FAO/WFP CROP AND FOOD SUPPLY ASSESSMENT MISSION TO SWAZILAND

15 June 2001

• Mission Highlights
• 1. OVERVIEW
• 2. ECONOMY AND AGRICULTURE
• 3. FOOD PRODUCTION IN 2000/01
• 4. FOOD SUPPLY SITUATION
• 5. FOOD SECURITY AND VULNERABILITY ASSESSMENT
  • 5.1 General hazards and vulnerability factors
  • 5.2 Vulnerability analysis
  • 5.3 Strategies for Possible Food Aid Assistance
• 6. AGRICULTURE REHABILITATION NEEDS: A MEDIUM TO LONG-TERM STRATEGY

1. OVERVIEW

Following reports of a prolonged dry spell that affected the 2000/01 crops, an FAO/WFP Crop and Supply Assessment Mission visited Swaziland from 16 to 28 May 2001, to review harvest prospects and the overall food supply situation, and to estimate cereal import requirements, including food aid, if any, for the 2001/02 marketing year. The Mission received full cooperation from the National Early Warning Unit (NEWU), the Ministry of Agriculture and Co-operatives and the United Nations Development Programme. Discussions were held with the Deputy Prime Minister, the National Disaster Management Service, the National Maize Corporation (NMC), relevant UN agencies and NGOs. SADC Regional Early Warning Unit (REWU) participated in the Mission as an observer. Extensive field visits were undertaken in all agro-ecological regions of the country and interviews were conducted with farmers, extension service, millers and traders. The Mission split into two groups to ensure adequate coverage of key areas within the time allocated.

The Mission forecasts the 2000/01 maize production at 73 000 tonnes, which is about 66 percent of the last five years average. Swaziland does not produce other cereal crops, except for a few hundred tonnes of sorghum. Other crops like sweet potato, beans and cow peas are produced but in small and declining quantities. Field observations by the Mission indicated that production of these crops has also been lower than average. The main factors responsible for reduced crop yields were the mid-season dry spell and the accompanying heat wave.

The reduction in maize production was particularly serious in the Middle and Lowerveld where late planted crops were affected at the critical flowering /tasseling stage. The early-planted crops escaped the drought and generally produced good yields. For the 2001/02 marketing year (April-March), domestic cereal supply, estimated at 85 000 tonnes, falls far short of national consumption requirements. With a mid-marketing year population estimate of 1 034 000, cereal import requirement is estimated at 123 000 tonnes. The Mission estimates that the requirement will be fully covered by commercial imports. Even in normal years, Swaziland's cereal production covers only 60 percent of its domestic consumption requirements. The one- to-one convertibility of the local currency with the South African Rand means that availability of foreign exchange is not a constraint to commercial imports from South Africa.

Nonetheless, because of reduced production, food shortages may be experienced by vulnerable population groups which have limited access to food. A needs assessment is currently being conducted jointly by the Disaster Management Task Force and NGOs in drought affected areas. This exercise will be important in identifying more precisely the vulnerable groups that should be assisted.

2. ECONOMY AND AGRICULTURE¹

Swaziland is a small land-locked country with limited domestic markets. Exports of agricultural commodities and industrial products play a significant role in the country's economic growth, development and food security. Major contributors to real Gross Domestic Product (GDP) in 1998/99 were manufacturing (37 percent), government services (15 percent), service sector (10 percent) and agriculture (9.8 percent, down from 19 percent in 1985/86).

Recently, expansion of output within the manufacturing sector has been the result of strong export performance, especially of sugar-based products, refrigerators, textile products, citrus and canned food and to some extent wood pulp. Estimates of the balance of payments in 2000 point to another surplus and, at year's end, Swaziland's net official reserves were equivalent to 4.5 months of total imports, a relatively comfortable external reserve position. As for the country's external debt and debt-service obligations, they have remained low, at the equivalent of 22 percent of GDP and 2 percent of exports respectively.

Real GDP growth rate has ranged from 2.4 percent to 2.7 percent per annum between 1998 and 2000. This rate indicates negligible growth in per capita income, since the Government estimates the population annual growth rate at 2.7 percent. Employment in the private sector decreased from 65 000 in 1993 to 61 000 in 1999. The inflation rate hovers around 6 percent per annum and is estimated at 6.4 percent for 2000. This inflation stems from the sharp depreciation of the South African rand vis-à-vis major currencies over the recent years. The Swazi currency -- the lilangeni --- which is pegged at par with the rand, fell by around 23 percent against the US dollar between 1998-2000. In 2001 and 2002, further depreciation of the currency is expected. Lending interest rates have averaged 14 percent in 2000, 7 to 8 percentage points over the rate of inflation.

The Government budget in financial year 1999/00 (April-March) recorded a deficit estimated at 4.5 percent of GDP, owing largely to an increase in the wage bill (stemming from the full-year impact of a 15 percent pay raise) and larger subsidies and transfers to public entities. The IMF observed that the Government budget had moved into deficit at a time when receipts from the Southern African Customs Union (SACU), which constitute 50 percent of Swaziland's total government revenue, are expected to decline. The conclusion of the EU-RSA preferential trade agreement in late 1999 and the fact that the SACU revenue formula is currently being renegotiated will result in lower revenues, adding further pressure on the macroeconomic stability of the country.

Whilst Swaziland is classified as a middle-income country because of its relatively high GDP per capita (over US$ 1 340), per capita income for the poorest 40 percent of its population is equivalent to about US$230. Distribution of income is highly skewed, with about 43 percent of total income received by an estimated 10 percent. It is estimated that 55 percent of the rural population live below the poverty line.

Of the agricultural sector's contribution to GDP, production on Title Deed Land (TDL), which consists mainly of sugar cane, pineapple and citrus, accounts for 60 percent. This sub-sector is market-oriented, uses better quality technology and has access to irrigation. Production on Swaziland National Land (SNL), accounts for the balance of 40 percent and comprises mostly subsistence farming. On SNL, maize is grown for subsistence and for supplementary income, along with cotton.

Without an increase in land and water resources, the capacity for growth in TDL is limited. Growth in this modern sub-sector has remained stagnant in recent years while the SNL sector experienced low or negative growth. Maize production has declined over the past years and is highly dependant upon weather conditions. Production of other cereals is insignificant.

3. FOOD PRODUCTION IN 2000/01

Rainfall

The month of January registered lower than normal rainfall in all parts of the country. Rainfall in the Highveld region for example, was only 34 percent of the normal for January. The Lubombo Plateau was much less affected. Rainfall conditions improved in February in every region except in the Highveld, which continued to experience a rain deficit. During the month of March, below normal rainfall was again recorded throughout the country. The Highveld region received 67 percent of its long-term average for that month. The situation was no better in other regions (see Figure 1).

Supply of agricultural inputs

Fertiliser use for food crop production (excluding commercial farming) ranged between 14 000 tonnes and 17 000 tonnes during the period 1995/96, to 1998/99. Fertilisers, which are no longer subsidised, are traded by the private sector and cooperatives through national networks.

As for hybrid maize seeds, use went down from 4 000 tonnes in 1995/96 to 1 316 tonnes in 1998/99. This massive decline followed a government decision to stop providing free seeds to farmers. Seeds are now supplied by the private sector and cooperatives at market prices. Hybrid maize seed use recommended is estimated at 20 kg per hectare.

Fig. 1. Swaziland: Actual vs. Normal Rainfall, by Agro ecological Zone During the 2000/01 Cropping Season

Planted Areas

The Mission's estimates of planted area are based on data provided by the National Early Warning Unit. The data had been collected by the Extension Service by agro-ecological region and were the most reliable at the time of the Mission. The Central Statistical Office (CSO) will provide final estimates during the course of the year. The total national maize area is estimated at 58 259 hectares, which is the same as last year. The plantings could have been larger were it not for the excessive wet conditions at sowing in the Highveld and limited access to tractors and purchased inputs in the Middleveld, the Lubombo Plateau and the Lowveld. The estimated area planted to maize in each agro-ecological region is shown in Table 1.The area planted to sorghum has over the years declined to insignificant levels because of labour problems associated with bird scaring, lack of appropriate varieties and a poorly developed market for the crop. Even though the Mission observed the serious efforts by the Extension Service in promoting cassava and sweet potato production, it noted the limited crop diversity in the fields of farmers particularly in the Lowveld. The Mission did however come across farmers who had small plantings of beans, cowpeas, jugo beans, pumpkins and yams. Cotton remains one of the major crops of the Middleveld and the Lowveld covering about 17000 hectares, but the area continues to decline because of poor prices and competition from irrigated sugar cane which is fetching better export prices. With further development of irrigation being planned by the government, the area under maize is also likely to be affected.

Yields

The yield forecast for each agro-ecological zone is presented in Table 1. Once the maize production estimate for the year 2000/01 season is released by the CSO, the yield and production figures may need to be revised. The Mission did assess crop yields on 70 randomly selected farms in all agro-ecological regions and considered that the estimates made by NEWU were satisfactory. Yields vary with management, rainfall and agro- ecological conditions even within the same agro-ecological zone. The Mission came across farmers who had absolutely no harvest and others who had up to seven tonnes per hectare, within the same vicinity, indicating that husbandry practices (early planting, use of appropriate hybrid seeds, proper use of fertiliser and animal manure) can make a great difference to the impact of drought. However, in general maize yields declined substantially compared to the of the last five years average (1995/1996 to1999/2000). This yield decline was particularly serious in the Middle and Lowerveld where the January/February dry spell affected the late planted crops at the critical flowering /tasseling stage. The impact of the drought was further worsened by a heat wave that hit the country at the same time. The early-planted crops escaped the drought and generally produced good yields. Some farmers indicated to the Mission that they have had limited access to tractors and that they could not get inputs in good time.

On the other hand, many farmers reported that they had achieved the same or better yields compared to the last year. It was reported that last year had excessive rains which resulted in floods that damaged crops, leached nutrients and caused cob to rot.

Based on the mission's investigation and NEWU forecast, the national average yield for maize is estimated at 1.13 t/ha and total production at 73 000 tonnes which represents 66 percent of the average for the last five years (Table 1). Figure 2 shows that maize production is trending downwards, despite price support. This is mainly due to adverse weather and probably falling land productivity.

Table 1. Estimated Area and Production of Maize in 2000/01, by Agro-ecological Zone

Table 2. Total Cereal Production in 2000/01 Compared to 1995/96-1999-00 Average (`000 tonnes)

Other crops

Cotton, one of the major cash crops, occupies 17000 ha and plays an important role in the food security of many households. However, production is on the decline: the hectarage was 35 000 ha during the 1998/99 production year. Sugar cane with 43 000 ha under cultivation is now the main agricultural export and an important source of foreign currency. Grapefruit, orange, soft citrus and lime also form an important part of nutrition and source of foreign currency. Sorghum, pumpkins, sweet potatoes, beans, peanuts, cowpeas, cassava, bananas, peaches and avocados are also produced, but in limited quantities.

Livestock situation

Livestock and pasture conditions are good throughout the country, especially now that the Foot and Mouth Disease seems to have been brought under control. Livestock production is a major activity and about 77 percent of the total cattle population is owned by small farmers.

Although Swaziland has a quota to export 3 360 tonnes of beef to the EU, it only manages to export a fraction of this. Farmers seem reluctant to sell good quality cattle unless forced by economic or climatic conditions.

For the period 1996 to 1999, the cattle population has declined slightly from 656 484 to 613 832 (Table 3). Goat population has also declined from 403 664 in 1996 to 332 939 in 1999.

Table 3. Swaziland, number of livestock, 1996-1999

4. FOOD SUPPLY SITUATION

Access to food and prices

In normal years, Swaziland's cereal production covers about 60 percent of domestic consumption requirements. As for the national staple food, maize, the level of self-sufficiency is in a range between 48 percent (1991/92) and 94 percent (1995/96), depending upon weather conditions. Commercial imports of maize from South Africa fluctuate accordingly. For the last ten years, they averaged 24 900 tons a year, with a peak of 63 000 tons in 1991-92. Commercial imports of wheat have reached 50 000 tons in 2000/01 and rice imports hover around 6 000 tons a year.

No more than 10 percent of the maize production is marketed, most of it through the National Maize Corporation (NMC). Domestic maize marketing is liberalised, but NMC is legally the sole importer of maize. The Government has a policy of floor prices to farmers to induce them to produce maize. The minimum price to farmers has been set at E52.5 per 70kg bag (E750 per ton) for the marketing year 2001/02, which is higher than the CIF import prices from South Africa. The selling price by the NMC to the maize mills is a weighed average between actual cost of imported maize and local maize procurement costs. This price policy, aimed at self-sufficiency, and the fact that milling businesses cannot import cheaper maize grain from South Africa, puts processed maize prices up by 20 percent over what they could be if imports were liberalised. This higher price is passed on to the consumer. In a country where a significant percentage of households are net buyers of maize (confirmed by field visits of the Mission team) and where the poor spend 32 percent of their income on maize, high prices have a significant negative impact on households' purchasing power. Maize imports and floor price policies need to be reassessed as part of a long-term food security strategy.

Other food imports are liberalised, but importers need a permit from the National Agricultural Marketing Board (NAMBOARD). As the country is relatively small and the road network is maintained in fair condition, physical access to food supply is not major constraint. A majority of farmers interviewed during the field visits were engaged in off-farm income earning activities, such as work related to the wood-pulp industry, sugar cane or pineapple processing and other manufacturing activities. Others earned some income from petty trade or were receiving remittances from relatives working in South Africa. But a minority who had no off-farm income worried about their access to food once their harvest had been consumed.

There are no systematic food price monitoring mechanisms in Swaziland. However, from the National Early Warning Unit (NEWU) field surveys, it was possible to gather some information on maize selling prices in informal markets scattered in the various ecological zones. Maize prices have been relatively stable since last September, except in the Lubombo Plateau zone where prices jumped in November and stayed high (see Fig.4 below). This relatively isolated zone/region has the smallest planted area in maize (see Table 1). Located between the Lowveld region, which was hard hit by the dry spell, and Mozambique, it is also further away from South Africa maize markets.

Maize prices will require close monitoring until the next harvest in May 2002, as South Africa too has suffered from the consequences of the dry spell and maize production is forecast to be substantially lower this year. Even though Swaziland's requirements are relatively small, competition from other countries of the region for access to South African maize may put pressure on prices and impact negatively on households' access to imported maize.

Cereal supply/demand balance, 2001/2002

The forecast of the cereal supply/demand situation for the 2001/2002 marketing year (April/March), summarized in Table 4 below, is based on the following assumptions and Mission observations:

• Farmers interviewed by the mission stated that they have no stocks left. Last year was also characterized by a poor harvest. Extension services and other Ministry of Agriculture officials confirmed that situation. Therefore, it has been assumed that opening farm stocks are zero. NMC and millers' stocks were estimated at 2 000 tonnes for wheat and 10 000 tonnes for maize.
• On the demand side, national cereal consumption requirement has been calculated in close collaboration with the National Early Warning Unit (NEWU). The mid-marketing year 2001/02 population is estimated at 1 034 000, and the per capita consumption at 125 kg for maize, 46 kg for wheat and 6 kg for rice.
• "Other uses" cover essentially post harvest losses, estimated at 15 percent by the Ministry of Agriculture. Most farmers buy hybrid seeds and a negligible fraction is used for animal feed.

Table 4. Swaziland: Cereal Balance Sheet for 2001/02 (`000 tonnes)

The Mission forecasts grain import requirement for 2001/2002 at 123 000 tonnes, which is anticipated to be fully covered commercially. Figure 4 indicates commercial imports in recent years.

Source: Ministry of Agriculture and Co-operatives

From a macroeconomic point of view, the direct convertibility of the lilangeni into South African rands means that availability of foreign exchange is not a constraint to commercial imports from South Africa. In the past, commercial food imports appear to have been quite responsive fluctuations in the national production. At a household level, most of farmers should be able to cope, mainly because most engage in off-farm income earning activities and/or receive remittances from relatives working in South Africa. However, a number of households may need support to reach the next harvest. An on-going survey, conducted jointly by the Disaster Management Task Force and NGOs will assess emergency food needs which are expected to be relatively small.

This scenario seems realistic, provided that RSA's maize prices do not increase significantly in the second half of the marketing year because of lower domestic production and higher regional demand for maize. Otherwise, the number of households at risk will increase.

5. FOOD SECURITY AND VULNERABILITY ASSESSMENT

5.1 General hazards and vulnerability factors

The Mission is concerned that a serious maize harvest reduction could accelerate food insecurity among the most vulnerable households in rural areas. However, the economic situation in Swaziland does not show serious signals of deterioration. Nevertheless, it is concluded that joint government and external assistance targeted to the most vulnerable population groups will prevent acute food shortage over the coming twelve months and strengthen self-reliance and long-term food security.

5.2 Vulnerability analysis

An increasing number of households fall into socio-economic strata more vulnerable to further natural and economic shocks and the number of social welfare-like cases is anticipated to grow:

• In rural areas affected by climatic vagaries, near food secure households will increasingly depend on food purchase and solidarity networks to compensate for gaps in their own production;
• in urban and peri-urban areas, unemployed and underemployed workers' extended families will face growing food and income deficits. Problems with socio-economic entitlements will exacerbate the effects of the current situation for some population groups.

On the other hand, the labour market is active and wages -in commercial agriculture, industry and public sector - do not show signs of depression. Livestock was not affected by the dry spell and is in good condition. Also, remittances are reliable sources of food and income.

Currently, there is no indication of irreversible food security deterioration -as long as the anticipated cereal shortage can be managed. To date, no life threatening situations have been reported, although some individuals are already experiencing well below normal food intake levels in a context of increasing poverty and HIV/AIDS incidence. Nonetheless, Swaziland's endowment in natural resources, human resources and social capital, coupled with civil and productive infrastructure and public services represent major assets and suggest an overall coping capacity.

A joint assessment is being conducted by the Disaster Management Task Force (DMTF) and NGOs in drought affected areas, through a survey at household level. The results will be available soon and it is strongly recommended to review the present FAO/WFP assessment in the light of the information generated by the DMTF/NGOs exercise. Complementarities should emerge that can provide a solid basis for:

• Conclusive judgement on the severity of the current situation in the different areas.
• Needs assessment - i.e., who and where are the needy; when, which and how much assistance is required.
• Response requirements - against the standards for humanitarian intervention that the government and international community are willing to adopt in this specific situation.

In fact, only a small proportion of the population (i.e., social welfare-like cases) is expected to be unable to maintain acceptable standards of food intake -it has to be recalled that the current assistance level is generally considered inadequate vis-à-vis the actual needs. Nonetheless, large population strata may be forced into asset (distress) sale in order to avoid severe food shortage, particularly in rural areas.

5.3 Strategies for Possible Food Aid Assistance

Coordination mechanisms exist, as well as platforms for peer review and accountability -particularly, CANGO's Swaziland Food Security and Rural Development Programme. A similar platform exists to help coordinating initiatives in the social area -particularly, HIV/AIDS. At government level, the National Disaster Task Force is being converted into a permanent institution and the National Disaster Management Policy enacted.

There is no need for planning large-scale food aid distribution, as long as:

• The coping mechanisms are viable and ensure a minimum income above the food poverty line.
• Markets and distribution mechanisms can ensure an adequate grain supply at affordable prices in the deficit areas - both rural and urban.

The on-going joint assessment by the Disaster Management Task Force and the NGOs is expected to provide relevant information on households to be targeted for possible assistance in food aid, seeds and fertilizers.

A number of NGOs are ready to submit to potential donors their proposal for a second four-year phase of the "Swaziland Food Security and Rural Development Programme". Ongoing activities, including community based home care for orphans and chronically ill, supplementary feeding of malnourished children and assistance to their families, are implemented by NGOs and churches. These programmes are insufficiently funded at present.

6. AGRICULTURE REHABILITATION NEEDS: A MEDIUM TO LONG-TERM STRATEGY

Beyond short-term measures necessary to restore productivity and production, the Mission also considers it essential that the country take long-term measures aimed at tackling some of the main underlying constraints which seriously affect agricultural development. A comprehensive participatory approach is needed that raises farm productivity and produces economic and resource conservation benefits. This approach would emphasise building up of soil organic matter levels through proper use of inorganic fertilizers, manure and ash, to improve soil structure and fertility, coupled with intercropping of improved cereals and legumes, conservation farming and agro forestry practices. Improved soil structure and fertility result in efficiency of plant nutrient use, thus enhancing much needed profitability of crop production. The overall benefits would be improved food security, cash incomes, dietary diversity and protection of the environment.

1 The Central Bank of Swaziland annual reports, the IMF Article IV Consultation report (July 2000) and the EIU Country Report (January 2001) are the main sources for this section..