Marketing and Trade programme- Main menu

Like most other countries in the Southern African region, Mozambique has continued to make significant and rapid progress in recent years towards developing its agricultural commodity markets. A number of major transitions have influenced and continue to have an impact on the current and future configuration of agricultural marketing, trade and agro-processing in Mozambique . These transitions are:

• from a command to a liberalized market economy;

• from a national cereal market, in deficit, that was dominated by food aid deliveries to a two-tier market with deficit production in the South and export-orientated surplus in the North;

• to continued increases in cereal production resulting from an expansion in the area under cultivation and an improvement in productivity levels, primarily in the central and northern regions;

• from farmers reacting to market prices to a more market-oriented perspective, diversification of crop production and self-sufficiency in food needs;

• to an increased domestic demand for livestock feeds as livestock herds are rebuilt and dietary changes are linked to higher incomes and subsequent increases in demand for animal products; and

• to an increased emphasis on the restructuring and establishment of small- and medium-scale agricultural processing infrastructures to add value to raw materials, improve the quality and storability of produce, and lower transaction costs per unit value for the domestic and export markets.

The transitions described above (particularly ii and iii) are illustrated in the following table that shows the estimated grain availability, by origin, in Mozambique from 1989 to 2003. The general trend of decreasing food aid and increasing commercial imports was slightly disrupted by the floods in 2000.

Within the agricultural marketing and trade sector, food industries play an important economic role; they account for some 60% of the total revenue generated by processing industries as a whole. The significance of this figure is clear when compared to the 11% of total income contributed by the textile and forestry industries (INE 1998). Although food falls mainly within the large-scale food-processing sector, there are also many smaller scale agro-industries in rural areas such as maize hammer mills and oil extractors. Since 1997, a number of NGOs have promoted the introduction of these rural processing technologies, but very little information is currently available on the economic dimensions of these operations.

There is a great deal of scope for the establishment of small- and medium-scale agricultural processing as evidenced by recent investments in tea, tobacco and cashew processing facilities and associated increases in production, partly through contract farming and outgrower arrangements. Prevailing opinion, however, is that these opportunities are not currently being fully exploited.

In general, the domestic agro-industrial sector has so far not been able to respond to the liberalization of trade relations between the SADC countries. Export potential is consequently underutilized and the domestic (urban) food market is increasingly dominated by fresh and processed products originating from other SADC countries, notably RSA. This has resulted in a serious balance of trade deficit, which is not sustainable.

Current Support interventions

• Assistance to Marketing Management for Food Security by enhancing the institutional capacity of the Ministry of Industry and Commerce to facilitate the development of agricultural market and trade systems

Potential support interventions

Potential areas that may be considered for future assistance to enhance the efficiency and effectiveness of agricultural marketing and trade include the following:

• Operational and institutional support to implement the Agricultural Marketing Policy, particularly at provincial level;

• Support for the review, analysis and implementation of agricultural trade issues related to the SADC Free Trade Protocol and WTO negotiations;

• Policy assistance to review the implications of the withdrawal of Mozambique from COMESA on current and prospective agricultural trade;

• Support for reviewing marketing and trade-related legislation, in particular the simplification of rules governing the establishment and registration of farmer and trader associations and the establishment of harmonized regulations regarding contract farming and outgrower scheme production arrangements;

• Assistance for strengthening intermediate financial institutions operating in the rural areas to enhance the delivery of market and trade credit and investment financing;

• Technical and institutional support to the National Institute for Quality Normalization (INNOQ) regarding the establishment of agricultural produce grades and standards and the development of legislation and regulations for food safety standards;

• Assistance for the collection, analysis and dissemination of market- and trade-related information, including research on export opportunities in external markets;

• Support for the provision of market infrastructure, particularly aimed at improving the functioning of rural and periodic markets;

• Support for strengthening commercial marketing systems for agricultural inputs in rural areas;

• Provision of policy analysis and technical training support on agricultural marketing and trade issues;

• Support for the design and development of training materials on agricultural marketing and trade;

• Support for training of extension agents in agricultural marketing and trade issues , and ;

• Support for the development and incorporation of a training module on marketing and trade issues, within the existing curriculum for Rural Development Studies at Eduardo Mondlane University .

Potential areas that may be considered for future assistance to enhance agro-industrial development could include initiatives to:

• Provide support for the formulation of a policy on agro-industry and a related national programme on agro-industrial development;

• Support the establishment of institutional co-ordination mechanisms among MINAG, MIC, other related Ministries and institutions, and private sector organizations for the implementation and promotion of an agro-industrial development programme;

• Support the functional and organizational reform of the National Directorate of Industry to make it more responsive to and capable of addressing the need for agro-industrial development and infrastructure;

• Support the provision of training programmes and the development of training materials to assist in agro-industrial development;

• Promote appropriate technologies for small- and medium-scale agro-industries to process and preserve fruits, vegetables, legumes and tubers;

• Support the institutional development of the private agro-industrial sector (chambers of commerce, associations, federations);

• Support the development of agro-industries in key areas such as animal feed, the processing and export of cassava and maize, production of fish meal, etc, and;

• Review the options for applying trade tariffs on fresh horticultural products (fruits and vegetables) when the domestic market is vulnerable.

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