1m respectively and height of 1.5 m. The canals will not be lined with cement since the soils are clayey and stable. The canal capacity is sufficient enough to be used for future potential expansion. For areas remotely located from the abstraction point, pumping through pipes to some storage reservoirs will be necessary. Water will later be pumped to the intended field by using booster pumps installed at each storage reservoir. Thus a total of eight booster pumps will be required.

V.7. Infrastructure Development. Because of an already existing overload on the immediately available transformers in use by Nanga Farms and Delta Farms, the project will electrify the project area. There will be need to install a new electricity sub–station. It is not possible to tap power from the nearby 11KVA power lines and thus all developments will have to be away from these power lines. The SIP, funded by the ADB, is preparing to start an Irrigation project of up to 595 ha scale in the area. Electrification of this project area will benefit the current project. Electrification work under the ADB has already commenced and augurs well for future developments. Feeder roads already exist but some new ones to improve connectivity will require being developed and/or old ones improved. The SHEMP is in the process of improving one access road in the project area under its road access improvement component. An old brick factory will be rehabilitated and used as training centres as well as a processing factory for value adding especially for export vegetables. Such trainings like quality control, irrigation agronomy, operation and maintenance of irrigation equipment and infrastructure, packaging and marketing will be conducted.

V.8. Marketing. The irrigation scheme will run on a cooperative basis wherein group marketing will benefit the farmers because of bulking crop output. The linkage to private out–grower companies will help smallholder farmers participate in forward contract market arrangements. Specific crops will be grown for sure markets and/or the commercial farmers will help invigorate strategic markets like value adding and storage of crop in warehouse receipt system for future good market prices. For export vegetables, there will be need to carry out quality control and have proper refrigerated transit storage facilities. For sustainable supply to markets, smallholders will grow both winter and summer crops.

V.9. With sure markets for produce, the cooperative will pilot a cost recovery based irrigation funding mechanism, which will help promote private investors in large–scale irrigation schemes in the country. This will entail setting up a self–financing/autonomous, privately managed, irrigation development scheme (depending upon the results from the pilot activities in Phase I attesting to its feasibility). Lukama Cooperative and commercial farmer stakeholders would be in the forefront to establish this autonomous self–managed irrigation scheme.

V.10. Capacity Building and Institutional Support. Setting up a training centre will facilitate machinery demonstration and training of smallholder farmers and government extension staff within



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the project area. Currently the ADB–SIP has embarked on training all government extension staff from Mazabuka–Nega–Nega area in irrigation extension, group formation and mobilization. The project has a five year programme of building farmers’ and extension staffs’ capacity. It would augur well to compliment these efforts rather than duplicate them. The farmers under this project could be trained at the same time as those from the SIP if activities are harmonized. The project staff will also receive project management training as in–service training as well as build their capacity in finance management. Five MACO staff i.e. an Irrigation Agronomist, an Irrigation Engineer, a Monitoring and Evaluation officer (Technical Assistance) Extension methodologist and Gender development officer will be seconded to the project. These will work with International Technical Assistance staffs i.e. a Project Manager (expatriate), Oversight Engineer, Training specialist and Post–harvest specialist. Local technical assistance is also envisaged. Seconded staff from MACO and Technical Assistance experts would help boost efforts for capacity building among the smallholder farmers, Agri–businesses and Community Based Organizations in the area. Their main roles are highlighted in the implementation arrangements in Section IX of this project profile.

VI. INDICATIVE COSTS

Table 4: Project Cost Summary per Component Component Local Foreign Total (US$) % Foreign

Exchange % Total Base

Costs Irrigation Development

14 x 75 ha centre pivots – 1,364,000 1,364,000 100 14.3 8 x Lift pumps – 35,000 35,000 100 0.4

Agricultural Development (Land Dev.) 232,500 697,500 930,000 75 9.8 Canal Excavation (8 km) 500,000 500,000 1,000,000 50 10.5 Electrification with Sub–station – 1,300,000 1,300,000 100 13.6 Pack house/Refrigeration 112,500 337,500 450,000 75 4.7 Capacity Building/Institutional support 90,000 810,000 900,000 90 9.5 Project Inputs – 1,700,000 1,700,000 100 17.9 Feeder roads development (100 km) 100,000 350,000 450,000 78 4.7 Technical Assistance – 800,000 800,000 100 8.4 Local Staff Support 144,000 96,000 240,000 40 2.5 Programme Coordination/M&E 17,500 332,500 350,000 95 3.7 Total Baseline Costs 1,196,500 8,322,500 9,519,000 87 100.0 Physical contingencies (10%) 119,650 832,250 951,900 87 10.0 Price contingencies (7.5%) 89,737 624,188 713,925 87 7.5 Total Project Costs 1,405,887 9,778,938 11,184,825 87 117.5 Total Project Costs (Zambian Kwacha) = 53,687,160,000 (1US$ = ZK4,800)

Summary Notes:

(i) Irrigation Development. Under this cost component, only the purchase of irrigation equipment (centre pivots and pipes connecting to the centre pivot) is considered.

(ii) Agricultural Land Development. There will be need to consider land clearing and earth moving/levelling to ensure that the terrain is suitable for the irrigation system installation. Two water storage reservoirs will be constructed.



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(iii) Pack House/Refrigeration. An old brick factory will be rehabilitated to allow for development of a training centre that is equipped with a pack house for fresh vegetable product and refrigerated containers for storage of export fresh products.

(iv) Capacity Building/Institutional Support. This cost will go towards training activities and mobilization of farmers. Institutional support costs will include office development, furnishing and utility costs.

(v) Project Inputs. The project will purchase inputs (i.e. seed, fertilizer and agro–chemicals) to be given to farmers by the project on a cost recovery basis.

(vi) Feeder Roads Development. Although a good network of feeder roads exists, they require rehabilitation and/or new ones introduced. About 100 km of access feeder roads will be developed. Every year during the project cycle, the roads will be maintained using labour–based methods.

(vii) Technical Assistance. All salaries and allowances for short–term and long–term technical assistance staff as described in section, are provided for under this cost component.

(viii) Local Staff Support. This cost component is for support of local staffs seconded from the Ministry of Agriculture and cooperatives. It will carter for their allowances whilst on the project.

(ix) Programme Coordination/Monitoring and Evaluation. Three motor vehicles will be purchased for use in coordinating the project, training activities and monitoring progress respectively.

(x) Physical Contingency. This cost takes care of activities not planned but carried out because of their direct importance to the project.

(xi) Price Contingency. This component allows for any monetary value loss due to devaluation of the convertible currency.

VII. PROPOSED SOURCES OF FUNDING

VII.1. This is a high profile bankable project with government support. Thus the government of the Republic of Zambia is the fundamental source of funding with the supporting donors, which at this stage are not defined. Some extension staff will be seconded to the project. Government will further contribute office and housing accommodation for the staff. It can also be anticipated that some financial contributions might come from the Agri–business companies operating out–grower schemes.

VII.2. The beneficiaries who are the community, including smallholder and commercial farmers, will contribute in kind by offering their labour on some civil works as well as materials. The Canadian High Commission has expressed some interest depending on the scope of works and their scale. The Zambian Government will present this proposal to donors in the framework of NEPAD for possible financial support.



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VIII. PROJECT BENEFITS

VIII.1. In the immediate term, the main benefits would accrue directly to nine hundred and eighty (980) beneficiaries and indirectly to three thousand (3,000) beneficiaries. The direct beneficiary smallholder farmers whose farmlands would be jointly cultivated using mechanized tillage systems, re–oriented and demarcated to suit irrigation under Centre Pivot and each farmer re–allocated 7.5 ha will be most immediate participants. Water availability at farm level will also help farmers provide water to their livestock and/or diversify to aquaculture. Antecedent benefits will include the following:

• An increase in income of the smallholder farmer adopting irrigation since the same piece of land would be cropped twice per year;

• Growing wheat in rotation with soybeans for a direct market at higher prices (US$300/ton and US$280/ton/ha respectively) at potential yields of 6 ton/ha and 2 ton/ha would potentially accrue net incremental benefits at net profit of US$6,880 per farmer in one season given that the costs are 60% of gross income. Cumulatively, this would accrue net–income of US$963,200 per year at project level. This is quite competitive with what obtains at Kaleya Smallholders Company where a good farmer who grows sugarcane on a 7.5 ha piece of land earns a similar income. Wheat and soybean gross–margin budgets are shown in Annex 2;

• There would be rural employment creation for farm labour and processing/packaging in the marketing chain;

• There would be an improvement in the lifestyle of the rural community through having better nutrition and health than before;

• A reduction in wholesale poverty would reduce if not eliminate thefts from commercial farms around the project area;

• Commercial farmers could benefit from having an opportunity to offer contracted services such as mechanized land preparation, aerial spraying, combine harvesting and operation and maintenance of irrigation equipment (centre pivots/pumps);

• Commercial and smallholder farmers would have an opportunity to participate in strategic marketing of cereal crops such as maize, wheat and soybeans through warehouse receipt system;

• The irrigation project would accord the smallholder farmers and commercial farmers who have well developed marketing strategies, have joint bargaining strength in the marketplace;

• There would be built–in capacity for the smallholder farmers to operate an irrigated farming system in an efficient manner;

• Successful implementation of the project would open a wide–ranging opportunities for development as this would be replicated over a larger area within the irrigable farming sites; and

• Crop diversification and multiple cropping for an export market are possible with irrigation.



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IX. IMPLEMENTATION ARRANGEMENTS

IX.1. The government through the Ministry of Agriculture and Cooperatives will play a facilitator role in the implementation of project activities. Specifically, the Ministry of Agriculture and cooperatives through the Technical Services Branch will carry out community and stakeholder mobilization and sensitization meetings about the project. This will enable the community participate at all stages of project implementation. The community will thus feel a sense of ownership of the project. Some of the roles might include one or more of the following:

• Consulting and keeping the community informed of activities;

• Disseminating technical messages and resolving any problem that might arise concerning farming including water use rights issues, users’ organization and maintenance;

• Translating the community’s dreams/visions/wishes into practice;

• Taking appropriate action for work not being done or not being done properly;

• Ensuring the community has enough resources to carry out activities;

• Protecting the community’s interests;

• Ensuring proper use of all resources;

• Work towards achieving community’s vision;

• Proposing activities to the community for approval;

• Receiving proposals from the community for implementation;

• Undertaking fundraising activities for the community/cooperative;

• Making community/group action plans; and

• Monitor/evaluate group activities.

IX.2. Decision–making. It will be very critical to avoid previous mistakes where government planned and designed projects without consulting the stakeholders except at implementation stage. This has resulted in failure of many irrigation schemes highlighted earlier in this project profile. It is therefore imperative that the communities from the onset establish a profit making and self–sustaining cooperative. The cooperative company which will be based at the project site (Nega–Nega) will have board members including representatives from the commercial and smallholder farmers, community local leadership and/or settlement committee and Agri–business companies with special interests in the envisaged project activities. The board shall have responsibilities of hiring key–personnel to be in–charge or running the affairs of the cooperative on commercial basis. All contracted services such as development works, irrigation equipment installation, plot demarcation and allocation, mechanized land preparation, spraying services and marketing shall be the responsibility of the company with such services controlled from a central unit. For instance individual spraying may result in selling contaminated produce and this would result in serious loss of business and confidence from international markets. This operation will ensure that quality and quantity of produce is assured especially for export markets. Essentially all decisions on the success and sustainable running of the scheme will be vested in the community and not individuals. This concept is community driven and thus it has their support.

IX.3. The farmer beneficiaries will be pivotal elements in deciding the day to day operations as they would be consulted at every decision making stage. Of particular importance will be their participation in planning, designing and operation of the scheme so as to bring about a sense of full



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ownership of the scheme. It is expected that the cooperative will have a 25 ha piece of land from which it is expected to generate besides the fees paid by farmers from special services, funds for operations and maintenance of equipment and infrastructure.

IX.4. In order to maximize on utilization of earth moving and land development equipment available in the area from the commercial farms and companies, the cooperative company shall hire the services of such equipment for all development works. This is a sustainable way to do business rather than depend on government works’ departments that might derail the progress of development works. Beneficiary farmers will receive training in irrigation agronomy, water management, pest and disease control, harvesting and marketing in order to ensure that farmers do small and unspecialized operations.

X. TECHNICAL ASSISTANCE REQUIREMENTS

X.1. Although not specifically identified at this stage, it would appear that short–term technical assistance would be required in the following areas:

• Training Specialist. This international specialist would be responsible for overseeing all specialist capacity building programmes with respect to technical training. The major areas of training will include, cooperative leadership, irrigation agronomy and irrigation water management, crop quality control, packaging/storage and marketing.

• Post–harvest and Storage Specialist. For high value crops meant for export, there is need to adhere to export regulations and standards. In this regard an expert in crop quality control, packaging/storage and marketing will be necessary. This position will be an international one. The expert should have qualifications in post–harvest technology and marketing.

• Monitoring and Evaluation Specialist. To keep track of project objectives and intended goals and benefits (outputs), a monitoring and evaluation specialist would be required. The specialist will keep track of all progress of the project and help guide its success by recommending timely remedial measures. This will be a national specialist position.

X.2. Only two long–term technical assistance experts would be required i.e.:

• Project Management. This specialist (with qualifications in irrigation or water management) will provide both technical and social advice and coordinate overall project activities throughout the lifespan of the project. This will require the services of an international expert with managerial skills and broad understanding of the socio–economic setting of rural Zambia.

• Irrigation Engineering and Design. An international qualified oversight Irrigation and Design Engineer will required to oversee all engineering works and ensure that there is adherence to the design with participation from the community.



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XI. IDENTIFIED SSUES AND PROPOSED ACTIONS

XI.1. The success of this project will depend on proper and systematic approach towards planning, design and implementation stages. The following issues will help ensure maximum success:

• Participatory Approach. It is necessary at the inception stage to contract a local or an International NGO that will work with the community particularly in bringing awareness of the proposed project activities and its benefits and the importance of their maximum participation in planning, designing and implementation. Critical issues will include the decision by the community on what their contribution will be in the implementation of the project. It would be the duty of this NGO with the extension workers from the Ministry of Agriculture and cooperatives to ensure that a committee overseeing the implementation works is established and plays its roles.

• Operation of Irrigation Equipment and Mechanized Services. Smallholder irrigation using Centre Pivot Irrigation system will involve a non–traditional system that is sophisticated but much more efficient and easy to invoke group organization. For this reason, it would augur well to have contract services for operation and maintenance of the equipment. Other services that would be centrally contracted would include collective aerial spraying, combine machine harvesting, and bulk marketing. It will be very important that costs for such services are well understood by the farmers in order to reduce conflicts arising from misunderstanding. All agronomic and cultural practices as well as marketing arrangements will be vested in the farmers.

• Cropping Pattern. This is a critical factor with regard to transforming smallholder agriculture, which essentially produced without a market in mind. There is need to keep in mind that production will be market driven. Considering that export vegetables require specialized handling and quality standards, it would be prudent to work hand in hand and have collective dealings with Agri–business companies such as Agriflora. Because of high risks in export vegetables, it augurs well to engage more in market–linked cereals like wheat, maize, and soybeans. Other potential crops that can be considered are: coffee, paprika, tomatoes Irish potatoes and cut flowers. The farmers themselves will decide the cropping pattern.

• Marketing. For highly perishable products like export vegetables, refrigerated containers at a pack house need to be installed to allow for transit storage before export takes place. The use of Warehouse Receipt under ZACA should be considered for grain storage when commodity prices plummet. The consortium mix of smallholder, commercial and Agri–business will enable smallholder farmers learn new strategic market planning with assistance of the training specialist.

• Project Scale. Despite the project area potentially covering some 29,000 ha, it is prudent to start small (1,050 ha) as a pilot in the first phase in order to minimize the failure rate. When successful from Phase I a/b, it will be sensible to replicate in a phased approached.

• Financing. Although the Government of the Republic of Zambia may be one source of funding, there are other sources like the Canadian High Commission who may be willing to undertake and support the venture. The proposed irrigation scheme stands a chance of being funded since the local community is willing to participate and form a profitable and sustainable company. This is crucial as it determines the viability of the venture.



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XII. RISKS ANALYSIS

XII.1. There are some risks that may abound the project and these are foreseen in the following areas:

• Implementation Delays. Funds disbursement if tied to government system will cause unnecessary delays and diversion of funds as happened before on some projects. Whilst some of the delays may be attributed to the unstable economic situation, many are bound to be merely bureaucratic and might similarly jeopardize the implementation schedule of a new project. The project proposes a more autonomous and decentralized decision–making and management structure should help to reduce such risks.

• Farmer Interest in Irrigation and Involvement. Part of the poor performance of the previous small–scale irrigation development has been because the farmers themselves were not interested in using irrigation. The farmers in the project area are interested and have been calling for such projects. In order to increase this interest, farmers should be involved in selecting potential participants, crops to be grown and how they will be organized right up from the beginning. This would be done through local leadership and other stakeholders.

• Markets. The potential for replicating the irrigation scheme would largely fall in the farmers’ ability to market their crops and generate income. The marketing strategy should be developed from the onset and all cost recovery activities should be mapped up on the onset and explained to the farmers.

• Land Demarcation. The possibility of farmers not cooperating to have their land re–demarcated and re–allocated to suit the proposed irrigation system for fear of losing their plots either by size or comparative fertility status has been resolved but this will further be mitigated through sensitization meetings that will outline overall individual farmer benefits as trade offs.

• Participatory Approach. Top–down approaches to the community might result in poor community participation in the implementation of activities. To counter this problem, the community would be involved in the entire cycle of the project from planning to implementation stages.

• Canal Siltation/Environmental Protection. Run–off and erosion hazard from the catchment area might result in siltation of the main canal in the long–run. To mitigate this potential problem, the project will put up a regular maintenance programme for the main canal. For environmental protection in the watershed/catchment area, a community based forestry/afforestation management programme will be put in place.

• Environmental Impact Assessment. Irrigation projects are often associated with environmental hazards such as salinization due to over–irrigation and malaria incidents due to mosquitoes breeding in reservoirs and some unmanaged canals. There will be an environmental impact assessment done in order to put ameliorating measures against those negative effects during implementation.



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ANNEXES:

Annex 1: Map of Project Area

Annex 2: Figures and Tables

Annex 3: List of References



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Annex 1: Map of Project Area



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Annex 2: Figures and Tables

Figure 1: Crop Production In Mt

0

100000

200000

300000

400000

500000

600000

700000

800000

900000

1998/1999 2000/2001 2001/2002

Years

Met

ric T

onne

s

MaizeSorghumRiceMilletSunflowerG/NutsSoyabeansIrish PotatoMixed beansCowpeasSweetpotatoCastorbeansCottonWheat

`

0

20000

40000

60000

80000

100000

120000

Land coverage (ha)

small scale Medium scale Large scale

Type of Irrigation

Figure 2: Irrigation Schemes by Type



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Figure 3: Irrigated Crop Area (ha)

020,00040,00060,00080,000

100,000120,000140,000

Annual c

rops

Bananas Citru

sCoffe

eCotto

nMaiz

eRice

Sugarca

ne Tea

Vegetab

lesWhea

t

Crop

Area

(ha)

Table 1: Examples of Some Irrigation Costs Obtaining in Zambia Description Unit cost (US$) Source

Centre pivot (75 ha capacity) 1,300 per ha Delta Farms/ Nakambala Sugar Estate Low–lift irrigation pump 4,375 Delta Farms/ SARO Agricultural company Canal excavation 56 per m3 Nakambala Sugar Estate Feeder road rehabilitation/development using labour based methods 3,000 per km SHEMP/Ministry of Works and Supply

Table 2: Gross Margins Budget – Soya

Yield: 2 t/ha Price: 280 US$/t Production cost/ha as per breakdown below:

Operation Details Unit Quantity Unit Cost (US$) Total Comp D kg 200 0.3 60 Fertilizer

Lime. kg 400 0.025 10 Seed kg 80 0.604 48.32

Roundup litres 2.4 6 14.4 Fusillade litres 1.5 19 28.5 Classic kg 0.03 350 10.5 Benlate kg 1.8 17 30.6 Seed Flo. litres 1.5 3 4.5

Chemicals Innoculum litres 0.4 20 8

Permanent person–days 5 1.8 9 Seasonal person–days 6 1 6 Tractor Op. 35 1.7 59.5 Combine. 1 60 60 Transport 2.64 5 13.2 Irrigation mm 40 0.65 26 Bags 50 kg bags 40 0.25 10

Labour

Crop Levy per 50 kg bag 40 0.1 4 Total variable costs 402.52 Gross income/ha 560.00 Gross returns/ha 157.48 Returns on investment 1.39



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Annex 3: List of References

1. Daka, A.E. 1986. An Assessment of irrigation potential in Zambia, Catholic University of Leuwen (K.U.L), Belgium. MSc. Thesis (unpublished). p159.

2. FAO–Rome and IFAD–Rome. 2003. Smallholder Irrigation and Water Use Programme, FAO–Rome and IFAD–Rome. Draft Project Completion Report for SIWUP.

3. FAO. 2003. Aquastat Irrigation database for Zambia. Rome, Italy.

4. JICA. 1992. Master Plan Study on Hydrology Observation Systems of Major River Basins in Zambia. Final Report.

5. JICA. 1994. The study on the National water resources master plan in the Republic of Zambia, Progress Report 2, JICA.

6. MoFED. 2001. Poverty Reduction Strategy Paper.

7. MoFNP. 2002. Transitional National Development Plan 2002–2005, MoFNP.

8. SADC. 1995. SADC Shared Water Resources Systems Protocol (16/5/1995, Maseru).

9. SADC. 2000. Revised Protocol on Shared Water Courses in the SADC (August, 2000, Windhoek, Namibia), SADC.

10. UNDP. 2000. Zambia Human Resource Development Report: Employment and sustainable livelihoods, UNDP. Country Human Development Report. 112 p.

Documents

GOVERNMENT OF THE REPUBLIC OF ZAMBIA · crop oriented. The emergent farmers produce a mix of food and cash crops. There are about 600,000 small–scale farmers of which 119,200 are