Farm Input Supply and Pricing Policies

Generally, the most important agricultural (sectoral) policies as distinguished from non-agricultural (macroeconomie) policies are those concerned with agricultural input and output priees. Pricing of agricultural inputs is handled almost exclusively by AGRA, a commercial framers' Co-operative which has no outlets in communal areas. Input priees, adjusted for transportation cost, are the same as in South Africa.

The central objective of the government's agricultural input policy is to ensure that adequate quantity is made available at the right time at lowest possible priees and in the right mix at the farm gate. It is also the government policy that the distribution of inputs will continue to be undertaken by the private sector and seed production will be preferably left in private hands with assistance from government Seed Certification Services. The government is aware of the sensitivity of demand for inputs to their priees. Having recognized the risks involved in subsidizing the inputs for communal farmers (that they may re-sell their inputs at higher priee) , and knowing the level of affordability by smallholder farmers, the government maintains that subsidies are

Subsidies have been widely used in developing countries. In India for example, production subsidies in the short-run have involved the provision of agricultural inputs, such as fertilizers, light machinery and equipment at subsidized priees. In the long run, sorne countries provided subsidies in irrigation development and other rural development programmes. Agricultural production subsidies are aimed at increasing production and lowering food priees. For example, public investment in irrigation for staple food can lead to higher food production and benefit consumers through lower priees. Unfortunately, in Namibia, water constraints restrict irrigation possibilities especially for small farmers.

Also, the potential to improve yields by using modern inputs has been demonstrated by MAWRD/ICRISAT project that the nitrogen-phosphate trial (20 kg N and 20 kg P₂0₅ per ha) resulted in a two to three times pearl millet grain yield increase. The proj ect estimated that in a short-term a quarter of the pearl millet farmers already using fertilizer may, if management is improved, have their yield increased up to 60 %. The HYV also produce almost the same results. To avoid the perpetuation of financial liability, the government has to work out a modality when to stop the subsidies. A lesson can be learned from Zimbabwe which " had a successful record of gradually removing subsidies on cereals" (The Courier 1989 p87).

The agro-chemical (pesticides) policy is designed to be based on sound environmental and economie principles and on achieving

chemicals which are mainly used by commercial farmers are handled by Agra Co-operative.

3.2.2 Agricultural Research and Extension

Research is another area which deserves clear government policy and high priority in the allocation of public funds. In the literature, i t is stated that there are no clear-cut criteria determining the adequacy of public sector expenditure on this item, but as a general rule the aim should be to devote at least one per cent of the agricultural value added to research. There is also a strong evidence that countries which have made sizeable investment in agricultural research and extension, irrigation and rural infrastructure have achieved impressive agricultural productivity gains. Brazil is one of them (Dorosh and Valdés, 1990).

Namibia does not have a long history in research like other countries, for example Zimbabwe, where research, particularly plant improvement, dates back to 1909 and where the era of modern plant breeding began in the 1930s with hybrid maize. Agricultural research in Namibia has been very limited on livestock. Little or nothing was done on crops before independence and there was almost no communication with international research institutions. Attempts were made by an NGO - Rosing Foundation - to communicate with SADC/ICRISAT since 1986. At the national level, the official link

with ICRISAT/SMIP began after independence .¹⁶ Since then programmes and projects have been initiated to address research in neglected areas. It is on this basis that the government policy is putting more emphasis on adaptive research and rationalization of the existing network of research stations. The government is concentrating its efforts on farm research in arder to provide appropriate technology for immediate adoption by farmers, with the aim of increasing agricultural production.

After the country gained access to SADC/ICRISAT/SMIP, the research activities were delegated to the Ministry of Agriculture, Water and Rural Development (MAWRD) . Mahenene Research Station was re-opened after 10 years of closure. In 1990 MAWRD requested ICRISAT to multiply millet high-yielding variety (HYV, Okashana 1) seed for Namibia and 10.5 tons of seeds were produced. The seeds were sold for 1 Rand/kilogramme to farmers for the 1990/91 season.

During the 1990/91 season, Namibia produced 25 tons of seeds and the other 22-30 tons are expected to come from USAID.

At present, MAWRD is running three projects in the field of millet research. These are: (1) On-Farm Testing of Improved Pearl Millet Varieties; ^{( 2)} On-farm Resource Management Research Programme; (3) Namibia National Pearl Millet and Sorghum Breeding Programme. The first two projects jointly implemented by MAWRD/ICRISAT, started in December 1991 and in November 1992 respectively and are run by foreign experts with Namibian

16 SADC stands for Southern Africa Development Commission;

counterparts. The last one started during the 1990/91 season, at Mahenene, Mashare, Uitkomst research stations and Ogongo Agricultural College and is run by Namibians^{17 •} Surveys and studies to collect information on millet also took place and one of such surveys was the 1993 MAWRD/ICRISAT Pearl millet Sub-Sector survey which provided valuable information to the ministry. There are other projects towards millet promotion like Farm Support Programme (started 1990/91 season) and initiated by former First National Development Corporation now National Development Corporation (NDC) .

Like all other services, extension for communal farmers has also been lacking. Therefore the government is aiming at strengthening the capacity of the extension service and increase the number of extension field staff. Also the ratio of female and male extension officers will be altered in favour of female extension officers to recognise and address women's concerns in agriculture.

During the first five years of independence, most of the extension capital budget was invested in infrastructures, mainly Agricultural Development Centers (ADCs) and regional offices. ADCs are complexes which will cater for office space, distribution of inputs, marketing facilities and demonstration plots. The

17 Mahenene Research Station is in the far north of Owamboland

MAWRD/ICRISAT millet research projects are operating from sorne of the already completed ADCs.

3.2.3 Agricultural Training

The importance of education to development of Namibia' s economy was reflected in the 1994/95 budget when the Ministry of Education and Culture got the biggest share of the cake: 28 % of N$3,500.8 million total budget compared to (4 %) for Agriculture.

This is a reflection of the fulfilment of the government's objective for equity and access to quality education. There are four Agricultural Colleges in the country (Mashare, Neudam, Ogongo and Tsumis.) Mashare and Ogongo closed during the war, just to be reopened after independence. Tsumis was not opera ting at full capacity and only Neudam was in full operation. Government' s specifie objective is to create a system of agricultural education that will contribute to agricultural development. To meet this objective the government has been upgrading the facilities at Ogongo for the first four years of independence. Most of the funds used were from the EEC with matching funds from the government.

3.2.4 Marketing and Pricing Policies

Namibian agricul tural marketing has been characterized by their close integration with those of South Africa, distortions, in

between cormnercial and cormnunal areas and all forrns of market imperfections . . This integration has influenced the marketing of agricul tural products in Namibia. The government intervenes in priee setting for controlled crops (maize and wheat) through Namibia Agronomie Board and establishes uniforrn fixed farrn-gate priees for these crops. The priees are usually announced in advance of crop planting. Until recently, when the government began trying to integrate millet into the national economy, the priee for millet has been left to market forces in the rural cornmunities.

Realising the importance of millet and deteriorating balance of payrnents, the government ernbarked (since 1990) on increasing millet production to substitute for maize imports, to increase food security and to create employrnent. Up to now (1995) the domestic production has been sustained by means of protection. However, with the expected shift from quantitative restrictions on imports to tariffs, producer priees for maize are likely to fall.

Government policy is to cornmercialize millet flour compete wi th

marketing of

maize flour in the forrnal market.

millet has become a concern not

Recently, only for

to the the government but also for parastatals and Non-Governmental Organisations (NGOs) . The former FNDC started research on millet processing and realised that: "in order to secure the rightful place for millet in the country' s objective of national and household food security, an integrated programme to promote this

processed into marketable and consumable forms in large enough volume" (NAB 1992). A prototype thresher machine was designed to suit Namibian conditions. The demonstration was overwhelming. This project is now officially supported by the Ministry of Trade and Industry and MAWRD, with the Namibia Development Corporation (NDC) as the implementing agent.

In 1990 the cabinet approved the launching of the millet marketing pilot project. That led the way to development aid to the tune of 75,000 ECU (N$259,336) which was given to the Namibian Agronomie Board to implement the project. About 984 tons of millet were bought in Owambo and Kavango and processed.

In 1991 a feasibility study was undertaken by Natural Resource Institute (NRI-UK) at the request of MAWRD. The aim was to a~gjment ~

the engineering skills available for millet processing at Musese in Kavango and improve the production of high grade meal at FNDC project. One of the recommendations from the study was that MAWRD should look closely at the problem of deficit and surplus farmers so as to encourage the production of more grains for industrial and semi-industrial processing.

3.2.5 Agricultural Credits

The government has recognised that the access to agricultural finance is necessary to enable farmers with insufficient capital of the ir own to obtain agricul tural inputs, technology and

1994). In this regard, the government urges the financial institutions to extend their services to rural areas. Meanwhile the government began (1992) to implement short- and medium-term credit loans to communal farmers. The coverage of this Communal Farmers' Advances' (Loans) Scheme is still limited. Loans are being provided at a highly-subsidized rate of interest. The exceptional cases for additional subsidies in communal areas will be taken into account.

The government will also support the change in marriage legislation to enable women to have access to credit. The government policy is to have uniform rate of interest for agricultural credit nationwide. It is worth noting, however, that the government will provide no guarantee for the loans which have been granted.