PK -kk- o

FOOD CROP MARKETING IN NORTH SHABAo NORTH AND

SOUTH XIVU BUMBA ZONE (EQUATEUR) AND KWILU

SUBREGION (BANDUNDU)

The Snall Farmer Mark Access (SFMA) Prcjec Cf3j

May 1983

TAMLE CF COTN

List of Tables v

List Of Yap and nYig V

YA of Zaire

Ab viations viii

Preface

Dcecative Swzuazy i

E rgnic C raints xiiConstrait tO IrICreaSIng AgziCmfl~ra1 xiii

Prcxluction andI Maketi

Secr and~ local Initiatives 7be Need for Ltbert ticns that Suat Private xix

Stuctie of the Rapart sod

MEX 1 S of Small Farmer Marketing Acas nmsp=t 1 System ard cCmstrts

Cbjectives 1 I Kongolo - Nytzu Arm 1 II Kivu 9iii Bumb 15 IV Smuvry andCocu1nins 19

ANOE 2 Maize Pxb--ti and ftrketin in Narth Shaba 21

1 Productio Marketing and E ports of Maize in 21 Nth Shaba

A Maize Pzrductiim 21 B Increases in Mize Marketing 24 C Maize Marketing Channes and Flos 25 D Trends in Maize Prie 26

3n Production and Marketingj of Other Foodcrops 29

III am aints to Increasing Prodtction and MArketing 31 of Food Crop in N=rth SMba

A Small Fanex Access 31 B Suall er MmketimAccess 33 C Catints Facing Large Traders 34

ANNE 3 Agicultural Producticn and Marketing in South 35

and Norh Kivu

S Sumauzy and Policy Coclusion 35

II Food Crop d and Miwdeti in Kivu 36

A PxA Crapzovitio in South and North 36 Kivu Subregions

B Marketing of Agricul1t~al Prodzxm from 3 North Kivu

I=- mtraints to EqzxUi Aicul l 42 Pzouct~iand MaRketing in Kivu Region

IV Livesk Production and Mlarketilig in 4 North Ki-ju

A Cattle Production 44B RwmU Stock 45 C Cttle Marketing ad Flos in North Kivu 46 D znst aints- to Eqwampi Lvestock P dcz 5o

and Dcrts

7 Fish Production an arketing in ivu 52

ANNEX 4 Rice Procttion and Mawting in Bumna 55

1 Summary and Poli-y Cnclusios 55

A IMtoA-ton 55 B C t t to 56 C Contraints to Market Access and 56

Marketing DO Potetics 57

nI e Prcducticn arA Marketing 57

A Idce Production 57B Rice Maktn and Processing 60

3f11 Principal Cdstrant to Expading Riae 64 Produiction and Marketing in Bumba

A Production Constraints 64

BI onstraints to Iroving Rice Marketing 65

17 Production ard Marketing of Other Foodcreps 67

ARM 5 grioultta Markpting in zIWu Suregion 70

(Bntxxu)

I Sumiry and Policy rClusi s 70

II Field Trip to Kiwit 74

A Estimated Shipments of Manioc ffi Baz3u 74 to Kshasa

B Retzil Price Trends -for he Town of Kikwt 75 C Ma= (Qqwcrgi de eve -nta l 78

Liteqe diu nwaero-R41u) D Puvate Firms Interviewed in Kikwit 82

iF rield Tp to Idiofa 89

A Acgicultural Mketng in the Idofa ZCe 89B Principal Bayers of pici-tamlr Prch= 90 C grculltu Pz~dction arx Prices 92

IV Field Trip to Bulmigu 95

A Ro~ad Matenance in the Blumgu Zone 95 B Fernandes c amp CI 96 C Visit to the Kin5ono Market fkwzx coU= vly 98

Masi - Mmmb a Z o n )D ANEZA d the Role of Sa2 to Medium Scale

Mrcbants in ~giz~rlMareting

AMEX 6 Agriculba- Marketing ad Applie Research ActivitLes 102 in Kinshasa

I n eesdc Feames C nnants (AFBOZ) 102

1r Agriculb=al Marketing Siie and Interventicis 102 of the Condition Feminine et Soaio-Clturale of the nivsicn Er aique Cndition Femini

III Visit to Kinshsa Mar eace 103

IV Applied fesearch Activities of the Bureau dAnalyse 104 Bcxxordque Service dEtudxes Dpatent delgriculture et du Develocpe-en Fal

V Retail and Wholesale Price Data for od 104 Crops Marketed in Kinshasa

VI Prposed Survey of Foxd Shipments to Kinshaa 105

VII River Transport of Agmcultural C ties 106 to Kinshasa

VIIPo tix and Ed-sribio of Sac in Zalr 103

Indviduals Cm During the Study 3n0

BibW Jogah 114

LIST CF ABLM

ETIEM SM44f

Table 1 Smary of Major Costrints to P iiv in Selected Areas of Zaire

Table 2 Szmmazy of Major Comtraints to Market xvi Aeas and Marketir in Selected Areas of Zaire

AiNEX 2

T0-i e S-i Maize Prdution and Marketing the North 22 Shaba Project Area 197S-79 through 1981-82

Table S-2 Mai2a Pxdction and HMa tI in the 23 Korjoio and Nyim= Subregirmns 1978-79 thmtgh 1981-82

Table S-3 Maize Prices in tte North Shaba Project Area 27 1979-1982

Tahle S-4 Marketed antities of Fcdcrqps Other than 30 Maize in th North Shaba Project Area by S 1978-79 tough 1981-82

IN= 3

Table K-1 Retail Food Prices Jarary 1982-Fre zzy 1983 38

Table K-2 Production and Cmmrerialization of Primi1 40 Food Crops in North Kivu 1979-1981

Table K-3 Mnthy Air Shiprents of Goods and Passengers from 41 Gcia to Kinshs by Katale Aero frarsport 1982

Table K-4 Cattle Inport and Export Balar Sheet for North 48 KiLvu 1982

Table K-5 Anmmal Air Shipemts of Beef from Ga Airport by 51 Destination 1979-1982

Table K-6 Monthly Fish Prodution by PEVI (Cooperative des 54 Pe s de Vitshumbi)

AN=~ 4

Tuble B-1 aOY Prod=ticn in the uba Ze197980 58 thro2g 198182

Table B-2 Market Saes of Principal Firms in Purdcasing 61Pv3y in the amiba Zrxne 1981-82

Table B-3 Yanthly Shipn of Rice by Private fanmpte= 63 from Bmba Januarl- Decerber 1982

Table B-4 Prices for Seleted Ccnsmier Goods in Itimbri 66Collectivity (umba Zone) Early 1982 and March 1983

Table B-S Estiated Prod of Princip Food Crops 68 in the Dwba Zone 1979-80 tbxoh 1981-82

Table B-6 Quantitl -a of Ag lltumral Ommdities frarsore 69 by =M frm Bmba to All Pcrts on the Zaim Rivers 1981 and 1982

ANMXE 5

Table 9-1 Retail Price Indices for Urban oushls in lWitt 76 Febuay c 1982

Table W-2 Retail Prices of Selecte4Arogua umdte 77and Cosumer Gods at Markets in the Towm of KikYit Febrtry-Dampwnbar 1982

Table M+-3 List of Shareholers IK 79 Table W-4 Su xazy CoA s prpos Rsed Bridge and 81

Ferry yiree pro w

Table W-5 Evlution of Prices for Principal Agricultural as Ccznofdties in the Ad-l Subregion 1980-1983

Table W-6 Mx lthly Shipments of Manioc to Kinshsa by Ste 8 ~langelu First O~rter 1983

Table M-7 Aricultua o and ti mon 93 in Idiofa Zone 1980-81 mid 1981-82

-(Table - Far ate Prices for Selected Czomities 1982 and 94 1983

Table M-9 Agricaltural awnity Purd ases by Fernanes 97 Inasamp CE 1980-1982

ANNEX 6

Table XN-1 Ammal Sbipnents of Selected Comucdities by A 106 fxrn Points Along the Zaire Paver Beoe Kisanganiand R to Kinshasa 1981-1982

Tabl XM-2 Amml Shipmts of Selected e 107 by a fra Points Along the asai and-_iiu Rivers to Kinshaa 1980-982

List of Figures ar 3M

Map of P~xblic of Zaire MmasEartatio1 Nabcak ix

Figure K-1 E3Intl d Cattle FawsNrth Kivu 1981 ithin to and Fro 47

ABBREVIATIONS

AFECOZA Association des Femmes Commercantes du Zaire

AMIZA Agence Maritime International Zaire

ANEZA Association National des Entrepreneurs av Zaire

CAPACO Societe de Cafe Papaine et Commerce

CIDA Canadian Internaticnal Vnvelopment Authority

CODAIK Compagnie du Developpement Agro-Paitoral du Kwango-Kwilu

DOA Department of Agriculture and Rural-Development

ESTAGRICO Societe Agricole et Cotoniere de lEst

FED Ponds Europeens de Developpement

GOZ Government of Zaire

INERA Institut National pour lEtude et la Recherche Agronomiques

ONATRA Office National des Transports

OPEZ Office des Petites etMoyennes Entreprises

OR Office des Routes

OZAC Office Zairois de Controle

PLZ Plantation Lever au Zaire

PUM Programme National Maize

PNR Programme National Riz

PNS Projet Nord Shaba

PRONAM Programme National Manioc

SNCZ Societe National Des Chemins de Fer du Zaire

SOFIDE Societe Financiere pour le Developpement

TISSAKIN Filatures et Tissages de Fibres a Kinshasa

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PREFACE

This study is not a nationwide agricultural marketingassessment The USAID Small Farmer Marketing Access Projectteam travelled to four different regions of Zaire in the course of the study but the team was unable to visit manyimportant agricultural production areas Moreover the team spent too little time in each of the four regions to conductanything other than reconnaisance surveys Yet the problemsand constraints in the marketing of food crops and inputsinto food crop production were found to be similar acrossregions of Zaire Differences do exist of cburse owiag todissimilarities in geography climate demographiccharacteristics the resource base infrastructural development and the mix of food and industrial cropsHowever a number of common themes emerged whichcharacterize agricultural marketing constraints in the fourregions visited and probably other regions of Zaire as well

The report begins with an executive summary thatdiscusses these common constraints and opportunities acrossregions and summarizes the policy implications of our findings The summary is followed by six annexes whichinclude the transport consultants report and more detaileddiscussions of agricultural production and marketing in thefour regions visited None of these individual reports isexhaustive in its coverage of transportation andagricultural marketing constraints and opportunities

As is is common to all short term work the risk ofdrawing incorrect inferences and making misstatements ishigh The team is solely responsible for any errors andomissions that do eyist in the report Interested readers are recommended to consult other studies carried out by theWorld Bank FAO the FED the Canadian Cooreration andvarious agencies of the Government of Zaie (GOZ) forfurther information Additional references are found in the bibliography

The field work for this study was conducted duringseven weeks in March and April 1983 The teams itineraryis outlined below

March 5-9 Briefing Preliminary Interviews and Literature Review in Kinshasa

March 5-10 Field Work in Kongolo North Shaba

March 15-17 Field Work in Bukavu South Kivu

March 17-21 Field Work in North Kivu

Maa-ch 22-25 Field Work in Bumba Zone Equateur

March 26-April 4

Write-up and Discussion of Teams Preliminary Findings in Kinshasa

April i-12 Field Work in Kwilu Subregion Bandundu

April 13-16 Write-up and Discussion of Kwilu Trip_Report in Kinshasa

April 18-23 Followup Interviews and Researcae Kinshasa

The SMFA team was comprised of

Dr Duncan Miller USAIDSampTMD SFMA Project ManagerEconomist

2 Dr John Eoltzman SFMA Core Staff Member AgriculturalEconomist

3 Grace Finne Independent Consultant Transport Economist

Dr Miller is responsible for much of the institutional analysis particularly for the identification ofinstitutional and policy constraints to increasinqproduction and improving marketing Dr Holtzman analyzedagricultural commodity production marketing flows andpricing Ms Finne assessed the transport system in each ofthe four regions and identified transport constraints and opportunities

lndividuals n the USAID Mission in Kinshasa whoparticipated in the field work were David Leong (Design andEvaluation Office) Tshishiku Kabundi (Agricultural andRural Development Office) and Henriette Emond (ProgramOffice) Ms Emond also drafted the section of the Kwilutrip report on IdJofa zone Cit Ngumbu of the BureaudEtudes Department de lAgriculture accompanied the team to Bumbaand provided valuable insights

The team wishes to acknowledge the cooperation andassistance of many individuals and organi-ations in carryingout the study The USAID Mission is thanked for providinguseful information direction and logistical supportGovernment o2 Zaire officials officials in donor agenciesand development projects contractors to USAID traders processors and farmers are all ackzowledged for theirpatience and candor in responding to the teams endless questions

Economic Constraints

Zaire is a vast country of great geographic climaticand agricultural diversity Yet constraints to agriculturalproduction and marketing are strikingly similar acrossdiverse regions These similarities reflect in large partmacroeconomic difficulties common to all of Zaire Themacroeconomic climate is characterized by

1 Foreign exchange scarcities rnd hence critical shortages of imported capital goods vehicles spare parts and fuel

2 Burdensomi foreign debt and large government deficits

3 Deteriorating transportation and marketing infrastructure

4 Scarcity of trained manpower which leads to poormanagement of scarce resources particularlyin the public sector

5 Financial irresponsibility and widespreaddiversion of development funds and resources

6 Declining terms of trade for food crops vis-a-vis consumer goods and high levels of food imports(made artificially cheap by the overvalued exchange rate) which provide gravedisincentives to food crop production

Macroeconomic conditions in Zaire have deterioratedprogressively since the decline in international commodityprices in the mid 1970s particularly for copper and cobaltThe abortive program of zairianization implemented in1973-74 transferred control from foreign owned and managedfirms to poorly trained Zatrois who in many instancesneglected mismanaged and undermined the financial viabilityof those enterprises Although ownership was later restored to qualified expatriate managers a further blow was struckby the demonetization of 1979-80 which crippled many smalland medium size enterprises As the state of the macroeconomy has declined so has private sector confidencein the government of Zaire and the countrys economicfuture The recent and precipitious erosion in the value ofthe Zaire on the parallel market has further contributed toprivate sectir pessimism and greatly complicated anyprospects for stabilization and later growth

The macroeconomic environment is bleak and recoverywill be a long and arduous process requiring debtrescheduling massive resouzce transfers from multilateral and bilateral donors greatly improved macroeconomic planning and management better design and implementation ofongoing and future projects and far greater financialdiscipline While the public sector has performed less thanoptimally during the past decade poorly managing funds and resources and exacerbating scarcities the private sectorhas performed surprisingly well under some of the worstbusiness conditions in the world Private firms have continued to provide agricultural inputs market

agricultural commodities supply connumer goods and in someinstances maintain the collapsing transportation ardmarketing intrastructure in the face of acute shortages andoften bothersome government intervention In servicing therural areas private firms have sometimes establishedmonopolies or monopsonies Faiaers and sall traders arcusethe larger firms of unfair practices Yet the pri-atesector has supplied urban areas with foodstuffs andparticipated in the market of cash crops that earn foreignexchange with greater efficien-y and at lower cost than the public sector is capable of doing

Constraints tr Increasing Agricultural Production and Marketin-

The Small Farmer Mar eting Access team found commonthemes in conducting rapid assessments of agriculturalproduction and marketing constraints The principalconstraints to production are presented in Table 1 andconstraints to marketing in Table 2 The most constrainingfactors to increasing food crop production were found to be

Inadequate supply and distribution of seedand the absence of commercial seed productionand distribution

2 Scarcity of agricultural implements in some areas

3 No use of modern agricultr=tl inputs such as fertilizers insecticides herbicides animal traction or mechanical inputs (tractorstillers pumps etc)

4 An underfunded and poorly trained extension service generally lacking any improvedpackages to extend to farmers As enforcers of minimum acreage requirements extension agents typically have bad rapport with rroshyducers

5 Land degradation through uncontrolled soil erosion slash and burn agriculture and abandonment of crop rotation in some areas

6 Labor shortages in areas near large cities or where returns to alternative enterprises(gold and diamond prospecting smugglingof coffee and consumer goods) are signifishycantly higher than returns to farming

7 Irregular evacuation of food crops from certain production zones particularly in more isolated areas Spoilage is high and produce is not marketed during some yearsUncertain market access is a disincentive to

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ment and an emphasis on regulating rather than facilitating agricultural production and marketing under-mines confidence in government instittions at the local level The government is viewed increasingly as an adversary

The Need for Interventions that Support Private Sector and Local Initiatives

While it is not difficult to identify constraints to agricultural production and marketing in Zaire the designand implementation of interventions to alleviate these constraints is exceedingly difficult in the presentmacroeconomic and policy environment Rather than prescribespecific interventions the SPMA team will offer some general counsel and words of caution

In each of the four regions it visited the SFMA team was impressed with the dynamism of the rural population and the capacity of private firms to move and transform goodsunder difficult sets of circumstances In contrast public sector agencies including the agricultural extension service the Office des Routes ONATRA and SNCZ local offiLes of Economic Affairs and parastatal marketing agencies performed rather poorly To be fair it is important to note that public agencies receive less than adequate support from the central government in the form of funds material training supervision and incentives Yet given the existing perverse Set of incentives facing GOZ officials which encourage financial mismanagerant and poor job performance it is impossible to expect majorimprovements in public sector accountability and performance in the medium run USAID is therefore encouraged to work closely with local institutions (cooperatives missionary groups ANEZA chapters PVOs and the private sector in tackling agricultural production and marketing4problems Marketing interventions lend themselves well to privatefirms in Zaire which move food crops from farmgate to market process agricultural products and distribute agricultural inputs and consumer goods Moreover privatefirms maintain a good proportion of the rural roads in Zaire through contracts with the Office des Routes access to the Fonds de Relance Econmmique and self-financingBy ensuring adequate road maintenance private marketing agents reduce marketing costs increase capital turnover and volume of produce buying and establish good rapport with the rural population served by these roads

In promoting the devlopement of agricultural marketing in a particular region USAID should make its assistance conditional upon greater indirect and direct resource transfers to private firms and local organizations Devising new arrangements and institutions for channeling aid will require imagination care and skill in

negotiating Privato firms should not be allowed to generate and determiri the use of funds without supervision as in the case of the -onds de Realance Economique Careful monixoring of resource flows and training in financial management will be necessary in order to hold aid recipientsaccountable And it is in the areas of training managementand financial analysis that USAID enjoyTs a comparative advantage

In many regions of Zaire rehabilitation of existingroads and improvement of feeder road networks wil lead to increases in marketed output These increases will result irom greater incentives to produce Greater availability of agricultural inputs and consumer goods increased competition among buyers and higher agricultural prices(resulting from transporters cost savings and greatercompetition) will provide adequate incentives In a periodof declining agriculture commodity terms of trade howeverthe effect of increased commercial activity on rural households nutrition will need to be monitored carefullyWhile road rehabilitation and construction are not panaceasimproved access will facilitate increased agriculturalproduction and marketing in many areas of Zaire which are presently seviced irregularly or not at all by privatemarketing agents

In order to enable small and medium size private firms to benefit fully from improved access USAID will need to provide medium term investment and short term agriculturalbuying credit The existing financial institutions particularly the BCZ and SOFIDE funnel most of their credit to large well-financed firms Although these larger firms could use mure funds (and they do provide useful marketingservices) access to credit does not constrain their activites to the extent that it does smaller firms HenceUSAID should seek to complement those financial institutions that assist larger firms By designing institutions that improve small traders access to vehicles spare partsfuel storage facilities and funds for agricului-iral buyingUSAID will help to increase competitiotA for prodice This will help to discipline larger firms who collect monopoly rents in rural areas where they are thc auie buyers and sellers At the same time that smaller firms obtain better access to formal credit USAID will need to train these firms in financial management as well as to monitor closelythe loan disbursemene and repayment process Such interventions are necessarily USAID-resource intensive and entail higher management costs but the investment in human capital development in he private sector has a highpotential payoff PVOs such as the Peace Corps and AFRICARE could be contracted to provide the necessary technical and managerial resources Missionary organizations could also help

USAID can most effectively intervene in agriculturalmarketing in Zaire by concentrating its scarce resources in one or two regions prettzably where USAID projects are already underway Interventions that seek to improve rural and feeder roads provide short and medium term credit and management training to smaller marketing agents monitor rural household nutrition and improve distribution netvwors for seed agricultural implements and consumer good hAv6- obvious complementarities that will reinforce the agricultural development process While the primaryobjective of UShID interventions should be to improve the liveinood of rural producers in Zaire an important albeit secondary objective may be to improve the food supplysituation in large urban areas The proximity of regionFsuch as Eandundu and Bas Zaire to Kinshasa and of North Shaba to Lumbumbashi and other cities in the copper belt is advantageous in that it permits satisfaction of the above two objectives

Structure of the Report

Each of the separate regional marketing reports and the transport consultants report appear as individual annexes The transport annex (no 1) describes the transportation systems in three of the four regions visited (excluding Kwilu Subregion) identifies transportconstraints and prescribes interventions in the transportsector that merit USAID examination Annex 2 analyzes maize production and marketing in North Shaba and discusses constraints to increasing production and improving marketingthat still exist after five years of USAID intervention in the North Shaba Development Project Annex 3 examines agricultural marketing in the area around Bukavu (SouthKivu) and in North Kivu Special attention is devoted to marketing of high value produce such as vegetables and beef to urban markets in other regions of Zaire (principally Kinshasa) Annex 4 analyzes rice productionand marketing in the Bumba zone identifies constraints and prescribes means for alleviating these constraints Annex 5 examines marketing of a broad range of staple crops from Kwilu Subregion (Bandundu) and discusses issues of institutional coordination and jurisdiction in a regionwhere a number of projects are currently underway The last annex (no 6) describes agricultura marketing in the Kinshasa food shed and discusses the applied research programs on marketing conducted by several organizations

ANNEX 1

STUDY OP SM4ALL FARMER MARIETIHG ACCESS RWISPORT SSTES AND CotSTRANTS

Trip Report March 10-March 25 1983 KOtGOLO-AIORT SHSA (March 10-iS)

BUKAVU-SOUTH VU (March 15-17) GONA - NORTH KIVU (March 17-21) BUMB - EQUT=UR March 21-25)

By Grace W Finna Consultant

Objectives

Th objectives of the transport reconnaissance of selective uarketing centers ware - To obtain an overview of existing tranuport systs for marketing of agricultural c-odities

- To identify transport constraints in marketing of agricultural Commoditics

- To indicate transport impro-7ment prmjects within the overall framework of AID programs for Zaire

- To make a preliminary ranking of alternate transport projects according to perceived benefits for marketing of agricultural products

Eonglo - 2ynzv area

1 Overview of existing system for marketing of agricultural commodities

1211 Tranport of Corn

Corn is the most important agricultural co~modiLy marketed fro the Kongolo-gyun-u area to major consumption ceaters These centers are mainly located in th-i South Rhaba industrial belt including Lubumbashi Likasi and Kolwvai The marketing season starto in April which also marks the beginning of the dry seaon Marketing o corn ends in September The rainy season usually starts in November The fact that corn is marketed in the dry season has the following transport implications

- Agricultural feeder roads are passable even with a minimum of maintenance effort

- Trucks registered outside the corn production area many reach the area by national rods in spite of the generally poor condition of these roads

TAMLE CF COTN

List of Tables v

List Of Yap and nYig V

YA of Zaire

Ab viations viii

Preface

Dcecative Swzuazy i

E rgnic C raints xiiConstrait tO IrICreaSIng AgziCmfl~ra1 xiii

Prcxluction andI Maketi

Secr and~ local Initiatives 7be Need for Ltbert ticns that Suat Private xix

Stuctie of the Rapart sod

MEX 1 S of Small Farmer Marketing Acas nmsp=t 1 System ard cCmstrts

Cbjectives 1 I Kongolo - Nytzu Arm 1 II Kivu 9iii Bumb 15 IV Smuvry andCocu1nins 19

ANOE 2 Maize Pxb--ti and ftrketin in Narth Shaba 21

1 Productio Marketing and E ports of Maize in 21 Nth Shaba

A Maize Pzrductiim 21 B Increases in Mize Marketing 24 C Maize Marketing Channes and Flos 25 D Trends in Maize Prie 26

3n Production and Marketingj of Other Foodcrops 29

III am aints to Increasing Prodtction and MArketing 31 of Food Crop in N=rth SMba

A Small Fanex Access 31 B Suall er MmketimAccess 33 C Catints Facing Large Traders 34

ANNE 3 Agicultural Producticn and Marketing in South 35

and Norh Kivu

S Sumauzy and Policy Coclusion 35

II Food Crop d and Miwdeti in Kivu 36

A PxA Crapzovitio in South and North 36 Kivu Subregions

B Marketing of Agricul1t~al Prodzxm from 3 North Kivu

I=- mtraints to EqzxUi Aicul l 42 Pzouct~iand MaRketing in Kivu Region

IV Livesk Production and Mlarketilig in 4 North Ki-ju

A Cattle Production 44B RwmU Stock 45 C Cttle Marketing ad Flos in North Kivu 46 D znst aints- to Eqwampi Lvestock P dcz 5o

and Dcrts

7 Fish Production an arketing in ivu 52

ANNEX 4 Rice Procttion and Mawting in Bumna 55

1 Summary and Poli-y Cnclusios 55

A IMtoA-ton 55 B C t t to 56 C Contraints to Market Access and 56

Marketing DO Potetics 57

nI e Prcducticn arA Marketing 57

A Idce Production 57B Rice Maktn and Processing 60

3f11 Principal Cdstrant to Expading Riae 64 Produiction and Marketing in Bumba

A Production Constraints 64

BI onstraints to Iroving Rice Marketing 65

17 Production ard Marketing of Other Foodcreps 67

ARM 5 grioultta Markpting in zIWu Suregion 70

(Bntxxu)

I Sumiry and Policy rClusi s 70

II Field Trip to Kiwit 74

A Estimated Shipments of Manioc ffi Baz3u 74 to Kshasa

B Retzil Price Trends -for he Town of Kikwt 75 C Ma= (Qqwcrgi de eve -nta l 78

Liteqe diu nwaero-R41u) D Puvate Firms Interviewed in Kikwit 82

iF rield Tp to Idiofa 89

A Acgicultural Mketng in the Idofa ZCe 89B Principal Bayers of pici-tamlr Prch= 90 C grculltu Pz~dction arx Prices 92

IV Field Trip to Bulmigu 95

A Ro~ad Matenance in the Blumgu Zone 95 B Fernandes c amp CI 96 C Visit to the Kin5ono Market fkwzx coU= vly 98

Masi - Mmmb a Z o n )D ANEZA d the Role of Sa2 to Medium Scale

Mrcbants in ~giz~rlMareting

AMEX 6 Agriculba- Marketing ad Applie Research ActivitLes 102 in Kinshasa

I n eesdc Feames C nnants (AFBOZ) 102

1r Agriculb=al Marketing Siie and Interventicis 102 of the Condition Feminine et Soaio-Clturale of the nivsicn Er aique Cndition Femini

III Visit to Kinshsa Mar eace 103

IV Applied fesearch Activities of the Bureau dAnalyse 104 Bcxxordque Service dEtudxes Dpatent delgriculture et du Develocpe-en Fal

V Retail and Wholesale Price Data for od 104 Crops Marketed in Kinshasa

VI Prposed Survey of Foxd Shipments to Kinshaa 105

VII River Transport of Agmcultural C ties 106 to Kinshasa

VIIPo tix and Ed-sribio of Sac in Zalr 103

Indviduals Cm During the Study 3n0

BibW Jogah 114

LIST CF ABLM

ETIEM SM44f

Table 1 Smary of Major Costrints to P iiv in Selected Areas of Zaire

Table 2 Szmmazy of Major Comtraints to Market xvi Aeas and Marketir in Selected Areas of Zaire

AiNEX 2

T0-i e S-i Maize Prdution and Marketing the North 22 Shaba Project Area 197S-79 through 1981-82

Table S-2 Mai2a Pxdction and HMa tI in the 23 Korjoio and Nyim= Subregirmns 1978-79 thmtgh 1981-82

Table S-3 Maize Prices in tte North Shaba Project Area 27 1979-1982

Tahle S-4 Marketed antities of Fcdcrqps Other than 30 Maize in th North Shaba Project Area by S 1978-79 tough 1981-82

IN= 3

Table K-1 Retail Food Prices Jarary 1982-Fre zzy 1983 38

Table K-2 Production and Cmmrerialization of Primi1 40 Food Crops in North Kivu 1979-1981

Table K-3 Mnthy Air Shiprents of Goods and Passengers from 41 Gcia to Kinshs by Katale Aero frarsport 1982

Table K-4 Cattle Inport and Export Balar Sheet for North 48 KiLvu 1982

Table K-5 Anmmal Air Shipemts of Beef from Ga Airport by 51 Destination 1979-1982

Table K-6 Monthly Fish Prodution by PEVI (Cooperative des 54 Pe s de Vitshumbi)

AN=~ 4

Tuble B-1 aOY Prod=ticn in the uba Ze197980 58 thro2g 198182

Table B-2 Market Saes of Principal Firms in Purdcasing 61Pv3y in the amiba Zrxne 1981-82

Table B-3 Yanthly Shipn of Rice by Private fanmpte= 63 from Bmba Januarl- Decerber 1982

Table B-4 Prices for Seleted Ccnsmier Goods in Itimbri 66Collectivity (umba Zone) Early 1982 and March 1983

Table B-S Estiated Prod of Princip Food Crops 68 in the Dwba Zone 1979-80 tbxoh 1981-82

Table B-6 Quantitl -a of Ag lltumral Ommdities frarsore 69 by =M frm Bmba to All Pcrts on the Zaim Rivers 1981 and 1982

ANMXE 5

Table 9-1 Retail Price Indices for Urban oushls in lWitt 76 Febuay c 1982

Table W-2 Retail Prices of Selecte4Arogua umdte 77and Cosumer Gods at Markets in the Towm of KikYit Febrtry-Dampwnbar 1982

Table M+-3 List of Shareholers IK 79 Table W-4 Su xazy CoA s prpos Rsed Bridge and 81

Ferry yiree pro w

Table W-5 Evlution of Prices for Principal Agricultural as Ccznofdties in the Ad-l Subregion 1980-1983

Table W-6 Mx lthly Shipments of Manioc to Kinshsa by Ste 8 ~langelu First O~rter 1983

Table M-7 Aricultua o and ti mon 93 in Idiofa Zone 1980-81 mid 1981-82

-(Table - Far ate Prices for Selected Czomities 1982 and 94 1983

Table M-9 Agricaltural awnity Purd ases by Fernanes 97 Inasamp CE 1980-1982

ANNEX 6

Table XN-1 Ammal Sbipnents of Selected Comucdities by A 106 fxrn Points Along the Zaire Paver Beoe Kisanganiand R to Kinshasa 1981-1982

Tabl XM-2 Amml Shipmts of Selected e 107 by a fra Points Along the asai and-_iiu Rivers to Kinshaa 1980-982

List of Figures ar 3M

Map of P~xblic of Zaire MmasEartatio1 Nabcak ix

Figure K-1 E3Intl d Cattle FawsNrth Kivu 1981 ithin to and Fro 47

ABBREVIATIONS

AFECOZA Association des Femmes Commercantes du Zaire

AMIZA Agence Maritime International Zaire

ANEZA Association National des Entrepreneurs av Zaire

CAPACO Societe de Cafe Papaine et Commerce

CIDA Canadian Internaticnal Vnvelopment Authority

CODAIK Compagnie du Developpement Agro-Paitoral du Kwango-Kwilu

DOA Department of Agriculture and Rural-Development

ESTAGRICO Societe Agricole et Cotoniere de lEst

FED Ponds Europeens de Developpement

GOZ Government of Zaire

INERA Institut National pour lEtude et la Recherche Agronomiques

ONATRA Office National des Transports

OPEZ Office des Petites etMoyennes Entreprises

OR Office des Routes

OZAC Office Zairois de Controle

PLZ Plantation Lever au Zaire

PUM Programme National Maize

PNR Programme National Riz

PNS Projet Nord Shaba

PRONAM Programme National Manioc

SNCZ Societe National Des Chemins de Fer du Zaire

SOFIDE Societe Financiere pour le Developpement

TISSAKIN Filatures et Tissages de Fibres a Kinshasa

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PREFACE

This study is not a nationwide agricultural marketingassessment The USAID Small Farmer Marketing Access Projectteam travelled to four different regions of Zaire in the course of the study but the team was unable to visit manyimportant agricultural production areas Moreover the team spent too little time in each of the four regions to conductanything other than reconnaisance surveys Yet the problemsand constraints in the marketing of food crops and inputsinto food crop production were found to be similar acrossregions of Zaire Differences do exist of cburse owiag todissimilarities in geography climate demographiccharacteristics the resource base infrastructural development and the mix of food and industrial cropsHowever a number of common themes emerged whichcharacterize agricultural marketing constraints in the fourregions visited and probably other regions of Zaire as well

The report begins with an executive summary thatdiscusses these common constraints and opportunities acrossregions and summarizes the policy implications of our findings The summary is followed by six annexes whichinclude the transport consultants report and more detaileddiscussions of agricultural production and marketing in thefour regions visited None of these individual reports isexhaustive in its coverage of transportation andagricultural marketing constraints and opportunities

As is is common to all short term work the risk ofdrawing incorrect inferences and making misstatements ishigh The team is solely responsible for any errors andomissions that do eyist in the report Interested readers are recommended to consult other studies carried out by theWorld Bank FAO the FED the Canadian Cooreration andvarious agencies of the Government of Zaie (GOZ) forfurther information Additional references are found in the bibliography

The field work for this study was conducted duringseven weeks in March and April 1983 The teams itineraryis outlined below

March 5-9 Briefing Preliminary Interviews and Literature Review in Kinshasa

March 5-10 Field Work in Kongolo North Shaba

March 15-17 Field Work in Bukavu South Kivu

March 17-21 Field Work in North Kivu

Maa-ch 22-25 Field Work in Bumba Zone Equateur

March 26-April 4

Write-up and Discussion of Teams Preliminary Findings in Kinshasa

April i-12 Field Work in Kwilu Subregion Bandundu

April 13-16 Write-up and Discussion of Kwilu Trip_Report in Kinshasa

April 18-23 Followup Interviews and Researcae Kinshasa

The SMFA team was comprised of

Dr Duncan Miller USAIDSampTMD SFMA Project ManagerEconomist

2 Dr John Eoltzman SFMA Core Staff Member AgriculturalEconomist

3 Grace Finne Independent Consultant Transport Economist

Dr Miller is responsible for much of the institutional analysis particularly for the identification ofinstitutional and policy constraints to increasinqproduction and improving marketing Dr Holtzman analyzedagricultural commodity production marketing flows andpricing Ms Finne assessed the transport system in each ofthe four regions and identified transport constraints and opportunities

lndividuals n the USAID Mission in Kinshasa whoparticipated in the field work were David Leong (Design andEvaluation Office) Tshishiku Kabundi (Agricultural andRural Development Office) and Henriette Emond (ProgramOffice) Ms Emond also drafted the section of the Kwilutrip report on IdJofa zone Cit Ngumbu of the BureaudEtudes Department de lAgriculture accompanied the team to Bumbaand provided valuable insights

The team wishes to acknowledge the cooperation andassistance of many individuals and organi-ations in carryingout the study The USAID Mission is thanked for providinguseful information direction and logistical supportGovernment o2 Zaire officials officials in donor agenciesand development projects contractors to USAID traders processors and farmers are all ackzowledged for theirpatience and candor in responding to the teams endless questions

Economic Constraints

Zaire is a vast country of great geographic climaticand agricultural diversity Yet constraints to agriculturalproduction and marketing are strikingly similar acrossdiverse regions These similarities reflect in large partmacroeconomic difficulties common to all of Zaire Themacroeconomic climate is characterized by

1 Foreign exchange scarcities rnd hence critical shortages of imported capital goods vehicles spare parts and fuel

2 Burdensomi foreign debt and large government deficits

3 Deteriorating transportation and marketing infrastructure

4 Scarcity of trained manpower which leads to poormanagement of scarce resources particularlyin the public sector

5 Financial irresponsibility and widespreaddiversion of development funds and resources

6 Declining terms of trade for food crops vis-a-vis consumer goods and high levels of food imports(made artificially cheap by the overvalued exchange rate) which provide gravedisincentives to food crop production

Macroeconomic conditions in Zaire have deterioratedprogressively since the decline in international commodityprices in the mid 1970s particularly for copper and cobaltThe abortive program of zairianization implemented in1973-74 transferred control from foreign owned and managedfirms to poorly trained Zatrois who in many instancesneglected mismanaged and undermined the financial viabilityof those enterprises Although ownership was later restored to qualified expatriate managers a further blow was struckby the demonetization of 1979-80 which crippled many smalland medium size enterprises As the state of the macroeconomy has declined so has private sector confidencein the government of Zaire and the countrys economicfuture The recent and precipitious erosion in the value ofthe Zaire on the parallel market has further contributed toprivate sectir pessimism and greatly complicated anyprospects for stabilization and later growth

The macroeconomic environment is bleak and recoverywill be a long and arduous process requiring debtrescheduling massive resouzce transfers from multilateral and bilateral donors greatly improved macroeconomic planning and management better design and implementation ofongoing and future projects and far greater financialdiscipline While the public sector has performed less thanoptimally during the past decade poorly managing funds and resources and exacerbating scarcities the private sectorhas performed surprisingly well under some of the worstbusiness conditions in the world Private firms have continued to provide agricultural inputs market

agricultural commodities supply connumer goods and in someinstances maintain the collapsing transportation ardmarketing intrastructure in the face of acute shortages andoften bothersome government intervention In servicing therural areas private firms have sometimes establishedmonopolies or monopsonies Faiaers and sall traders arcusethe larger firms of unfair practices Yet the pri-atesector has supplied urban areas with foodstuffs andparticipated in the market of cash crops that earn foreignexchange with greater efficien-y and at lower cost than the public sector is capable of doing

Constraints tr Increasing Agricultural Production and Marketin-

The Small Farmer Mar eting Access team found commonthemes in conducting rapid assessments of agriculturalproduction and marketing constraints The principalconstraints to production are presented in Table 1 andconstraints to marketing in Table 2 The most constrainingfactors to increasing food crop production were found to be

Inadequate supply and distribution of seedand the absence of commercial seed productionand distribution

2 Scarcity of agricultural implements in some areas

3 No use of modern agricultr=tl inputs such as fertilizers insecticides herbicides animal traction or mechanical inputs (tractorstillers pumps etc)

4 An underfunded and poorly trained extension service generally lacking any improvedpackages to extend to farmers As enforcers of minimum acreage requirements extension agents typically have bad rapport with rroshyducers

5 Land degradation through uncontrolled soil erosion slash and burn agriculture and abandonment of crop rotation in some areas

6 Labor shortages in areas near large cities or where returns to alternative enterprises(gold and diamond prospecting smugglingof coffee and consumer goods) are signifishycantly higher than returns to farming

7 Irregular evacuation of food crops from certain production zones particularly in more isolated areas Spoilage is high and produce is not marketed during some yearsUncertain market access is a disincentive to

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ment and an emphasis on regulating rather than facilitating agricultural production and marketing under-mines confidence in government instittions at the local level The government is viewed increasingly as an adversary

The Need for Interventions that Support Private Sector and Local Initiatives

While it is not difficult to identify constraints to agricultural production and marketing in Zaire the designand implementation of interventions to alleviate these constraints is exceedingly difficult in the presentmacroeconomic and policy environment Rather than prescribespecific interventions the SPMA team will offer some general counsel and words of caution

In each of the four regions it visited the SFMA team was impressed with the dynamism of the rural population and the capacity of private firms to move and transform goodsunder difficult sets of circumstances In contrast public sector agencies including the agricultural extension service the Office des Routes ONATRA and SNCZ local offiLes of Economic Affairs and parastatal marketing agencies performed rather poorly To be fair it is important to note that public agencies receive less than adequate support from the central government in the form of funds material training supervision and incentives Yet given the existing perverse Set of incentives facing GOZ officials which encourage financial mismanagerant and poor job performance it is impossible to expect majorimprovements in public sector accountability and performance in the medium run USAID is therefore encouraged to work closely with local institutions (cooperatives missionary groups ANEZA chapters PVOs and the private sector in tackling agricultural production and marketing4problems Marketing interventions lend themselves well to privatefirms in Zaire which move food crops from farmgate to market process agricultural products and distribute agricultural inputs and consumer goods Moreover privatefirms maintain a good proportion of the rural roads in Zaire through contracts with the Office des Routes access to the Fonds de Relance Econmmique and self-financingBy ensuring adequate road maintenance private marketing agents reduce marketing costs increase capital turnover and volume of produce buying and establish good rapport with the rural population served by these roads

In promoting the devlopement of agricultural marketing in a particular region USAID should make its assistance conditional upon greater indirect and direct resource transfers to private firms and local organizations Devising new arrangements and institutions for channeling aid will require imagination care and skill in

negotiating Privato firms should not be allowed to generate and determiri the use of funds without supervision as in the case of the -onds de Realance Economique Careful monixoring of resource flows and training in financial management will be necessary in order to hold aid recipientsaccountable And it is in the areas of training managementand financial analysis that USAID enjoyTs a comparative advantage

In many regions of Zaire rehabilitation of existingroads and improvement of feeder road networks wil lead to increases in marketed output These increases will result irom greater incentives to produce Greater availability of agricultural inputs and consumer goods increased competition among buyers and higher agricultural prices(resulting from transporters cost savings and greatercompetition) will provide adequate incentives In a periodof declining agriculture commodity terms of trade howeverthe effect of increased commercial activity on rural households nutrition will need to be monitored carefullyWhile road rehabilitation and construction are not panaceasimproved access will facilitate increased agriculturalproduction and marketing in many areas of Zaire which are presently seviced irregularly or not at all by privatemarketing agents

In order to enable small and medium size private firms to benefit fully from improved access USAID will need to provide medium term investment and short term agriculturalbuying credit The existing financial institutions particularly the BCZ and SOFIDE funnel most of their credit to large well-financed firms Although these larger firms could use mure funds (and they do provide useful marketingservices) access to credit does not constrain their activites to the extent that it does smaller firms HenceUSAID should seek to complement those financial institutions that assist larger firms By designing institutions that improve small traders access to vehicles spare partsfuel storage facilities and funds for agricului-iral buyingUSAID will help to increase competitiotA for prodice This will help to discipline larger firms who collect monopoly rents in rural areas where they are thc auie buyers and sellers At the same time that smaller firms obtain better access to formal credit USAID will need to train these firms in financial management as well as to monitor closelythe loan disbursemene and repayment process Such interventions are necessarily USAID-resource intensive and entail higher management costs but the investment in human capital development in he private sector has a highpotential payoff PVOs such as the Peace Corps and AFRICARE could be contracted to provide the necessary technical and managerial resources Missionary organizations could also help

USAID can most effectively intervene in agriculturalmarketing in Zaire by concentrating its scarce resources in one or two regions prettzably where USAID projects are already underway Interventions that seek to improve rural and feeder roads provide short and medium term credit and management training to smaller marketing agents monitor rural household nutrition and improve distribution netvwors for seed agricultural implements and consumer good hAv6- obvious complementarities that will reinforce the agricultural development process While the primaryobjective of UShID interventions should be to improve the liveinood of rural producers in Zaire an important albeit secondary objective may be to improve the food supplysituation in large urban areas The proximity of regionFsuch as Eandundu and Bas Zaire to Kinshasa and of North Shaba to Lumbumbashi and other cities in the copper belt is advantageous in that it permits satisfaction of the above two objectives

Structure of the Report

Each of the separate regional marketing reports and the transport consultants report appear as individual annexes The transport annex (no 1) describes the transportation systems in three of the four regions visited (excluding Kwilu Subregion) identifies transportconstraints and prescribes interventions in the transportsector that merit USAID examination Annex 2 analyzes maize production and marketing in North Shaba and discusses constraints to increasing production and improving marketingthat still exist after five years of USAID intervention in the North Shaba Development Project Annex 3 examines agricultural marketing in the area around Bukavu (SouthKivu) and in North Kivu Special attention is devoted to marketing of high value produce such as vegetables and beef to urban markets in other regions of Zaire (principally Kinshasa) Annex 4 analyzes rice productionand marketing in the Bumba zone identifies constraints and prescribes means for alleviating these constraints Annex 5 examines marketing of a broad range of staple crops from Kwilu Subregion (Bandundu) and discusses issues of institutional coordination and jurisdiction in a regionwhere a number of projects are currently underway The last annex (no 6) describes agricultura marketing in the Kinshasa food shed and discusses the applied research programs on marketing conducted by several organizations

ANNEX 1

STUDY OP SM4ALL FARMER MARIETIHG ACCESS RWISPORT SSTES AND CotSTRANTS

Trip Report March 10-March 25 1983 KOtGOLO-AIORT SHSA (March 10-iS)

BUKAVU-SOUTH VU (March 15-17) GONA - NORTH KIVU (March 17-21) BUMB - EQUT=UR March 21-25)

By Grace W Finna Consultant

Objectives

Th objectives of the transport reconnaissance of selective uarketing centers ware - To obtain an overview of existing tranuport systs for marketing of agricultural c-odities

- To identify transport constraints in marketing of agricultural Commoditics

- To indicate transport impro-7ment prmjects within the overall framework of AID programs for Zaire

- To make a preliminary ranking of alternate transport projects according to perceived benefits for marketing of agricultural products

Eonglo - 2ynzv area

1 Overview of existing system for marketing of agricultural commodities

1211 Tranport of Corn

Corn is the most important agricultural co~modiLy marketed fro the Kongolo-gyun-u area to major consumption ceaters These centers are mainly located in th-i South Rhaba industrial belt including Lubumbashi Likasi and Kolwvai The marketing season starto in April which also marks the beginning of the dry seaon Marketing o corn ends in September The rainy season usually starts in November The fact that corn is marketed in the dry season has the following transport implications

- Agricultural feeder roads are passable even with a minimum of maintenance effort

- Trucks registered outside the corn production area many reach the area by national rods in spite of the generally poor condition of these roads

ANNE 3 Agicultural Producticn and Marketing in South 35

and Norh Kivu

S Sumauzy and Policy Coclusion 35

II Food Crop d and Miwdeti in Kivu 36

A PxA Crapzovitio in South and North 36 Kivu Subregions

B Marketing of Agricul1t~al Prodzxm from 3 North Kivu

I=- mtraints to EqzxUi Aicul l 42 Pzouct~iand MaRketing in Kivu Region

IV Livesk Production and Mlarketilig in 4 North Ki-ju

A Cattle Production 44B RwmU Stock 45 C Cttle Marketing ad Flos in North Kivu 46 D znst aints- to Eqwampi Lvestock P dcz 5o

and Dcrts

7 Fish Production an arketing in ivu 52

ANNEX 4 Rice Procttion and Mawting in Bumna 55

1 Summary and Poli-y Cnclusios 55

A IMtoA-ton 55 B C t t to 56 C Contraints to Market Access and 56

Marketing DO Potetics 57

nI e Prcducticn arA Marketing 57

A Idce Production 57B Rice Maktn and Processing 60

3f11 Principal Cdstrant to Expading Riae 64 Produiction and Marketing in Bumba

A Production Constraints 64

BI onstraints to Iroving Rice Marketing 65

17 Production ard Marketing of Other Foodcreps 67

ARM 5 grioultta Markpting in zIWu Suregion 70

(Bntxxu)

I Sumiry and Policy rClusi s 70

II Field Trip to Kiwit 74

A Estimated Shipments of Manioc ffi Baz3u 74 to Kshasa

B Retzil Price Trends -for he Town of Kikwt 75 C Ma= (Qqwcrgi de eve -nta l 78

Liteqe diu nwaero-R41u) D Puvate Firms Interviewed in Kikwit 82

iF rield Tp to Idiofa 89

A Acgicultural Mketng in the Idofa ZCe 89B Principal Bayers of pici-tamlr Prch= 90 C grculltu Pz~dction arx Prices 92

IV Field Trip to Bulmigu 95

A Ro~ad Matenance in the Blumgu Zone 95 B Fernandes c amp CI 96 C Visit to the Kin5ono Market fkwzx coU= vly 98

Masi - Mmmb a Z o n )D ANEZA d the Role of Sa2 to Medium Scale

Mrcbants in ~giz~rlMareting

AMEX 6 Agriculba- Marketing ad Applie Research ActivitLes 102 in Kinshasa

I n eesdc Feames C nnants (AFBOZ) 102

1r Agriculb=al Marketing Siie and Interventicis 102 of the Condition Feminine et Soaio-Clturale of the nivsicn Er aique Cndition Femini

III Visit to Kinshsa Mar eace 103

IV Applied fesearch Activities of the Bureau dAnalyse 104 Bcxxordque Service dEtudxes Dpatent delgriculture et du Develocpe-en Fal

V Retail and Wholesale Price Data for od 104 Crops Marketed in Kinshasa

VI Prposed Survey of Foxd Shipments to Kinshaa 105

VII River Transport of Agmcultural C ties 106 to Kinshasa

VIIPo tix and Ed-sribio of Sac in Zalr 103

Indviduals Cm During the Study 3n0

BibW Jogah 114

LIST CF ABLM

ETIEM SM44f

Table 1 Smary of Major Costrints to P iiv in Selected Areas of Zaire

Table 2 Szmmazy of Major Comtraints to Market xvi Aeas and Marketir in Selected Areas of Zaire

AiNEX 2

T0-i e S-i Maize Prdution and Marketing the North 22 Shaba Project Area 197S-79 through 1981-82

Table S-2 Mai2a Pxdction and HMa tI in the 23 Korjoio and Nyim= Subregirmns 1978-79 thmtgh 1981-82

Table S-3 Maize Prices in tte North Shaba Project Area 27 1979-1982

Tahle S-4 Marketed antities of Fcdcrqps Other than 30 Maize in th North Shaba Project Area by S 1978-79 tough 1981-82

IN= 3

Table K-1 Retail Food Prices Jarary 1982-Fre zzy 1983 38

Table K-2 Production and Cmmrerialization of Primi1 40 Food Crops in North Kivu 1979-1981

Table K-3 Mnthy Air Shiprents of Goods and Passengers from 41 Gcia to Kinshs by Katale Aero frarsport 1982

Table K-4 Cattle Inport and Export Balar Sheet for North 48 KiLvu 1982

Table K-5 Anmmal Air Shipemts of Beef from Ga Airport by 51 Destination 1979-1982

Table K-6 Monthly Fish Prodution by PEVI (Cooperative des 54 Pe s de Vitshumbi)

AN=~ 4

Tuble B-1 aOY Prod=ticn in the uba Ze197980 58 thro2g 198182

Table B-2 Market Saes of Principal Firms in Purdcasing 61Pv3y in the amiba Zrxne 1981-82

Table B-3 Yanthly Shipn of Rice by Private fanmpte= 63 from Bmba Januarl- Decerber 1982

Table B-4 Prices for Seleted Ccnsmier Goods in Itimbri 66Collectivity (umba Zone) Early 1982 and March 1983

Table B-S Estiated Prod of Princip Food Crops 68 in the Dwba Zone 1979-80 tbxoh 1981-82

Table B-6 Quantitl -a of Ag lltumral Ommdities frarsore 69 by =M frm Bmba to All Pcrts on the Zaim Rivers 1981 and 1982

ANMXE 5

Table 9-1 Retail Price Indices for Urban oushls in lWitt 76 Febuay c 1982

Table W-2 Retail Prices of Selecte4Arogua umdte 77and Cosumer Gods at Markets in the Towm of KikYit Febrtry-Dampwnbar 1982

Table M+-3 List of Shareholers IK 79 Table W-4 Su xazy CoA s prpos Rsed Bridge and 81

Ferry yiree pro w

Table W-5 Evlution of Prices for Principal Agricultural as Ccznofdties in the Ad-l Subregion 1980-1983

Table W-6 Mx lthly Shipments of Manioc to Kinshsa by Ste 8 ~langelu First O~rter 1983

Table M-7 Aricultua o and ti mon 93 in Idiofa Zone 1980-81 mid 1981-82

-(Table - Far ate Prices for Selected Czomities 1982 and 94 1983

Table M-9 Agricaltural awnity Purd ases by Fernanes 97 Inasamp CE 1980-1982

ANNEX 6

Table XN-1 Ammal Sbipnents of Selected Comucdities by A 106 fxrn Points Along the Zaire Paver Beoe Kisanganiand R to Kinshasa 1981-1982

Tabl XM-2 Amml Shipmts of Selected e 107 by a fra Points Along the asai and-_iiu Rivers to Kinshaa 1980-982

List of Figures ar 3M

Map of P~xblic of Zaire MmasEartatio1 Nabcak ix

Figure K-1 E3Intl d Cattle FawsNrth Kivu 1981 ithin to and Fro 47

ABBREVIATIONS

AFECOZA Association des Femmes Commercantes du Zaire

AMIZA Agence Maritime International Zaire

ANEZA Association National des Entrepreneurs av Zaire

CAPACO Societe de Cafe Papaine et Commerce

CIDA Canadian Internaticnal Vnvelopment Authority

CODAIK Compagnie du Developpement Agro-Paitoral du Kwango-Kwilu

DOA Department of Agriculture and Rural-Development

ESTAGRICO Societe Agricole et Cotoniere de lEst

FED Ponds Europeens de Developpement

GOZ Government of Zaire

INERA Institut National pour lEtude et la Recherche Agronomiques

ONATRA Office National des Transports

OPEZ Office des Petites etMoyennes Entreprises

OR Office des Routes

OZAC Office Zairois de Controle

PLZ Plantation Lever au Zaire

PUM Programme National Maize

PNR Programme National Riz

PNS Projet Nord Shaba

PRONAM Programme National Manioc

SNCZ Societe National Des Chemins de Fer du Zaire

SOFIDE Societe Financiere pour le Developpement

TISSAKIN Filatures et Tissages de Fibres a Kinshasa

1o s deg

o - D v bull uatIl6 -fII

)j - I aCENIRIampURICAN rMSCf

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-bull

i i SU AN

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- AND=)-- so7K

-_

- b-aA TRANSPOIAJTANNZTWOR aA

4 a 8amp llA

NGdaS Sasama Coo

- - i A NGO- ZAMBIA

PREFACE

This study is not a nationwide agricultural marketingassessment The USAID Small Farmer Marketing Access Projectteam travelled to four different regions of Zaire in the course of the study but the team was unable to visit manyimportant agricultural production areas Moreover the team spent too little time in each of the four regions to conductanything other than reconnaisance surveys Yet the problemsand constraints in the marketing of food crops and inputsinto food crop production were found to be similar acrossregions of Zaire Differences do exist of cburse owiag todissimilarities in geography climate demographiccharacteristics the resource base infrastructural development and the mix of food and industrial cropsHowever a number of common themes emerged whichcharacterize agricultural marketing constraints in the fourregions visited and probably other regions of Zaire as well

The report begins with an executive summary thatdiscusses these common constraints and opportunities acrossregions and summarizes the policy implications of our findings The summary is followed by six annexes whichinclude the transport consultants report and more detaileddiscussions of agricultural production and marketing in thefour regions visited None of these individual reports isexhaustive in its coverage of transportation andagricultural marketing constraints and opportunities

As is is common to all short term work the risk ofdrawing incorrect inferences and making misstatements ishigh The team is solely responsible for any errors andomissions that do eyist in the report Interested readers are recommended to consult other studies carried out by theWorld Bank FAO the FED the Canadian Cooreration andvarious agencies of the Government of Zaie (GOZ) forfurther information Additional references are found in the bibliography

The field work for this study was conducted duringseven weeks in March and April 1983 The teams itineraryis outlined below

March 5-9 Briefing Preliminary Interviews and Literature Review in Kinshasa

March 5-10 Field Work in Kongolo North Shaba

March 15-17 Field Work in Bukavu South Kivu

March 17-21 Field Work in North Kivu

Maa-ch 22-25 Field Work in Bumba Zone Equateur

March 26-April 4

Write-up and Discussion of Teams Preliminary Findings in Kinshasa

April i-12 Field Work in Kwilu Subregion Bandundu

April 13-16 Write-up and Discussion of Kwilu Trip_Report in Kinshasa

April 18-23 Followup Interviews and Researcae Kinshasa

The SMFA team was comprised of

Dr Duncan Miller USAIDSampTMD SFMA Project ManagerEconomist

2 Dr John Eoltzman SFMA Core Staff Member AgriculturalEconomist

3 Grace Finne Independent Consultant Transport Economist

Dr Miller is responsible for much of the institutional analysis particularly for the identification ofinstitutional and policy constraints to increasinqproduction and improving marketing Dr Holtzman analyzedagricultural commodity production marketing flows andpricing Ms Finne assessed the transport system in each ofthe four regions and identified transport constraints and opportunities

lndividuals n the USAID Mission in Kinshasa whoparticipated in the field work were David Leong (Design andEvaluation Office) Tshishiku Kabundi (Agricultural andRural Development Office) and Henriette Emond (ProgramOffice) Ms Emond also drafted the section of the Kwilutrip report on IdJofa zone Cit Ngumbu of the BureaudEtudes Department de lAgriculture accompanied the team to Bumbaand provided valuable insights

The team wishes to acknowledge the cooperation andassistance of many individuals and organi-ations in carryingout the study The USAID Mission is thanked for providinguseful information direction and logistical supportGovernment o2 Zaire officials officials in donor agenciesand development projects contractors to USAID traders processors and farmers are all ackzowledged for theirpatience and candor in responding to the teams endless questions

Economic Constraints

Zaire is a vast country of great geographic climaticand agricultural diversity Yet constraints to agriculturalproduction and marketing are strikingly similar acrossdiverse regions These similarities reflect in large partmacroeconomic difficulties common to all of Zaire Themacroeconomic climate is characterized by

1 Foreign exchange scarcities rnd hence critical shortages of imported capital goods vehicles spare parts and fuel

2 Burdensomi foreign debt and large government deficits

3 Deteriorating transportation and marketing infrastructure

4 Scarcity of trained manpower which leads to poormanagement of scarce resources particularlyin the public sector

5 Financial irresponsibility and widespreaddiversion of development funds and resources

6 Declining terms of trade for food crops vis-a-vis consumer goods and high levels of food imports(made artificially cheap by the overvalued exchange rate) which provide gravedisincentives to food crop production

Macroeconomic conditions in Zaire have deterioratedprogressively since the decline in international commodityprices in the mid 1970s particularly for copper and cobaltThe abortive program of zairianization implemented in1973-74 transferred control from foreign owned and managedfirms to poorly trained Zatrois who in many instancesneglected mismanaged and undermined the financial viabilityof those enterprises Although ownership was later restored to qualified expatriate managers a further blow was struckby the demonetization of 1979-80 which crippled many smalland medium size enterprises As the state of the macroeconomy has declined so has private sector confidencein the government of Zaire and the countrys economicfuture The recent and precipitious erosion in the value ofthe Zaire on the parallel market has further contributed toprivate sectir pessimism and greatly complicated anyprospects for stabilization and later growth

The macroeconomic environment is bleak and recoverywill be a long and arduous process requiring debtrescheduling massive resouzce transfers from multilateral and bilateral donors greatly improved macroeconomic planning and management better design and implementation ofongoing and future projects and far greater financialdiscipline While the public sector has performed less thanoptimally during the past decade poorly managing funds and resources and exacerbating scarcities the private sectorhas performed surprisingly well under some of the worstbusiness conditions in the world Private firms have continued to provide agricultural inputs market

agricultural commodities supply connumer goods and in someinstances maintain the collapsing transportation ardmarketing intrastructure in the face of acute shortages andoften bothersome government intervention In servicing therural areas private firms have sometimes establishedmonopolies or monopsonies Faiaers and sall traders arcusethe larger firms of unfair practices Yet the pri-atesector has supplied urban areas with foodstuffs andparticipated in the market of cash crops that earn foreignexchange with greater efficien-y and at lower cost than the public sector is capable of doing

Constraints tr Increasing Agricultural Production and Marketin-

The Small Farmer Mar eting Access team found commonthemes in conducting rapid assessments of agriculturalproduction and marketing constraints The principalconstraints to production are presented in Table 1 andconstraints to marketing in Table 2 The most constrainingfactors to increasing food crop production were found to be

Inadequate supply and distribution of seedand the absence of commercial seed productionand distribution

2 Scarcity of agricultural implements in some areas

3 No use of modern agricultr=tl inputs such as fertilizers insecticides herbicides animal traction or mechanical inputs (tractorstillers pumps etc)

4 An underfunded and poorly trained extension service generally lacking any improvedpackages to extend to farmers As enforcers of minimum acreage requirements extension agents typically have bad rapport with rroshyducers

5 Land degradation through uncontrolled soil erosion slash and burn agriculture and abandonment of crop rotation in some areas

6 Labor shortages in areas near large cities or where returns to alternative enterprises(gold and diamond prospecting smugglingof coffee and consumer goods) are signifishycantly higher than returns to farming

7 Irregular evacuation of food crops from certain production zones particularly in more isolated areas Spoilage is high and produce is not marketed during some yearsUncertain market access is a disincentive to

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ment and an emphasis on regulating rather than facilitating agricultural production and marketing under-mines confidence in government instittions at the local level The government is viewed increasingly as an adversary

The Need for Interventions that Support Private Sector and Local Initiatives

While it is not difficult to identify constraints to agricultural production and marketing in Zaire the designand implementation of interventions to alleviate these constraints is exceedingly difficult in the presentmacroeconomic and policy environment Rather than prescribespecific interventions the SPMA team will offer some general counsel and words of caution

In each of the four regions it visited the SFMA team was impressed with the dynamism of the rural population and the capacity of private firms to move and transform goodsunder difficult sets of circumstances In contrast public sector agencies including the agricultural extension service the Office des Routes ONATRA and SNCZ local offiLes of Economic Affairs and parastatal marketing agencies performed rather poorly To be fair it is important to note that public agencies receive less than adequate support from the central government in the form of funds material training supervision and incentives Yet given the existing perverse Set of incentives facing GOZ officials which encourage financial mismanagerant and poor job performance it is impossible to expect majorimprovements in public sector accountability and performance in the medium run USAID is therefore encouraged to work closely with local institutions (cooperatives missionary groups ANEZA chapters PVOs and the private sector in tackling agricultural production and marketing4problems Marketing interventions lend themselves well to privatefirms in Zaire which move food crops from farmgate to market process agricultural products and distribute agricultural inputs and consumer goods Moreover privatefirms maintain a good proportion of the rural roads in Zaire through contracts with the Office des Routes access to the Fonds de Relance Econmmique and self-financingBy ensuring adequate road maintenance private marketing agents reduce marketing costs increase capital turnover and volume of produce buying and establish good rapport with the rural population served by these roads

In promoting the devlopement of agricultural marketing in a particular region USAID should make its assistance conditional upon greater indirect and direct resource transfers to private firms and local organizations Devising new arrangements and institutions for channeling aid will require imagination care and skill in

negotiating Privato firms should not be allowed to generate and determiri the use of funds without supervision as in the case of the -onds de Realance Economique Careful monixoring of resource flows and training in financial management will be necessary in order to hold aid recipientsaccountable And it is in the areas of training managementand financial analysis that USAID enjoyTs a comparative advantage

In many regions of Zaire rehabilitation of existingroads and improvement of feeder road networks wil lead to increases in marketed output These increases will result irom greater incentives to produce Greater availability of agricultural inputs and consumer goods increased competition among buyers and higher agricultural prices(resulting from transporters cost savings and greatercompetition) will provide adequate incentives In a periodof declining agriculture commodity terms of trade howeverthe effect of increased commercial activity on rural households nutrition will need to be monitored carefullyWhile road rehabilitation and construction are not panaceasimproved access will facilitate increased agriculturalproduction and marketing in many areas of Zaire which are presently seviced irregularly or not at all by privatemarketing agents

In order to enable small and medium size private firms to benefit fully from improved access USAID will need to provide medium term investment and short term agriculturalbuying credit The existing financial institutions particularly the BCZ and SOFIDE funnel most of their credit to large well-financed firms Although these larger firms could use mure funds (and they do provide useful marketingservices) access to credit does not constrain their activites to the extent that it does smaller firms HenceUSAID should seek to complement those financial institutions that assist larger firms By designing institutions that improve small traders access to vehicles spare partsfuel storage facilities and funds for agricului-iral buyingUSAID will help to increase competitiotA for prodice This will help to discipline larger firms who collect monopoly rents in rural areas where they are thc auie buyers and sellers At the same time that smaller firms obtain better access to formal credit USAID will need to train these firms in financial management as well as to monitor closelythe loan disbursemene and repayment process Such interventions are necessarily USAID-resource intensive and entail higher management costs but the investment in human capital development in he private sector has a highpotential payoff PVOs such as the Peace Corps and AFRICARE could be contracted to provide the necessary technical and managerial resources Missionary organizations could also help

USAID can most effectively intervene in agriculturalmarketing in Zaire by concentrating its scarce resources in one or two regions prettzably where USAID projects are already underway Interventions that seek to improve rural and feeder roads provide short and medium term credit and management training to smaller marketing agents monitor rural household nutrition and improve distribution netvwors for seed agricultural implements and consumer good hAv6- obvious complementarities that will reinforce the agricultural development process While the primaryobjective of UShID interventions should be to improve the liveinood of rural producers in Zaire an important albeit secondary objective may be to improve the food supplysituation in large urban areas The proximity of regionFsuch as Eandundu and Bas Zaire to Kinshasa and of North Shaba to Lumbumbashi and other cities in the copper belt is advantageous in that it permits satisfaction of the above two objectives

Structure of the Report

Each of the separate regional marketing reports and the transport consultants report appear as individual annexes The transport annex (no 1) describes the transportation systems in three of the four regions visited (excluding Kwilu Subregion) identifies transportconstraints and prescribes interventions in the transportsector that merit USAID examination Annex 2 analyzes maize production and marketing in North Shaba and discusses constraints to increasing production and improving marketingthat still exist after five years of USAID intervention in the North Shaba Development Project Annex 3 examines agricultural marketing in the area around Bukavu (SouthKivu) and in North Kivu Special attention is devoted to marketing of high value produce such as vegetables and beef to urban markets in other regions of Zaire (principally Kinshasa) Annex 4 analyzes rice productionand marketing in the Bumba zone identifies constraints and prescribes means for alleviating these constraints Annex 5 examines marketing of a broad range of staple crops from Kwilu Subregion (Bandundu) and discusses issues of institutional coordination and jurisdiction in a regionwhere a number of projects are currently underway The last annex (no 6) describes agricultura marketing in the Kinshasa food shed and discusses the applied research programs on marketing conducted by several organizations

ANNEX 1

STUDY OP SM4ALL FARMER MARIETIHG ACCESS RWISPORT SSTES AND CotSTRANTS

Trip Report March 10-March 25 1983 KOtGOLO-AIORT SHSA (March 10-iS)

BUKAVU-SOUTH VU (March 15-17) GONA - NORTH KIVU (March 17-21) BUMB - EQUT=UR March 21-25)

By Grace W Finna Consultant

Objectives

Th objectives of the transport reconnaissance of selective uarketing centers ware - To obtain an overview of existing tranuport systs for marketing of agricultural c-odities

- To identify transport constraints in marketing of agricultural Commoditics

- To indicate transport impro-7ment prmjects within the overall framework of AID programs for Zaire

- To make a preliminary ranking of alternate transport projects according to perceived benefits for marketing of agricultural products

Eonglo - 2ynzv area

1 Overview of existing system for marketing of agricultural commodities

1211 Tranport of Corn

Corn is the most important agricultural co~modiLy marketed fro the Kongolo-gyun-u area to major consumption ceaters These centers are mainly located in th-i South Rhaba industrial belt including Lubumbashi Likasi and Kolwvai The marketing season starto in April which also marks the beginning of the dry seaon Marketing o corn ends in September The rainy season usually starts in November The fact that corn is marketed in the dry season has the following transport implications

- Agricultural feeder roads are passable even with a minimum of maintenance effort

- Trucks registered outside the corn production area many reach the area by national rods in spite of the generally poor condition of these roads

ARM 5 grioultta Markpting in zIWu Suregion 70

(Bntxxu)

I Sumiry and Policy rClusi s 70

II Field Trip to Kiwit 74

A Estimated Shipments of Manioc ffi Baz3u 74 to Kshasa

B Retzil Price Trends -for he Town of Kikwt 75 C Ma= (Qqwcrgi de eve -nta l 78

Liteqe diu nwaero-R41u) D Puvate Firms Interviewed in Kikwit 82

iF rield Tp to Idiofa 89

A Acgicultural Mketng in the Idofa ZCe 89B Principal Bayers of pici-tamlr Prch= 90 C grculltu Pz~dction arx Prices 92

IV Field Trip to Bulmigu 95

A Ro~ad Matenance in the Blumgu Zone 95 B Fernandes c amp CI 96 C Visit to the Kin5ono Market fkwzx coU= vly 98

Masi - Mmmb a Z o n )D ANEZA d the Role of Sa2 to Medium Scale

Mrcbants in ~giz~rlMareting

AMEX 6 Agriculba- Marketing ad Applie Research ActivitLes 102 in Kinshasa

I n eesdc Feames C nnants (AFBOZ) 102

1r Agriculb=al Marketing Siie and Interventicis 102 of the Condition Feminine et Soaio-Clturale of the nivsicn Er aique Cndition Femini

III Visit to Kinshsa Mar eace 103

IV Applied fesearch Activities of the Bureau dAnalyse 104 Bcxxordque Service dEtudxes Dpatent delgriculture et du Develocpe-en Fal

V Retail and Wholesale Price Data for od 104 Crops Marketed in Kinshasa

VI Prposed Survey of Foxd Shipments to Kinshaa 105

VII River Transport of Agmcultural C ties 106 to Kinshasa

VIIPo tix and Ed-sribio of Sac in Zalr 103

Indviduals Cm During the Study 3n0

BibW Jogah 114

LIST CF ABLM

ETIEM SM44f

Table 1 Smary of Major Costrints to P iiv in Selected Areas of Zaire

Table 2 Szmmazy of Major Comtraints to Market xvi Aeas and Marketir in Selected Areas of Zaire

AiNEX 2

T0-i e S-i Maize Prdution and Marketing the North 22 Shaba Project Area 197S-79 through 1981-82

Table S-2 Mai2a Pxdction and HMa tI in the 23 Korjoio and Nyim= Subregirmns 1978-79 thmtgh 1981-82

Table S-3 Maize Prices in tte North Shaba Project Area 27 1979-1982

Tahle S-4 Marketed antities of Fcdcrqps Other than 30 Maize in th North Shaba Project Area by S 1978-79 tough 1981-82

IN= 3

Table K-1 Retail Food Prices Jarary 1982-Fre zzy 1983 38

Table K-2 Production and Cmmrerialization of Primi1 40 Food Crops in North Kivu 1979-1981

Table K-3 Mnthy Air Shiprents of Goods and Passengers from 41 Gcia to Kinshs by Katale Aero frarsport 1982

Table K-4 Cattle Inport and Export Balar Sheet for North 48 KiLvu 1982

Table K-5 Anmmal Air Shipemts of Beef from Ga Airport by 51 Destination 1979-1982

Table K-6 Monthly Fish Prodution by PEVI (Cooperative des 54 Pe s de Vitshumbi)

AN=~ 4

Tuble B-1 aOY Prod=ticn in the uba Ze197980 58 thro2g 198182

Table B-2 Market Saes of Principal Firms in Purdcasing 61Pv3y in the amiba Zrxne 1981-82

Table B-3 Yanthly Shipn of Rice by Private fanmpte= 63 from Bmba Januarl- Decerber 1982

Table B-4 Prices for Seleted Ccnsmier Goods in Itimbri 66Collectivity (umba Zone) Early 1982 and March 1983

Table B-S Estiated Prod of Princip Food Crops 68 in the Dwba Zone 1979-80 tbxoh 1981-82

Table B-6 Quantitl -a of Ag lltumral Ommdities frarsore 69 by =M frm Bmba to All Pcrts on the Zaim Rivers 1981 and 1982

ANMXE 5

Table 9-1 Retail Price Indices for Urban oushls in lWitt 76 Febuay c 1982

Table W-2 Retail Prices of Selecte4Arogua umdte 77and Cosumer Gods at Markets in the Towm of KikYit Febrtry-Dampwnbar 1982

Table M+-3 List of Shareholers IK 79 Table W-4 Su xazy CoA s prpos Rsed Bridge and 81

Ferry yiree pro w

Table W-5 Evlution of Prices for Principal Agricultural as Ccznofdties in the Ad-l Subregion 1980-1983

Table W-6 Mx lthly Shipments of Manioc to Kinshsa by Ste 8 ~langelu First O~rter 1983

Table M-7 Aricultua o and ti mon 93 in Idiofa Zone 1980-81 mid 1981-82

-(Table - Far ate Prices for Selected Czomities 1982 and 94 1983

Table M-9 Agricaltural awnity Purd ases by Fernanes 97 Inasamp CE 1980-1982

ANNEX 6

Table XN-1 Ammal Sbipnents of Selected Comucdities by A 106 fxrn Points Along the Zaire Paver Beoe Kisanganiand R to Kinshasa 1981-1982

Tabl XM-2 Amml Shipmts of Selected e 107 by a fra Points Along the asai and-_iiu Rivers to Kinshaa 1980-982

List of Figures ar 3M

Map of P~xblic of Zaire MmasEartatio1 Nabcak ix

Figure K-1 E3Intl d Cattle FawsNrth Kivu 1981 ithin to and Fro 47

ABBREVIATIONS

AFECOZA Association des Femmes Commercantes du Zaire

AMIZA Agence Maritime International Zaire

ANEZA Association National des Entrepreneurs av Zaire

CAPACO Societe de Cafe Papaine et Commerce

CIDA Canadian Internaticnal Vnvelopment Authority

CODAIK Compagnie du Developpement Agro-Paitoral du Kwango-Kwilu

DOA Department of Agriculture and Rural-Development

ESTAGRICO Societe Agricole et Cotoniere de lEst

FED Ponds Europeens de Developpement

GOZ Government of Zaire

INERA Institut National pour lEtude et la Recherche Agronomiques

ONATRA Office National des Transports

OPEZ Office des Petites etMoyennes Entreprises

OR Office des Routes

OZAC Office Zairois de Controle

PLZ Plantation Lever au Zaire

PUM Programme National Maize

PNR Programme National Riz

PNS Projet Nord Shaba

PRONAM Programme National Manioc

SNCZ Societe National Des Chemins de Fer du Zaire

SOFIDE Societe Financiere pour le Developpement

TISSAKIN Filatures et Tissages de Fibres a Kinshasa

1o s deg

o - D v bull uatIl6 -fII

)j - I aCENIRIampURICAN rMSCf

EU Cf lP----C-bull

-bull

i i SU AN

-Z t I SU

-I--- -shy ow

GABON i

- AND=)-- so7K

-_

- b-aA TRANSPOIAJTANNZTWOR aA

4 a 8amp llA

NGdaS Sasama Coo

- - i A NGO- ZAMBIA

PREFACE

This study is not a nationwide agricultural marketingassessment The USAID Small Farmer Marketing Access Projectteam travelled to four different regions of Zaire in the course of the study but the team was unable to visit manyimportant agricultural production areas Moreover the team spent too little time in each of the four regions to conductanything other than reconnaisance surveys Yet the problemsand constraints in the marketing of food crops and inputsinto food crop production were found to be similar acrossregions of Zaire Differences do exist of cburse owiag todissimilarities in geography climate demographiccharacteristics the resource base infrastructural development and the mix of food and industrial cropsHowever a number of common themes emerged whichcharacterize agricultural marketing constraints in the fourregions visited and probably other regions of Zaire as well

The report begins with an executive summary thatdiscusses these common constraints and opportunities acrossregions and summarizes the policy implications of our findings The summary is followed by six annexes whichinclude the transport consultants report and more detaileddiscussions of agricultural production and marketing in thefour regions visited None of these individual reports isexhaustive in its coverage of transportation andagricultural marketing constraints and opportunities

As is is common to all short term work the risk ofdrawing incorrect inferences and making misstatements ishigh The team is solely responsible for any errors andomissions that do eyist in the report Interested readers are recommended to consult other studies carried out by theWorld Bank FAO the FED the Canadian Cooreration andvarious agencies of the Government of Zaie (GOZ) forfurther information Additional references are found in the bibliography

The field work for this study was conducted duringseven weeks in March and April 1983 The teams itineraryis outlined below

March 5-9 Briefing Preliminary Interviews and Literature Review in Kinshasa

March 5-10 Field Work in Kongolo North Shaba

March 15-17 Field Work in Bukavu South Kivu

March 17-21 Field Work in North Kivu

Maa-ch 22-25 Field Work in Bumba Zone Equateur

March 26-April 4

Write-up and Discussion of Teams Preliminary Findings in Kinshasa

April i-12 Field Work in Kwilu Subregion Bandundu

April 13-16 Write-up and Discussion of Kwilu Trip_Report in Kinshasa

April 18-23 Followup Interviews and Researcae Kinshasa

The SMFA team was comprised of

Dr Duncan Miller USAIDSampTMD SFMA Project ManagerEconomist

2 Dr John Eoltzman SFMA Core Staff Member AgriculturalEconomist

3 Grace Finne Independent Consultant Transport Economist

Dr Miller is responsible for much of the institutional analysis particularly for the identification ofinstitutional and policy constraints to increasinqproduction and improving marketing Dr Holtzman analyzedagricultural commodity production marketing flows andpricing Ms Finne assessed the transport system in each ofthe four regions and identified transport constraints and opportunities

lndividuals n the USAID Mission in Kinshasa whoparticipated in the field work were David Leong (Design andEvaluation Office) Tshishiku Kabundi (Agricultural andRural Development Office) and Henriette Emond (ProgramOffice) Ms Emond also drafted the section of the Kwilutrip report on IdJofa zone Cit Ngumbu of the BureaudEtudes Department de lAgriculture accompanied the team to Bumbaand provided valuable insights

The team wishes to acknowledge the cooperation andassistance of many individuals and organi-ations in carryingout the study The USAID Mission is thanked for providinguseful information direction and logistical supportGovernment o2 Zaire officials officials in donor agenciesand development projects contractors to USAID traders processors and farmers are all ackzowledged for theirpatience and candor in responding to the teams endless questions

Economic Constraints

Zaire is a vast country of great geographic climaticand agricultural diversity Yet constraints to agriculturalproduction and marketing are strikingly similar acrossdiverse regions These similarities reflect in large partmacroeconomic difficulties common to all of Zaire Themacroeconomic climate is characterized by

1 Foreign exchange scarcities rnd hence critical shortages of imported capital goods vehicles spare parts and fuel

2 Burdensomi foreign debt and large government deficits

3 Deteriorating transportation and marketing infrastructure

4 Scarcity of trained manpower which leads to poormanagement of scarce resources particularlyin the public sector

5 Financial irresponsibility and widespreaddiversion of development funds and resources

6 Declining terms of trade for food crops vis-a-vis consumer goods and high levels of food imports(made artificially cheap by the overvalued exchange rate) which provide gravedisincentives to food crop production

Macroeconomic conditions in Zaire have deterioratedprogressively since the decline in international commodityprices in the mid 1970s particularly for copper and cobaltThe abortive program of zairianization implemented in1973-74 transferred control from foreign owned and managedfirms to poorly trained Zatrois who in many instancesneglected mismanaged and undermined the financial viabilityof those enterprises Although ownership was later restored to qualified expatriate managers a further blow was struckby the demonetization of 1979-80 which crippled many smalland medium size enterprises As the state of the macroeconomy has declined so has private sector confidencein the government of Zaire and the countrys economicfuture The recent and precipitious erosion in the value ofthe Zaire on the parallel market has further contributed toprivate sectir pessimism and greatly complicated anyprospects for stabilization and later growth

The macroeconomic environment is bleak and recoverywill be a long and arduous process requiring debtrescheduling massive resouzce transfers from multilateral and bilateral donors greatly improved macroeconomic planning and management better design and implementation ofongoing and future projects and far greater financialdiscipline While the public sector has performed less thanoptimally during the past decade poorly managing funds and resources and exacerbating scarcities the private sectorhas performed surprisingly well under some of the worstbusiness conditions in the world Private firms have continued to provide agricultural inputs market

agricultural commodities supply connumer goods and in someinstances maintain the collapsing transportation ardmarketing intrastructure in the face of acute shortages andoften bothersome government intervention In servicing therural areas private firms have sometimes establishedmonopolies or monopsonies Faiaers and sall traders arcusethe larger firms of unfair practices Yet the pri-atesector has supplied urban areas with foodstuffs andparticipated in the market of cash crops that earn foreignexchange with greater efficien-y and at lower cost than the public sector is capable of doing

Constraints tr Increasing Agricultural Production and Marketin-

The Small Farmer Mar eting Access team found commonthemes in conducting rapid assessments of agriculturalproduction and marketing constraints The principalconstraints to production are presented in Table 1 andconstraints to marketing in Table 2 The most constrainingfactors to increasing food crop production were found to be

Inadequate supply and distribution of seedand the absence of commercial seed productionand distribution

2 Scarcity of agricultural implements in some areas

3 No use of modern agricultr=tl inputs such as fertilizers insecticides herbicides animal traction or mechanical inputs (tractorstillers pumps etc)

4 An underfunded and poorly trained extension service generally lacking any improvedpackages to extend to farmers As enforcers of minimum acreage requirements extension agents typically have bad rapport with rroshyducers

5 Land degradation through uncontrolled soil erosion slash and burn agriculture and abandonment of crop rotation in some areas

6 Labor shortages in areas near large cities or where returns to alternative enterprises(gold and diamond prospecting smugglingof coffee and consumer goods) are signifishycantly higher than returns to farming

7 Irregular evacuation of food crops from certain production zones particularly in more isolated areas Spoilage is high and produce is not marketed during some yearsUncertain market access is a disincentive to

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ment and an emphasis on regulating rather than facilitating agricultural production and marketing under-mines confidence in government instittions at the local level The government is viewed increasingly as an adversary

The Need for Interventions that Support Private Sector and Local Initiatives

While it is not difficult to identify constraints to agricultural production and marketing in Zaire the designand implementation of interventions to alleviate these constraints is exceedingly difficult in the presentmacroeconomic and policy environment Rather than prescribespecific interventions the SPMA team will offer some general counsel and words of caution

In each of the four regions it visited the SFMA team was impressed with the dynamism of the rural population and the capacity of private firms to move and transform goodsunder difficult sets of circumstances In contrast public sector agencies including the agricultural extension service the Office des Routes ONATRA and SNCZ local offiLes of Economic Affairs and parastatal marketing agencies performed rather poorly To be fair it is important to note that public agencies receive less than adequate support from the central government in the form of funds material training supervision and incentives Yet given the existing perverse Set of incentives facing GOZ officials which encourage financial mismanagerant and poor job performance it is impossible to expect majorimprovements in public sector accountability and performance in the medium run USAID is therefore encouraged to work closely with local institutions (cooperatives missionary groups ANEZA chapters PVOs and the private sector in tackling agricultural production and marketing4problems Marketing interventions lend themselves well to privatefirms in Zaire which move food crops from farmgate to market process agricultural products and distribute agricultural inputs and consumer goods Moreover privatefirms maintain a good proportion of the rural roads in Zaire through contracts with the Office des Routes access to the Fonds de Relance Econmmique and self-financingBy ensuring adequate road maintenance private marketing agents reduce marketing costs increase capital turnover and volume of produce buying and establish good rapport with the rural population served by these roads

In promoting the devlopement of agricultural marketing in a particular region USAID should make its assistance conditional upon greater indirect and direct resource transfers to private firms and local organizations Devising new arrangements and institutions for channeling aid will require imagination care and skill in

negotiating Privato firms should not be allowed to generate and determiri the use of funds without supervision as in the case of the -onds de Realance Economique Careful monixoring of resource flows and training in financial management will be necessary in order to hold aid recipientsaccountable And it is in the areas of training managementand financial analysis that USAID enjoyTs a comparative advantage

In many regions of Zaire rehabilitation of existingroads and improvement of feeder road networks wil lead to increases in marketed output These increases will result irom greater incentives to produce Greater availability of agricultural inputs and consumer goods increased competition among buyers and higher agricultural prices(resulting from transporters cost savings and greatercompetition) will provide adequate incentives In a periodof declining agriculture commodity terms of trade howeverthe effect of increased commercial activity on rural households nutrition will need to be monitored carefullyWhile road rehabilitation and construction are not panaceasimproved access will facilitate increased agriculturalproduction and marketing in many areas of Zaire which are presently seviced irregularly or not at all by privatemarketing agents

In order to enable small and medium size private firms to benefit fully from improved access USAID will need to provide medium term investment and short term agriculturalbuying credit The existing financial institutions particularly the BCZ and SOFIDE funnel most of their credit to large well-financed firms Although these larger firms could use mure funds (and they do provide useful marketingservices) access to credit does not constrain their activites to the extent that it does smaller firms HenceUSAID should seek to complement those financial institutions that assist larger firms By designing institutions that improve small traders access to vehicles spare partsfuel storage facilities and funds for agricului-iral buyingUSAID will help to increase competitiotA for prodice This will help to discipline larger firms who collect monopoly rents in rural areas where they are thc auie buyers and sellers At the same time that smaller firms obtain better access to formal credit USAID will need to train these firms in financial management as well as to monitor closelythe loan disbursemene and repayment process Such interventions are necessarily USAID-resource intensive and entail higher management costs but the investment in human capital development in he private sector has a highpotential payoff PVOs such as the Peace Corps and AFRICARE could be contracted to provide the necessary technical and managerial resources Missionary organizations could also help

USAID can most effectively intervene in agriculturalmarketing in Zaire by concentrating its scarce resources in one or two regions prettzably where USAID projects are already underway Interventions that seek to improve rural and feeder roads provide short and medium term credit and management training to smaller marketing agents monitor rural household nutrition and improve distribution netvwors for seed agricultural implements and consumer good hAv6- obvious complementarities that will reinforce the agricultural development process While the primaryobjective of UShID interventions should be to improve the liveinood of rural producers in Zaire an important albeit secondary objective may be to improve the food supplysituation in large urban areas The proximity of regionFsuch as Eandundu and Bas Zaire to Kinshasa and of North Shaba to Lumbumbashi and other cities in the copper belt is advantageous in that it permits satisfaction of the above two objectives

Structure of the Report

Each of the separate regional marketing reports and the transport consultants report appear as individual annexes The transport annex (no 1) describes the transportation systems in three of the four regions visited (excluding Kwilu Subregion) identifies transportconstraints and prescribes interventions in the transportsector that merit USAID examination Annex 2 analyzes maize production and marketing in North Shaba and discusses constraints to increasing production and improving marketingthat still exist after five years of USAID intervention in the North Shaba Development Project Annex 3 examines agricultural marketing in the area around Bukavu (SouthKivu) and in North Kivu Special attention is devoted to marketing of high value produce such as vegetables and beef to urban markets in other regions of Zaire (principally Kinshasa) Annex 4 analyzes rice productionand marketing in the Bumba zone identifies constraints and prescribes means for alleviating these constraints Annex 5 examines marketing of a broad range of staple crops from Kwilu Subregion (Bandundu) and discusses issues of institutional coordination and jurisdiction in a regionwhere a number of projects are currently underway The last annex (no 6) describes agricultura marketing in the Kinshasa food shed and discusses the applied research programs on marketing conducted by several organizations

ANNEX 1

STUDY OP SM4ALL FARMER MARIETIHG ACCESS RWISPORT SSTES AND CotSTRANTS

Trip Report March 10-March 25 1983 KOtGOLO-AIORT SHSA (March 10-iS)

BUKAVU-SOUTH VU (March 15-17) GONA - NORTH KIVU (March 17-21) BUMB - EQUT=UR March 21-25)

By Grace W Finna Consultant

Objectives

Th objectives of the transport reconnaissance of selective uarketing centers ware - To obtain an overview of existing tranuport systs for marketing of agricultural c-odities

- To identify transport constraints in marketing of agricultural Commoditics

- To indicate transport impro-7ment prmjects within the overall framework of AID programs for Zaire

- To make a preliminary ranking of alternate transport projects according to perceived benefits for marketing of agricultural products

Eonglo - 2ynzv area

1 Overview of existing system for marketing of agricultural commodities

1211 Tranport of Corn

Corn is the most important agricultural co~modiLy marketed fro the Kongolo-gyun-u area to major consumption ceaters These centers are mainly located in th-i South Rhaba industrial belt including Lubumbashi Likasi and Kolwvai The marketing season starto in April which also marks the beginning of the dry seaon Marketing o corn ends in September The rainy season usually starts in November The fact that corn is marketed in the dry season has the following transport implications

- Agricultural feeder roads are passable even with a minimum of maintenance effort

- Trucks registered outside the corn production area many reach the area by national rods in spite of the generally poor condition of these roads

VIIPo tix and Ed-sribio of Sac in Zalr 103

Indviduals Cm During the Study 3n0

BibW Jogah 114

LIST CF ABLM

ETIEM SM44f

Table 1 Smary of Major Costrints to P iiv in Selected Areas of Zaire

Table 2 Szmmazy of Major Comtraints to Market xvi Aeas and Marketir in Selected Areas of Zaire

AiNEX 2

T0-i e S-i Maize Prdution and Marketing the North 22 Shaba Project Area 197S-79 through 1981-82

Table S-2 Mai2a Pxdction and HMa tI in the 23 Korjoio and Nyim= Subregirmns 1978-79 thmtgh 1981-82

Table S-3 Maize Prices in tte North Shaba Project Area 27 1979-1982

Tahle S-4 Marketed antities of Fcdcrqps Other than 30 Maize in th North Shaba Project Area by S 1978-79 tough 1981-82

IN= 3

Table K-1 Retail Food Prices Jarary 1982-Fre zzy 1983 38

Table K-2 Production and Cmmrerialization of Primi1 40 Food Crops in North Kivu 1979-1981

Table K-3 Mnthy Air Shiprents of Goods and Passengers from 41 Gcia to Kinshs by Katale Aero frarsport 1982

Table K-4 Cattle Inport and Export Balar Sheet for North 48 KiLvu 1982

Table K-5 Anmmal Air Shipemts of Beef from Ga Airport by 51 Destination 1979-1982

Table K-6 Monthly Fish Prodution by PEVI (Cooperative des 54 Pe s de Vitshumbi)

AN=~ 4

Tuble B-1 aOY Prod=ticn in the uba Ze197980 58 thro2g 198182

Table B-2 Market Saes of Principal Firms in Purdcasing 61Pv3y in the amiba Zrxne 1981-82

Table B-3 Yanthly Shipn of Rice by Private fanmpte= 63 from Bmba Januarl- Decerber 1982

Table B-4 Prices for Seleted Ccnsmier Goods in Itimbri 66Collectivity (umba Zone) Early 1982 and March 1983

Table B-S Estiated Prod of Princip Food Crops 68 in the Dwba Zone 1979-80 tbxoh 1981-82

Table B-6 Quantitl -a of Ag lltumral Ommdities frarsore 69 by =M frm Bmba to All Pcrts on the Zaim Rivers 1981 and 1982

ANMXE 5

Table 9-1 Retail Price Indices for Urban oushls in lWitt 76 Febuay c 1982

Table W-2 Retail Prices of Selecte4Arogua umdte 77and Cosumer Gods at Markets in the Towm of KikYit Febrtry-Dampwnbar 1982

Table M+-3 List of Shareholers IK 79 Table W-4 Su xazy CoA s prpos Rsed Bridge and 81

Ferry yiree pro w

Table W-5 Evlution of Prices for Principal Agricultural as Ccznofdties in the Ad-l Subregion 1980-1983

Table W-6 Mx lthly Shipments of Manioc to Kinshsa by Ste 8 ~langelu First O~rter 1983

Table M-7 Aricultua o and ti mon 93 in Idiofa Zone 1980-81 mid 1981-82

-(Table - Far ate Prices for Selected Czomities 1982 and 94 1983

Table M-9 Agricaltural awnity Purd ases by Fernanes 97 Inasamp CE 1980-1982

ANNEX 6

Table XN-1 Ammal Sbipnents of Selected Comucdities by A 106 fxrn Points Along the Zaire Paver Beoe Kisanganiand R to Kinshasa 1981-1982

Tabl XM-2 Amml Shipmts of Selected e 107 by a fra Points Along the asai and-_iiu Rivers to Kinshaa 1980-982

List of Figures ar 3M

Map of P~xblic of Zaire MmasEartatio1 Nabcak ix

Figure K-1 E3Intl d Cattle FawsNrth Kivu 1981 ithin to and Fro 47

ABBREVIATIONS

AFECOZA Association des Femmes Commercantes du Zaire

AMIZA Agence Maritime International Zaire

ANEZA Association National des Entrepreneurs av Zaire

CAPACO Societe de Cafe Papaine et Commerce

CIDA Canadian Internaticnal Vnvelopment Authority

CODAIK Compagnie du Developpement Agro-Paitoral du Kwango-Kwilu

DOA Department of Agriculture and Rural-Development

ESTAGRICO Societe Agricole et Cotoniere de lEst

FED Ponds Europeens de Developpement

GOZ Government of Zaire

INERA Institut National pour lEtude et la Recherche Agronomiques

ONATRA Office National des Transports

OPEZ Office des Petites etMoyennes Entreprises

OR Office des Routes

OZAC Office Zairois de Controle

PLZ Plantation Lever au Zaire

PUM Programme National Maize

PNR Programme National Riz

PNS Projet Nord Shaba

PRONAM Programme National Manioc

SNCZ Societe National Des Chemins de Fer du Zaire

SOFIDE Societe Financiere pour le Developpement

TISSAKIN Filatures et Tissages de Fibres a Kinshasa

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PREFACE

This study is not a nationwide agricultural marketingassessment The USAID Small Farmer Marketing Access Projectteam travelled to four different regions of Zaire in the course of the study but the team was unable to visit manyimportant agricultural production areas Moreover the team spent too little time in each of the four regions to conductanything other than reconnaisance surveys Yet the problemsand constraints in the marketing of food crops and inputsinto food crop production were found to be similar acrossregions of Zaire Differences do exist of cburse owiag todissimilarities in geography climate demographiccharacteristics the resource base infrastructural development and the mix of food and industrial cropsHowever a number of common themes emerged whichcharacterize agricultural marketing constraints in the fourregions visited and probably other regions of Zaire as well

The report begins with an executive summary thatdiscusses these common constraints and opportunities acrossregions and summarizes the policy implications of our findings The summary is followed by six annexes whichinclude the transport consultants report and more detaileddiscussions of agricultural production and marketing in thefour regions visited None of these individual reports isexhaustive in its coverage of transportation andagricultural marketing constraints and opportunities

As is is common to all short term work the risk ofdrawing incorrect inferences and making misstatements ishigh The team is solely responsible for any errors andomissions that do eyist in the report Interested readers are recommended to consult other studies carried out by theWorld Bank FAO the FED the Canadian Cooreration andvarious agencies of the Government of Zaie (GOZ) forfurther information Additional references are found in the bibliography

The field work for this study was conducted duringseven weeks in March and April 1983 The teams itineraryis outlined below

March 5-9 Briefing Preliminary Interviews and Literature Review in Kinshasa

March 5-10 Field Work in Kongolo North Shaba

March 15-17 Field Work in Bukavu South Kivu

March 17-21 Field Work in North Kivu

Maa-ch 22-25 Field Work in Bumba Zone Equateur

March 26-April 4

Write-up and Discussion of Teams Preliminary Findings in Kinshasa

April i-12 Field Work in Kwilu Subregion Bandundu

April 13-16 Write-up and Discussion of Kwilu Trip_Report in Kinshasa

April 18-23 Followup Interviews and Researcae Kinshasa

The SMFA team was comprised of

Dr Duncan Miller USAIDSampTMD SFMA Project ManagerEconomist

2 Dr John Eoltzman SFMA Core Staff Member AgriculturalEconomist

3 Grace Finne Independent Consultant Transport Economist

Dr Miller is responsible for much of the institutional analysis particularly for the identification ofinstitutional and policy constraints to increasinqproduction and improving marketing Dr Holtzman analyzedagricultural commodity production marketing flows andpricing Ms Finne assessed the transport system in each ofthe four regions and identified transport constraints and opportunities

lndividuals n the USAID Mission in Kinshasa whoparticipated in the field work were David Leong (Design andEvaluation Office) Tshishiku Kabundi (Agricultural andRural Development Office) and Henriette Emond (ProgramOffice) Ms Emond also drafted the section of the Kwilutrip report on IdJofa zone Cit Ngumbu of the BureaudEtudes Department de lAgriculture accompanied the team to Bumbaand provided valuable insights

The team wishes to acknowledge the cooperation andassistance of many individuals and organi-ations in carryingout the study The USAID Mission is thanked for providinguseful information direction and logistical supportGovernment o2 Zaire officials officials in donor agenciesand development projects contractors to USAID traders processors and farmers are all ackzowledged for theirpatience and candor in responding to the teams endless questions

Economic Constraints

Zaire is a vast country of great geographic climaticand agricultural diversity Yet constraints to agriculturalproduction and marketing are strikingly similar acrossdiverse regions These similarities reflect in large partmacroeconomic difficulties common to all of Zaire Themacroeconomic climate is characterized by

1 Foreign exchange scarcities rnd hence critical shortages of imported capital goods vehicles spare parts and fuel

2 Burdensomi foreign debt and large government deficits

3 Deteriorating transportation and marketing infrastructure

4 Scarcity of trained manpower which leads to poormanagement of scarce resources particularlyin the public sector

5 Financial irresponsibility and widespreaddiversion of development funds and resources

6 Declining terms of trade for food crops vis-a-vis consumer goods and high levels of food imports(made artificially cheap by the overvalued exchange rate) which provide gravedisincentives to food crop production

Macroeconomic conditions in Zaire have deterioratedprogressively since the decline in international commodityprices in the mid 1970s particularly for copper and cobaltThe abortive program of zairianization implemented in1973-74 transferred control from foreign owned and managedfirms to poorly trained Zatrois who in many instancesneglected mismanaged and undermined the financial viabilityof those enterprises Although ownership was later restored to qualified expatriate managers a further blow was struckby the demonetization of 1979-80 which crippled many smalland medium size enterprises As the state of the macroeconomy has declined so has private sector confidencein the government of Zaire and the countrys economicfuture The recent and precipitious erosion in the value ofthe Zaire on the parallel market has further contributed toprivate sectir pessimism and greatly complicated anyprospects for stabilization and later growth

The macroeconomic environment is bleak and recoverywill be a long and arduous process requiring debtrescheduling massive resouzce transfers from multilateral and bilateral donors greatly improved macroeconomic planning and management better design and implementation ofongoing and future projects and far greater financialdiscipline While the public sector has performed less thanoptimally during the past decade poorly managing funds and resources and exacerbating scarcities the private sectorhas performed surprisingly well under some of the worstbusiness conditions in the world Private firms have continued to provide agricultural inputs market

agricultural commodities supply connumer goods and in someinstances maintain the collapsing transportation ardmarketing intrastructure in the face of acute shortages andoften bothersome government intervention In servicing therural areas private firms have sometimes establishedmonopolies or monopsonies Faiaers and sall traders arcusethe larger firms of unfair practices Yet the pri-atesector has supplied urban areas with foodstuffs andparticipated in the market of cash crops that earn foreignexchange with greater efficien-y and at lower cost than the public sector is capable of doing

Constraints tr Increasing Agricultural Production and Marketin-

The Small Farmer Mar eting Access team found commonthemes in conducting rapid assessments of agriculturalproduction and marketing constraints The principalconstraints to production are presented in Table 1 andconstraints to marketing in Table 2 The most constrainingfactors to increasing food crop production were found to be

Inadequate supply and distribution of seedand the absence of commercial seed productionand distribution

2 Scarcity of agricultural implements in some areas

3 No use of modern agricultr=tl inputs such as fertilizers insecticides herbicides animal traction or mechanical inputs (tractorstillers pumps etc)

4 An underfunded and poorly trained extension service generally lacking any improvedpackages to extend to farmers As enforcers of minimum acreage requirements extension agents typically have bad rapport with rroshyducers

5 Land degradation through uncontrolled soil erosion slash and burn agriculture and abandonment of crop rotation in some areas

6 Labor shortages in areas near large cities or where returns to alternative enterprises(gold and diamond prospecting smugglingof coffee and consumer goods) are signifishycantly higher than returns to farming

7 Irregular evacuation of food crops from certain production zones particularly in more isolated areas Spoilage is high and produce is not marketed during some yearsUncertain market access is a disincentive to

OClutKUTKan OSLe

sectLeftw~~ ~~ batN N~ WxkofUPoetr 1LI I weln privte =Lc oatauslo NVMc eSttio has Lw rw gmsito eamflw at bf fpo toabt u pf mbt aciv In40u d mzbetfr WtUND sook eerbat autmm

ratzktia to 1agTWOCata Calb co aglw in to amghtplusmnx

91b

Itto 11IN ncrwdb aId t a ts u amubte

fmtmr~aIMMdatw aa oca dcliaew

mad l ftampMOM fWV bral-of bea~~

Go saif-safiawy ew pondly

xiaof led we ww~Uot In =9asibl~ ~ ~

Plnfbaaet to ut amjMAW9ht an ___dingods ~ vasIwtun We pefag mAt stiew ~ agil iml bt 13 miAma~ arm gand Iocad

t WOff-tows sapiqmmma qpctml-

adaambft h lswlU 3mauaPabatial t - DNAI

of dfibsh ni IobFbfh-~i q S a c-speg owplabus

U orEM asd atI IMO 901yts I rutalsra ~ gmarlinV agamma andtli SO

I cawming In 01zm fb sidud

WMa

INOUU ai $MC ZNC

WH

utx sak war- Pow

LWOPM WaQ2 i~f~ MAi

OM exstuf ad veedmyon ageW~i Lyrrb to 1asqua uugrw WampiampI

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sountakm es wLaIfr x to

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Upson ba bn sefot WI

ditfbatoI In Mrs V~adi Mel PV an su amid exs Wt RW shtwmjdht haudustic pts-

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60Il tbebigss Of LNbii ad ~cafla twmmamV481Wbi ane in-

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ment and an emphasis on regulating rather than facilitating agricultural production and marketing under-mines confidence in government instittions at the local level The government is viewed increasingly as an adversary

The Need for Interventions that Support Private Sector and Local Initiatives

While it is not difficult to identify constraints to agricultural production and marketing in Zaire the designand implementation of interventions to alleviate these constraints is exceedingly difficult in the presentmacroeconomic and policy environment Rather than prescribespecific interventions the SPMA team will offer some general counsel and words of caution

In each of the four regions it visited the SFMA team was impressed with the dynamism of the rural population and the capacity of private firms to move and transform goodsunder difficult sets of circumstances In contrast public sector agencies including the agricultural extension service the Office des Routes ONATRA and SNCZ local offiLes of Economic Affairs and parastatal marketing agencies performed rather poorly To be fair it is important to note that public agencies receive less than adequate support from the central government in the form of funds material training supervision and incentives Yet given the existing perverse Set of incentives facing GOZ officials which encourage financial mismanagerant and poor job performance it is impossible to expect majorimprovements in public sector accountability and performance in the medium run USAID is therefore encouraged to work closely with local institutions (cooperatives missionary groups ANEZA chapters PVOs and the private sector in tackling agricultural production and marketing4problems Marketing interventions lend themselves well to privatefirms in Zaire which move food crops from farmgate to market process agricultural products and distribute agricultural inputs and consumer goods Moreover privatefirms maintain a good proportion of the rural roads in Zaire through contracts with the Office des Routes access to the Fonds de Relance Econmmique and self-financingBy ensuring adequate road maintenance private marketing agents reduce marketing costs increase capital turnover and volume of produce buying and establish good rapport with the rural population served by these roads

In promoting the devlopement of agricultural marketing in a particular region USAID should make its assistance conditional upon greater indirect and direct resource transfers to private firms and local organizations Devising new arrangements and institutions for channeling aid will require imagination care and skill in

negotiating Privato firms should not be allowed to generate and determiri the use of funds without supervision as in the case of the -onds de Realance Economique Careful monixoring of resource flows and training in financial management will be necessary in order to hold aid recipientsaccountable And it is in the areas of training managementand financial analysis that USAID enjoyTs a comparative advantage

In many regions of Zaire rehabilitation of existingroads and improvement of feeder road networks wil lead to increases in marketed output These increases will result irom greater incentives to produce Greater availability of agricultural inputs and consumer goods increased competition among buyers and higher agricultural prices(resulting from transporters cost savings and greatercompetition) will provide adequate incentives In a periodof declining agriculture commodity terms of trade howeverthe effect of increased commercial activity on rural households nutrition will need to be monitored carefullyWhile road rehabilitation and construction are not panaceasimproved access will facilitate increased agriculturalproduction and marketing in many areas of Zaire which are presently seviced irregularly or not at all by privatemarketing agents

In order to enable small and medium size private firms to benefit fully from improved access USAID will need to provide medium term investment and short term agriculturalbuying credit The existing financial institutions particularly the BCZ and SOFIDE funnel most of their credit to large well-financed firms Although these larger firms could use mure funds (and they do provide useful marketingservices) access to credit does not constrain their activites to the extent that it does smaller firms HenceUSAID should seek to complement those financial institutions that assist larger firms By designing institutions that improve small traders access to vehicles spare partsfuel storage facilities and funds for agricului-iral buyingUSAID will help to increase competitiotA for prodice This will help to discipline larger firms who collect monopoly rents in rural areas where they are thc auie buyers and sellers At the same time that smaller firms obtain better access to formal credit USAID will need to train these firms in financial management as well as to monitor closelythe loan disbursemene and repayment process Such interventions are necessarily USAID-resource intensive and entail higher management costs but the investment in human capital development in he private sector has a highpotential payoff PVOs such as the Peace Corps and AFRICARE could be contracted to provide the necessary technical and managerial resources Missionary organizations could also help

USAID can most effectively intervene in agriculturalmarketing in Zaire by concentrating its scarce resources in one or two regions prettzably where USAID projects are already underway Interventions that seek to improve rural and feeder roads provide short and medium term credit and management training to smaller marketing agents monitor rural household nutrition and improve distribution netvwors for seed agricultural implements and consumer good hAv6- obvious complementarities that will reinforce the agricultural development process While the primaryobjective of UShID interventions should be to improve the liveinood of rural producers in Zaire an important albeit secondary objective may be to improve the food supplysituation in large urban areas The proximity of regionFsuch as Eandundu and Bas Zaire to Kinshasa and of North Shaba to Lumbumbashi and other cities in the copper belt is advantageous in that it permits satisfaction of the above two objectives

Structure of the Report

Each of the separate regional marketing reports and the transport consultants report appear as individual annexes The transport annex (no 1) describes the transportation systems in three of the four regions visited (excluding Kwilu Subregion) identifies transportconstraints and prescribes interventions in the transportsector that merit USAID examination Annex 2 analyzes maize production and marketing in North Shaba and discusses constraints to increasing production and improving marketingthat still exist after five years of USAID intervention in the North Shaba Development Project Annex 3 examines agricultural marketing in the area around Bukavu (SouthKivu) and in North Kivu Special attention is devoted to marketing of high value produce such as vegetables and beef to urban markets in other regions of Zaire (principally Kinshasa) Annex 4 analyzes rice productionand marketing in the Bumba zone identifies constraints and prescribes means for alleviating these constraints Annex 5 examines marketing of a broad range of staple crops from Kwilu Subregion (Bandundu) and discusses issues of institutional coordination and jurisdiction in a regionwhere a number of projects are currently underway The last annex (no 6) describes agricultura marketing in the Kinshasa food shed and discusses the applied research programs on marketing conducted by several organizations

ANNEX 1

STUDY OP SM4ALL FARMER MARIETIHG ACCESS RWISPORT SSTES AND CotSTRANTS

Trip Report March 10-March 25 1983 KOtGOLO-AIORT SHSA (March 10-iS)

BUKAVU-SOUTH VU (March 15-17) GONA - NORTH KIVU (March 17-21) BUMB - EQUT=UR March 21-25)

By Grace W Finna Consultant

Objectives

Th objectives of the transport reconnaissance of selective uarketing centers ware - To obtain an overview of existing tranuport systs for marketing of agricultural c-odities

- To identify transport constraints in marketing of agricultural Commoditics

- To indicate transport impro-7ment prmjects within the overall framework of AID programs for Zaire

- To make a preliminary ranking of alternate transport projects according to perceived benefits for marketing of agricultural products

Eonglo - 2ynzv area

1 Overview of existing system for marketing of agricultural commodities

1211 Tranport of Corn

Corn is the most important agricultural co~modiLy marketed fro the Kongolo-gyun-u area to major consumption ceaters These centers are mainly located in th-i South Rhaba industrial belt including Lubumbashi Likasi and Kolwvai The marketing season starto in April which also marks the beginning of the dry seaon Marketing o corn ends in September The rainy season usually starts in November The fact that corn is marketed in the dry season has the following transport implications

- Agricultural feeder roads are passable even with a minimum of maintenance effort

- Trucks registered outside the corn production area many reach the area by national rods in spite of the generally poor condition of these roads

LIST CF ABLM

ETIEM SM44f

Table 1 Smary of Major Costrints to P iiv in Selected Areas of Zaire

Table 2 Szmmazy of Major Comtraints to Market xvi Aeas and Marketir in Selected Areas of Zaire

AiNEX 2

T0-i e S-i Maize Prdution and Marketing the North 22 Shaba Project Area 197S-79 through 1981-82

Table S-2 Mai2a Pxdction and HMa tI in the 23 Korjoio and Nyim= Subregirmns 1978-79 thmtgh 1981-82

Table S-3 Maize Prices in tte North Shaba Project Area 27 1979-1982

Tahle S-4 Marketed antities of Fcdcrqps Other than 30 Maize in th North Shaba Project Area by S 1978-79 tough 1981-82

IN= 3

Table K-1 Retail Food Prices Jarary 1982-Fre zzy 1983 38

Table K-2 Production and Cmmrerialization of Primi1 40 Food Crops in North Kivu 1979-1981

Table K-3 Mnthy Air Shiprents of Goods and Passengers from 41 Gcia to Kinshs by Katale Aero frarsport 1982

Table K-4 Cattle Inport and Export Balar Sheet for North 48 KiLvu 1982

Table K-5 Anmmal Air Shipemts of Beef from Ga Airport by 51 Destination 1979-1982

Table K-6 Monthly Fish Prodution by PEVI (Cooperative des 54 Pe s de Vitshumbi)

AN=~ 4

Tuble B-1 aOY Prod=ticn in the uba Ze197980 58 thro2g 198182

Table B-2 Market Saes of Principal Firms in Purdcasing 61Pv3y in the amiba Zrxne 1981-82

Table B-3 Yanthly Shipn of Rice by Private fanmpte= 63 from Bmba Januarl- Decerber 1982

Table B-4 Prices for Seleted Ccnsmier Goods in Itimbri 66Collectivity (umba Zone) Early 1982 and March 1983

Table B-S Estiated Prod of Princip Food Crops 68 in the Dwba Zone 1979-80 tbxoh 1981-82

Table B-6 Quantitl -a of Ag lltumral Ommdities frarsore 69 by =M frm Bmba to All Pcrts on the Zaim Rivers 1981 and 1982

ANMXE 5

Table 9-1 Retail Price Indices for Urban oushls in lWitt 76 Febuay c 1982

Table W-2 Retail Prices of Selecte4Arogua umdte 77and Cosumer Gods at Markets in the Towm of KikYit Febrtry-Dampwnbar 1982

Table M+-3 List of Shareholers IK 79 Table W-4 Su xazy CoA s prpos Rsed Bridge and 81

Ferry yiree pro w

Table W-5 Evlution of Prices for Principal Agricultural as Ccznofdties in the Ad-l Subregion 1980-1983

Table W-6 Mx lthly Shipments of Manioc to Kinshsa by Ste 8 ~langelu First O~rter 1983

Table M-7 Aricultua o and ti mon 93 in Idiofa Zone 1980-81 mid 1981-82

-(Table - Far ate Prices for Selected Czomities 1982 and 94 1983

Table M-9 Agricaltural awnity Purd ases by Fernanes 97 Inasamp CE 1980-1982

ANNEX 6

Table XN-1 Ammal Sbipnents of Selected Comucdities by A 106 fxrn Points Along the Zaire Paver Beoe Kisanganiand R to Kinshasa 1981-1982

Tabl XM-2 Amml Shipmts of Selected e 107 by a fra Points Along the asai and-_iiu Rivers to Kinshaa 1980-982

List of Figures ar 3M

Map of P~xblic of Zaire MmasEartatio1 Nabcak ix

Figure K-1 E3Intl d Cattle FawsNrth Kivu 1981 ithin to and Fro 47

ABBREVIATIONS

AFECOZA Association des Femmes Commercantes du Zaire

AMIZA Agence Maritime International Zaire

ANEZA Association National des Entrepreneurs av Zaire

CAPACO Societe de Cafe Papaine et Commerce

CIDA Canadian Internaticnal Vnvelopment Authority

CODAIK Compagnie du Developpement Agro-Paitoral du Kwango-Kwilu

DOA Department of Agriculture and Rural-Development

ESTAGRICO Societe Agricole et Cotoniere de lEst

FED Ponds Europeens de Developpement

GOZ Government of Zaire

INERA Institut National pour lEtude et la Recherche Agronomiques

ONATRA Office National des Transports

OPEZ Office des Petites etMoyennes Entreprises

OR Office des Routes

OZAC Office Zairois de Controle

PLZ Plantation Lever au Zaire

PUM Programme National Maize

PNR Programme National Riz

PNS Projet Nord Shaba

PRONAM Programme National Manioc

SNCZ Societe National Des Chemins de Fer du Zaire

SOFIDE Societe Financiere pour le Developpement

TISSAKIN Filatures et Tissages de Fibres a Kinshasa

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PREFACE

This study is not a nationwide agricultural marketingassessment The USAID Small Farmer Marketing Access Projectteam travelled to four different regions of Zaire in the course of the study but the team was unable to visit manyimportant agricultural production areas Moreover the team spent too little time in each of the four regions to conductanything other than reconnaisance surveys Yet the problemsand constraints in the marketing of food crops and inputsinto food crop production were found to be similar acrossregions of Zaire Differences do exist of cburse owiag todissimilarities in geography climate demographiccharacteristics the resource base infrastructural development and the mix of food and industrial cropsHowever a number of common themes emerged whichcharacterize agricultural marketing constraints in the fourregions visited and probably other regions of Zaire as well

The report begins with an executive summary thatdiscusses these common constraints and opportunities acrossregions and summarizes the policy implications of our findings The summary is followed by six annexes whichinclude the transport consultants report and more detaileddiscussions of agricultural production and marketing in thefour regions visited None of these individual reports isexhaustive in its coverage of transportation andagricultural marketing constraints and opportunities

As is is common to all short term work the risk ofdrawing incorrect inferences and making misstatements ishigh The team is solely responsible for any errors andomissions that do eyist in the report Interested readers are recommended to consult other studies carried out by theWorld Bank FAO the FED the Canadian Cooreration andvarious agencies of the Government of Zaie (GOZ) forfurther information Additional references are found in the bibliography

The field work for this study was conducted duringseven weeks in March and April 1983 The teams itineraryis outlined below

March 5-9 Briefing Preliminary Interviews and Literature Review in Kinshasa

March 5-10 Field Work in Kongolo North Shaba

March 15-17 Field Work in Bukavu South Kivu

March 17-21 Field Work in North Kivu

Maa-ch 22-25 Field Work in Bumba Zone Equateur

March 26-April 4

Write-up and Discussion of Teams Preliminary Findings in Kinshasa

April i-12 Field Work in Kwilu Subregion Bandundu

April 13-16 Write-up and Discussion of Kwilu Trip_Report in Kinshasa

April 18-23 Followup Interviews and Researcae Kinshasa

The SMFA team was comprised of

Dr Duncan Miller USAIDSampTMD SFMA Project ManagerEconomist

2 Dr John Eoltzman SFMA Core Staff Member AgriculturalEconomist

3 Grace Finne Independent Consultant Transport Economist

Dr Miller is responsible for much of the institutional analysis particularly for the identification ofinstitutional and policy constraints to increasinqproduction and improving marketing Dr Holtzman analyzedagricultural commodity production marketing flows andpricing Ms Finne assessed the transport system in each ofthe four regions and identified transport constraints and opportunities

lndividuals n the USAID Mission in Kinshasa whoparticipated in the field work were David Leong (Design andEvaluation Office) Tshishiku Kabundi (Agricultural andRural Development Office) and Henriette Emond (ProgramOffice) Ms Emond also drafted the section of the Kwilutrip report on IdJofa zone Cit Ngumbu of the BureaudEtudes Department de lAgriculture accompanied the team to Bumbaand provided valuable insights

The team wishes to acknowledge the cooperation andassistance of many individuals and organi-ations in carryingout the study The USAID Mission is thanked for providinguseful information direction and logistical supportGovernment o2 Zaire officials officials in donor agenciesand development projects contractors to USAID traders processors and farmers are all ackzowledged for theirpatience and candor in responding to the teams endless questions

Economic Constraints

Zaire is a vast country of great geographic climaticand agricultural diversity Yet constraints to agriculturalproduction and marketing are strikingly similar acrossdiverse regions These similarities reflect in large partmacroeconomic difficulties common to all of Zaire Themacroeconomic climate is characterized by

1 Foreign exchange scarcities rnd hence critical shortages of imported capital goods vehicles spare parts and fuel

2 Burdensomi foreign debt and large government deficits

3 Deteriorating transportation and marketing infrastructure

4 Scarcity of trained manpower which leads to poormanagement of scarce resources particularlyin the public sector

5 Financial irresponsibility and widespreaddiversion of development funds and resources

6 Declining terms of trade for food crops vis-a-vis consumer goods and high levels of food imports(made artificially cheap by the overvalued exchange rate) which provide gravedisincentives to food crop production

Macroeconomic conditions in Zaire have deterioratedprogressively since the decline in international commodityprices in the mid 1970s particularly for copper and cobaltThe abortive program of zairianization implemented in1973-74 transferred control from foreign owned and managedfirms to poorly trained Zatrois who in many instancesneglected mismanaged and undermined the financial viabilityof those enterprises Although ownership was later restored to qualified expatriate managers a further blow was struckby the demonetization of 1979-80 which crippled many smalland medium size enterprises As the state of the macroeconomy has declined so has private sector confidencein the government of Zaire and the countrys economicfuture The recent and precipitious erosion in the value ofthe Zaire on the parallel market has further contributed toprivate sectir pessimism and greatly complicated anyprospects for stabilization and later growth

The macroeconomic environment is bleak and recoverywill be a long and arduous process requiring debtrescheduling massive resouzce transfers from multilateral and bilateral donors greatly improved macroeconomic planning and management better design and implementation ofongoing and future projects and far greater financialdiscipline While the public sector has performed less thanoptimally during the past decade poorly managing funds and resources and exacerbating scarcities the private sectorhas performed surprisingly well under some of the worstbusiness conditions in the world Private firms have continued to provide agricultural inputs market

agricultural commodities supply connumer goods and in someinstances maintain the collapsing transportation ardmarketing intrastructure in the face of acute shortages andoften bothersome government intervention In servicing therural areas private firms have sometimes establishedmonopolies or monopsonies Faiaers and sall traders arcusethe larger firms of unfair practices Yet the pri-atesector has supplied urban areas with foodstuffs andparticipated in the market of cash crops that earn foreignexchange with greater efficien-y and at lower cost than the public sector is capable of doing

Constraints tr Increasing Agricultural Production and Marketin-

The Small Farmer Mar eting Access team found commonthemes in conducting rapid assessments of agriculturalproduction and marketing constraints The principalconstraints to production are presented in Table 1 andconstraints to marketing in Table 2 The most constrainingfactors to increasing food crop production were found to be

Inadequate supply and distribution of seedand the absence of commercial seed productionand distribution

2 Scarcity of agricultural implements in some areas

3 No use of modern agricultr=tl inputs such as fertilizers insecticides herbicides animal traction or mechanical inputs (tractorstillers pumps etc)

4 An underfunded and poorly trained extension service generally lacking any improvedpackages to extend to farmers As enforcers of minimum acreage requirements extension agents typically have bad rapport with rroshyducers

5 Land degradation through uncontrolled soil erosion slash and burn agriculture and abandonment of crop rotation in some areas

6 Labor shortages in areas near large cities or where returns to alternative enterprises(gold and diamond prospecting smugglingof coffee and consumer goods) are signifishycantly higher than returns to farming

7 Irregular evacuation of food crops from certain production zones particularly in more isolated areas Spoilage is high and produce is not marketed during some yearsUncertain market access is a disincentive to

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ment and an emphasis on regulating rather than facilitating agricultural production and marketing under-mines confidence in government instittions at the local level The government is viewed increasingly as an adversary

The Need for Interventions that Support Private Sector and Local Initiatives

While it is not difficult to identify constraints to agricultural production and marketing in Zaire the designand implementation of interventions to alleviate these constraints is exceedingly difficult in the presentmacroeconomic and policy environment Rather than prescribespecific interventions the SPMA team will offer some general counsel and words of caution

In each of the four regions it visited the SFMA team was impressed with the dynamism of the rural population and the capacity of private firms to move and transform goodsunder difficult sets of circumstances In contrast public sector agencies including the agricultural extension service the Office des Routes ONATRA and SNCZ local offiLes of Economic Affairs and parastatal marketing agencies performed rather poorly To be fair it is important to note that public agencies receive less than adequate support from the central government in the form of funds material training supervision and incentives Yet given the existing perverse Set of incentives facing GOZ officials which encourage financial mismanagerant and poor job performance it is impossible to expect majorimprovements in public sector accountability and performance in the medium run USAID is therefore encouraged to work closely with local institutions (cooperatives missionary groups ANEZA chapters PVOs and the private sector in tackling agricultural production and marketing4problems Marketing interventions lend themselves well to privatefirms in Zaire which move food crops from farmgate to market process agricultural products and distribute agricultural inputs and consumer goods Moreover privatefirms maintain a good proportion of the rural roads in Zaire through contracts with the Office des Routes access to the Fonds de Relance Econmmique and self-financingBy ensuring adequate road maintenance private marketing agents reduce marketing costs increase capital turnover and volume of produce buying and establish good rapport with the rural population served by these roads

In promoting the devlopement of agricultural marketing in a particular region USAID should make its assistance conditional upon greater indirect and direct resource transfers to private firms and local organizations Devising new arrangements and institutions for channeling aid will require imagination care and skill in

negotiating Privato firms should not be allowed to generate and determiri the use of funds without supervision as in the case of the -onds de Realance Economique Careful monixoring of resource flows and training in financial management will be necessary in order to hold aid recipientsaccountable And it is in the areas of training managementand financial analysis that USAID enjoyTs a comparative advantage

In many regions of Zaire rehabilitation of existingroads and improvement of feeder road networks wil lead to increases in marketed output These increases will result irom greater incentives to produce Greater availability of agricultural inputs and consumer goods increased competition among buyers and higher agricultural prices(resulting from transporters cost savings and greatercompetition) will provide adequate incentives In a periodof declining agriculture commodity terms of trade howeverthe effect of increased commercial activity on rural households nutrition will need to be monitored carefullyWhile road rehabilitation and construction are not panaceasimproved access will facilitate increased agriculturalproduction and marketing in many areas of Zaire which are presently seviced irregularly or not at all by privatemarketing agents

In order to enable small and medium size private firms to benefit fully from improved access USAID will need to provide medium term investment and short term agriculturalbuying credit The existing financial institutions particularly the BCZ and SOFIDE funnel most of their credit to large well-financed firms Although these larger firms could use mure funds (and they do provide useful marketingservices) access to credit does not constrain their activites to the extent that it does smaller firms HenceUSAID should seek to complement those financial institutions that assist larger firms By designing institutions that improve small traders access to vehicles spare partsfuel storage facilities and funds for agricului-iral buyingUSAID will help to increase competitiotA for prodice This will help to discipline larger firms who collect monopoly rents in rural areas where they are thc auie buyers and sellers At the same time that smaller firms obtain better access to formal credit USAID will need to train these firms in financial management as well as to monitor closelythe loan disbursemene and repayment process Such interventions are necessarily USAID-resource intensive and entail higher management costs but the investment in human capital development in he private sector has a highpotential payoff PVOs such as the Peace Corps and AFRICARE could be contracted to provide the necessary technical and managerial resources Missionary organizations could also help

USAID can most effectively intervene in agriculturalmarketing in Zaire by concentrating its scarce resources in one or two regions prettzably where USAID projects are already underway Interventions that seek to improve rural and feeder roads provide short and medium term credit and management training to smaller marketing agents monitor rural household nutrition and improve distribution netvwors for seed agricultural implements and consumer good hAv6- obvious complementarities that will reinforce the agricultural development process While the primaryobjective of UShID interventions should be to improve the liveinood of rural producers in Zaire an important albeit secondary objective may be to improve the food supplysituation in large urban areas The proximity of regionFsuch as Eandundu and Bas Zaire to Kinshasa and of North Shaba to Lumbumbashi and other cities in the copper belt is advantageous in that it permits satisfaction of the above two objectives

Structure of the Report

Each of the separate regional marketing reports and the transport consultants report appear as individual annexes The transport annex (no 1) describes the transportation systems in three of the four regions visited (excluding Kwilu Subregion) identifies transportconstraints and prescribes interventions in the transportsector that merit USAID examination Annex 2 analyzes maize production and marketing in North Shaba and discusses constraints to increasing production and improving marketingthat still exist after five years of USAID intervention in the North Shaba Development Project Annex 3 examines agricultural marketing in the area around Bukavu (SouthKivu) and in North Kivu Special attention is devoted to marketing of high value produce such as vegetables and beef to urban markets in other regions of Zaire (principally Kinshasa) Annex 4 analyzes rice productionand marketing in the Bumba zone identifies constraints and prescribes means for alleviating these constraints Annex 5 examines marketing of a broad range of staple crops from Kwilu Subregion (Bandundu) and discusses issues of institutional coordination and jurisdiction in a regionwhere a number of projects are currently underway The last annex (no 6) describes agricultura marketing in the Kinshasa food shed and discusses the applied research programs on marketing conducted by several organizations

ANNEX 1

STUDY OP SM4ALL FARMER MARIETIHG ACCESS RWISPORT SSTES AND CotSTRANTS

Trip Report March 10-March 25 1983 KOtGOLO-AIORT SHSA (March 10-iS)

BUKAVU-SOUTH VU (March 15-17) GONA - NORTH KIVU (March 17-21) BUMB - EQUT=UR March 21-25)

By Grace W Finna Consultant

Objectives

Th objectives of the transport reconnaissance of selective uarketing centers ware - To obtain an overview of existing tranuport systs for marketing of agricultural c-odities

- To identify transport constraints in marketing of agricultural Commoditics

- To indicate transport impro-7ment prmjects within the overall framework of AID programs for Zaire

- To make a preliminary ranking of alternate transport projects according to perceived benefits for marketing of agricultural products

Eonglo - 2ynzv area

1 Overview of existing system for marketing of agricultural commodities

1211 Tranport of Corn

Corn is the most important agricultural co~modiLy marketed fro the Kongolo-gyun-u area to major consumption ceaters These centers are mainly located in th-i South Rhaba industrial belt including Lubumbashi Likasi and Kolwvai The marketing season starto in April which also marks the beginning of the dry seaon Marketing o corn ends in September The rainy season usually starts in November The fact that corn is marketed in the dry season has the following transport implications

- Agricultural feeder roads are passable even with a minimum of maintenance effort

- Trucks registered outside the corn production area many reach the area by national rods in spite of the generally poor condition of these roads

AN=~ 4

Tuble B-1 aOY Prod=ticn in the uba Ze197980 58 thro2g 198182

Table B-2 Market Saes of Principal Firms in Purdcasing 61Pv3y in the amiba Zrxne 1981-82

Table B-3 Yanthly Shipn of Rice by Private fanmpte= 63 from Bmba Januarl- Decerber 1982

Table B-4 Prices for Seleted Ccnsmier Goods in Itimbri 66Collectivity (umba Zone) Early 1982 and March 1983

Table B-S Estiated Prod of Princip Food Crops 68 in the Dwba Zone 1979-80 tbxoh 1981-82

Table B-6 Quantitl -a of Ag lltumral Ommdities frarsore 69 by =M frm Bmba to All Pcrts on the Zaim Rivers 1981 and 1982

ANMXE 5

Table 9-1 Retail Price Indices for Urban oushls in lWitt 76 Febuay c 1982

Table W-2 Retail Prices of Selecte4Arogua umdte 77and Cosumer Gods at Markets in the Towm of KikYit Febrtry-Dampwnbar 1982

Table M+-3 List of Shareholers IK 79 Table W-4 Su xazy CoA s prpos Rsed Bridge and 81

Ferry yiree pro w

Table W-5 Evlution of Prices for Principal Agricultural as Ccznofdties in the Ad-l Subregion 1980-1983

Table W-6 Mx lthly Shipments of Manioc to Kinshsa by Ste 8 ~langelu First O~rter 1983

Table M-7 Aricultua o and ti mon 93 in Idiofa Zone 1980-81 mid 1981-82

-(Table - Far ate Prices for Selected Czomities 1982 and 94 1983

Table M-9 Agricaltural awnity Purd ases by Fernanes 97 Inasamp CE 1980-1982

ANNEX 6

Table XN-1 Ammal Sbipnents of Selected Comucdities by A 106 fxrn Points Along the Zaire Paver Beoe Kisanganiand R to Kinshasa 1981-1982

Tabl XM-2 Amml Shipmts of Selected e 107 by a fra Points Along the asai and-_iiu Rivers to Kinshaa 1980-982

List of Figures ar 3M

Map of P~xblic of Zaire MmasEartatio1 Nabcak ix

Figure K-1 E3Intl d Cattle FawsNrth Kivu 1981 ithin to and Fro 47

ABBREVIATIONS

AFECOZA Association des Femmes Commercantes du Zaire

AMIZA Agence Maritime International Zaire

ANEZA Association National des Entrepreneurs av Zaire

CAPACO Societe de Cafe Papaine et Commerce

CIDA Canadian Internaticnal Vnvelopment Authority

CODAIK Compagnie du Developpement Agro-Paitoral du Kwango-Kwilu

DOA Department of Agriculture and Rural-Development

ESTAGRICO Societe Agricole et Cotoniere de lEst

FED Ponds Europeens de Developpement

GOZ Government of Zaire

INERA Institut National pour lEtude et la Recherche Agronomiques

ONATRA Office National des Transports

OPEZ Office des Petites etMoyennes Entreprises

OR Office des Routes

OZAC Office Zairois de Controle

PLZ Plantation Lever au Zaire

PUM Programme National Maize

PNR Programme National Riz

PNS Projet Nord Shaba

PRONAM Programme National Manioc

SNCZ Societe National Des Chemins de Fer du Zaire

SOFIDE Societe Financiere pour le Developpement

TISSAKIN Filatures et Tissages de Fibres a Kinshasa

1o s deg

o - D v bull uatIl6 -fII

)j - I aCENIRIampURICAN rMSCf

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-bull

i i SU AN

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- AND=)-- so7K

-_

- b-aA TRANSPOIAJTANNZTWOR aA

4 a 8amp llA

NGdaS Sasama Coo

- - i A NGO- ZAMBIA

PREFACE

This study is not a nationwide agricultural marketingassessment The USAID Small Farmer Marketing Access Projectteam travelled to four different regions of Zaire in the course of the study but the team was unable to visit manyimportant agricultural production areas Moreover the team spent too little time in each of the four regions to conductanything other than reconnaisance surveys Yet the problemsand constraints in the marketing of food crops and inputsinto food crop production were found to be similar acrossregions of Zaire Differences do exist of cburse owiag todissimilarities in geography climate demographiccharacteristics the resource base infrastructural development and the mix of food and industrial cropsHowever a number of common themes emerged whichcharacterize agricultural marketing constraints in the fourregions visited and probably other regions of Zaire as well

The report begins with an executive summary thatdiscusses these common constraints and opportunities acrossregions and summarizes the policy implications of our findings The summary is followed by six annexes whichinclude the transport consultants report and more detaileddiscussions of agricultural production and marketing in thefour regions visited None of these individual reports isexhaustive in its coverage of transportation andagricultural marketing constraints and opportunities

As is is common to all short term work the risk ofdrawing incorrect inferences and making misstatements ishigh The team is solely responsible for any errors andomissions that do eyist in the report Interested readers are recommended to consult other studies carried out by theWorld Bank FAO the FED the Canadian Cooreration andvarious agencies of the Government of Zaie (GOZ) forfurther information Additional references are found in the bibliography

The field work for this study was conducted duringseven weeks in March and April 1983 The teams itineraryis outlined below

March 5-9 Briefing Preliminary Interviews and Literature Review in Kinshasa

March 5-10 Field Work in Kongolo North Shaba

March 15-17 Field Work in Bukavu South Kivu

March 17-21 Field Work in North Kivu

Maa-ch 22-25 Field Work in Bumba Zone Equateur

March 26-April 4

Write-up and Discussion of Teams Preliminary Findings in Kinshasa

April i-12 Field Work in Kwilu Subregion Bandundu

April 13-16 Write-up and Discussion of Kwilu Trip_Report in Kinshasa

April 18-23 Followup Interviews and Researcae Kinshasa

The SMFA team was comprised of

Dr Duncan Miller USAIDSampTMD SFMA Project ManagerEconomist

2 Dr John Eoltzman SFMA Core Staff Member AgriculturalEconomist

3 Grace Finne Independent Consultant Transport Economist

Dr Miller is responsible for much of the institutional analysis particularly for the identification ofinstitutional and policy constraints to increasinqproduction and improving marketing Dr Holtzman analyzedagricultural commodity production marketing flows andpricing Ms Finne assessed the transport system in each ofthe four regions and identified transport constraints and opportunities

lndividuals n the USAID Mission in Kinshasa whoparticipated in the field work were David Leong (Design andEvaluation Office) Tshishiku Kabundi (Agricultural andRural Development Office) and Henriette Emond (ProgramOffice) Ms Emond also drafted the section of the Kwilutrip report on IdJofa zone Cit Ngumbu of the BureaudEtudes Department de lAgriculture accompanied the team to Bumbaand provided valuable insights

The team wishes to acknowledge the cooperation andassistance of many individuals and organi-ations in carryingout the study The USAID Mission is thanked for providinguseful information direction and logistical supportGovernment o2 Zaire officials officials in donor agenciesand development projects contractors to USAID traders processors and farmers are all ackzowledged for theirpatience and candor in responding to the teams endless questions

Economic Constraints

Zaire is a vast country of great geographic climaticand agricultural diversity Yet constraints to agriculturalproduction and marketing are strikingly similar acrossdiverse regions These similarities reflect in large partmacroeconomic difficulties common to all of Zaire Themacroeconomic climate is characterized by

1 Foreign exchange scarcities rnd hence critical shortages of imported capital goods vehicles spare parts and fuel

2 Burdensomi foreign debt and large government deficits

3 Deteriorating transportation and marketing infrastructure

4 Scarcity of trained manpower which leads to poormanagement of scarce resources particularlyin the public sector

5 Financial irresponsibility and widespreaddiversion of development funds and resources

6 Declining terms of trade for food crops vis-a-vis consumer goods and high levels of food imports(made artificially cheap by the overvalued exchange rate) which provide gravedisincentives to food crop production

Macroeconomic conditions in Zaire have deterioratedprogressively since the decline in international commodityprices in the mid 1970s particularly for copper and cobaltThe abortive program of zairianization implemented in1973-74 transferred control from foreign owned and managedfirms to poorly trained Zatrois who in many instancesneglected mismanaged and undermined the financial viabilityof those enterprises Although ownership was later restored to qualified expatriate managers a further blow was struckby the demonetization of 1979-80 which crippled many smalland medium size enterprises As the state of the macroeconomy has declined so has private sector confidencein the government of Zaire and the countrys economicfuture The recent and precipitious erosion in the value ofthe Zaire on the parallel market has further contributed toprivate sectir pessimism and greatly complicated anyprospects for stabilization and later growth

The macroeconomic environment is bleak and recoverywill be a long and arduous process requiring debtrescheduling massive resouzce transfers from multilateral and bilateral donors greatly improved macroeconomic planning and management better design and implementation ofongoing and future projects and far greater financialdiscipline While the public sector has performed less thanoptimally during the past decade poorly managing funds and resources and exacerbating scarcities the private sectorhas performed surprisingly well under some of the worstbusiness conditions in the world Private firms have continued to provide agricultural inputs market

agricultural commodities supply connumer goods and in someinstances maintain the collapsing transportation ardmarketing intrastructure in the face of acute shortages andoften bothersome government intervention In servicing therural areas private firms have sometimes establishedmonopolies or monopsonies Faiaers and sall traders arcusethe larger firms of unfair practices Yet the pri-atesector has supplied urban areas with foodstuffs andparticipated in the market of cash crops that earn foreignexchange with greater efficien-y and at lower cost than the public sector is capable of doing

Constraints tr Increasing Agricultural Production and Marketin-

The Small Farmer Mar eting Access team found commonthemes in conducting rapid assessments of agriculturalproduction and marketing constraints The principalconstraints to production are presented in Table 1 andconstraints to marketing in Table 2 The most constrainingfactors to increasing food crop production were found to be

Inadequate supply and distribution of seedand the absence of commercial seed productionand distribution

2 Scarcity of agricultural implements in some areas

3 No use of modern agricultr=tl inputs such as fertilizers insecticides herbicides animal traction or mechanical inputs (tractorstillers pumps etc)

4 An underfunded and poorly trained extension service generally lacking any improvedpackages to extend to farmers As enforcers of minimum acreage requirements extension agents typically have bad rapport with rroshyducers

5 Land degradation through uncontrolled soil erosion slash and burn agriculture and abandonment of crop rotation in some areas

6 Labor shortages in areas near large cities or where returns to alternative enterprises(gold and diamond prospecting smugglingof coffee and consumer goods) are signifishycantly higher than returns to farming

7 Irregular evacuation of food crops from certain production zones particularly in more isolated areas Spoilage is high and produce is not marketed during some yearsUncertain market access is a disincentive to

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ment and an emphasis on regulating rather than facilitating agricultural production and marketing under-mines confidence in government instittions at the local level The government is viewed increasingly as an adversary

The Need for Interventions that Support Private Sector and Local Initiatives

While it is not difficult to identify constraints to agricultural production and marketing in Zaire the designand implementation of interventions to alleviate these constraints is exceedingly difficult in the presentmacroeconomic and policy environment Rather than prescribespecific interventions the SPMA team will offer some general counsel and words of caution

In each of the four regions it visited the SFMA team was impressed with the dynamism of the rural population and the capacity of private firms to move and transform goodsunder difficult sets of circumstances In contrast public sector agencies including the agricultural extension service the Office des Routes ONATRA and SNCZ local offiLes of Economic Affairs and parastatal marketing agencies performed rather poorly To be fair it is important to note that public agencies receive less than adequate support from the central government in the form of funds material training supervision and incentives Yet given the existing perverse Set of incentives facing GOZ officials which encourage financial mismanagerant and poor job performance it is impossible to expect majorimprovements in public sector accountability and performance in the medium run USAID is therefore encouraged to work closely with local institutions (cooperatives missionary groups ANEZA chapters PVOs and the private sector in tackling agricultural production and marketing4problems Marketing interventions lend themselves well to privatefirms in Zaire which move food crops from farmgate to market process agricultural products and distribute agricultural inputs and consumer goods Moreover privatefirms maintain a good proportion of the rural roads in Zaire through contracts with the Office des Routes access to the Fonds de Relance Econmmique and self-financingBy ensuring adequate road maintenance private marketing agents reduce marketing costs increase capital turnover and volume of produce buying and establish good rapport with the rural population served by these roads

In promoting the devlopement of agricultural marketing in a particular region USAID should make its assistance conditional upon greater indirect and direct resource transfers to private firms and local organizations Devising new arrangements and institutions for channeling aid will require imagination care and skill in

negotiating Privato firms should not be allowed to generate and determiri the use of funds without supervision as in the case of the -onds de Realance Economique Careful monixoring of resource flows and training in financial management will be necessary in order to hold aid recipientsaccountable And it is in the areas of training managementand financial analysis that USAID enjoyTs a comparative advantage

In many regions of Zaire rehabilitation of existingroads and improvement of feeder road networks wil lead to increases in marketed output These increases will result irom greater incentives to produce Greater availability of agricultural inputs and consumer goods increased competition among buyers and higher agricultural prices(resulting from transporters cost savings and greatercompetition) will provide adequate incentives In a periodof declining agriculture commodity terms of trade howeverthe effect of increased commercial activity on rural households nutrition will need to be monitored carefullyWhile road rehabilitation and construction are not panaceasimproved access will facilitate increased agriculturalproduction and marketing in many areas of Zaire which are presently seviced irregularly or not at all by privatemarketing agents

In order to enable small and medium size private firms to benefit fully from improved access USAID will need to provide medium term investment and short term agriculturalbuying credit The existing financial institutions particularly the BCZ and SOFIDE funnel most of their credit to large well-financed firms Although these larger firms could use mure funds (and they do provide useful marketingservices) access to credit does not constrain their activites to the extent that it does smaller firms HenceUSAID should seek to complement those financial institutions that assist larger firms By designing institutions that improve small traders access to vehicles spare partsfuel storage facilities and funds for agricului-iral buyingUSAID will help to increase competitiotA for prodice This will help to discipline larger firms who collect monopoly rents in rural areas where they are thc auie buyers and sellers At the same time that smaller firms obtain better access to formal credit USAID will need to train these firms in financial management as well as to monitor closelythe loan disbursemene and repayment process Such interventions are necessarily USAID-resource intensive and entail higher management costs but the investment in human capital development in he private sector has a highpotential payoff PVOs such as the Peace Corps and AFRICARE could be contracted to provide the necessary technical and managerial resources Missionary organizations could also help

USAID can most effectively intervene in agriculturalmarketing in Zaire by concentrating its scarce resources in one or two regions prettzably where USAID projects are already underway Interventions that seek to improve rural and feeder roads provide short and medium term credit and management training to smaller marketing agents monitor rural household nutrition and improve distribution netvwors for seed agricultural implements and consumer good hAv6- obvious complementarities that will reinforce the agricultural development process While the primaryobjective of UShID interventions should be to improve the liveinood of rural producers in Zaire an important albeit secondary objective may be to improve the food supplysituation in large urban areas The proximity of regionFsuch as Eandundu and Bas Zaire to Kinshasa and of North Shaba to Lumbumbashi and other cities in the copper belt is advantageous in that it permits satisfaction of the above two objectives

Structure of the Report

Each of the separate regional marketing reports and the transport consultants report appear as individual annexes The transport annex (no 1) describes the transportation systems in three of the four regions visited (excluding Kwilu Subregion) identifies transportconstraints and prescribes interventions in the transportsector that merit USAID examination Annex 2 analyzes maize production and marketing in North Shaba and discusses constraints to increasing production and improving marketingthat still exist after five years of USAID intervention in the North Shaba Development Project Annex 3 examines agricultural marketing in the area around Bukavu (SouthKivu) and in North Kivu Special attention is devoted to marketing of high value produce such as vegetables and beef to urban markets in other regions of Zaire (principally Kinshasa) Annex 4 analyzes rice productionand marketing in the Bumba zone identifies constraints and prescribes means for alleviating these constraints Annex 5 examines marketing of a broad range of staple crops from Kwilu Subregion (Bandundu) and discusses issues of institutional coordination and jurisdiction in a regionwhere a number of projects are currently underway The last annex (no 6) describes agricultura marketing in the Kinshasa food shed and discusses the applied research programs on marketing conducted by several organizations

ANNEX 1

STUDY OP SM4ALL FARMER MARIETIHG ACCESS RWISPORT SSTES AND CotSTRANTS

Trip Report March 10-March 25 1983 KOtGOLO-AIORT SHSA (March 10-iS)

BUKAVU-SOUTH VU (March 15-17) GONA - NORTH KIVU (March 17-21) BUMB - EQUT=UR March 21-25)

By Grace W Finna Consultant

Objectives

Th objectives of the transport reconnaissance of selective uarketing centers ware - To obtain an overview of existing tranuport systs for marketing of agricultural c-odities

- To identify transport constraints in marketing of agricultural Commoditics

- To indicate transport impro-7ment prmjects within the overall framework of AID programs for Zaire

- To make a preliminary ranking of alternate transport projects according to perceived benefits for marketing of agricultural products

Eonglo - 2ynzv area

1 Overview of existing system for marketing of agricultural commodities

1211 Tranport of Corn

Corn is the most important agricultural co~modiLy marketed fro the Kongolo-gyun-u area to major consumption ceaters These centers are mainly located in th-i South Rhaba industrial belt including Lubumbashi Likasi and Kolwvai The marketing season starto in April which also marks the beginning of the dry seaon Marketing o corn ends in September The rainy season usually starts in November The fact that corn is marketed in the dry season has the following transport implications

- Agricultural feeder roads are passable even with a minimum of maintenance effort

- Trucks registered outside the corn production area many reach the area by national rods in spite of the generally poor condition of these roads

ANNEX 6

Table XN-1 Ammal Sbipnents of Selected Comucdities by A 106 fxrn Points Along the Zaire Paver Beoe Kisanganiand R to Kinshasa 1981-1982

Tabl XM-2 Amml Shipmts of Selected e 107 by a fra Points Along the asai and-_iiu Rivers to Kinshaa 1980-982

List of Figures ar 3M

Map of P~xblic of Zaire MmasEartatio1 Nabcak ix

Figure K-1 E3Intl d Cattle FawsNrth Kivu 1981 ithin to and Fro 47

ABBREVIATIONS

AFECOZA Association des Femmes Commercantes du Zaire

AMIZA Agence Maritime International Zaire

ANEZA Association National des Entrepreneurs av Zaire

CAPACO Societe de Cafe Papaine et Commerce

CIDA Canadian Internaticnal Vnvelopment Authority

CODAIK Compagnie du Developpement Agro-Paitoral du Kwango-Kwilu

DOA Department of Agriculture and Rural-Development

ESTAGRICO Societe Agricole et Cotoniere de lEst

FED Ponds Europeens de Developpement

GOZ Government of Zaire

INERA Institut National pour lEtude et la Recherche Agronomiques

ONATRA Office National des Transports

OPEZ Office des Petites etMoyennes Entreprises

OR Office des Routes

OZAC Office Zairois de Controle

PLZ Plantation Lever au Zaire

PUM Programme National Maize

PNR Programme National Riz

PNS Projet Nord Shaba

PRONAM Programme National Manioc

SNCZ Societe National Des Chemins de Fer du Zaire

SOFIDE Societe Financiere pour le Developpement

TISSAKIN Filatures et Tissages de Fibres a Kinshasa

1o s deg

o - D v bull uatIl6 -fII

)j - I aCENIRIampURICAN rMSCf

EU Cf lP----C-bull

-bull

i i SU AN

-Z t I SU

-I--- -shy ow

GABON i

- AND=)-- so7K

-_

- b-aA TRANSPOIAJTANNZTWOR aA

4 a 8amp llA

NGdaS Sasama Coo

- - i A NGO- ZAMBIA

PREFACE

This study is not a nationwide agricultural marketingassessment The USAID Small Farmer Marketing Access Projectteam travelled to four different regions of Zaire in the course of the study but the team was unable to visit manyimportant agricultural production areas Moreover the team spent too little time in each of the four regions to conductanything other than reconnaisance surveys Yet the problemsand constraints in the marketing of food crops and inputsinto food crop production were found to be similar acrossregions of Zaire Differences do exist of cburse owiag todissimilarities in geography climate demographiccharacteristics the resource base infrastructural development and the mix of food and industrial cropsHowever a number of common themes emerged whichcharacterize agricultural marketing constraints in the fourregions visited and probably other regions of Zaire as well

The report begins with an executive summary thatdiscusses these common constraints and opportunities acrossregions and summarizes the policy implications of our findings The summary is followed by six annexes whichinclude the transport consultants report and more detaileddiscussions of agricultural production and marketing in thefour regions visited None of these individual reports isexhaustive in its coverage of transportation andagricultural marketing constraints and opportunities

As is is common to all short term work the risk ofdrawing incorrect inferences and making misstatements ishigh The team is solely responsible for any errors andomissions that do eyist in the report Interested readers are recommended to consult other studies carried out by theWorld Bank FAO the FED the Canadian Cooreration andvarious agencies of the Government of Zaie (GOZ) forfurther information Additional references are found in the bibliography

The field work for this study was conducted duringseven weeks in March and April 1983 The teams itineraryis outlined below

March 5-9 Briefing Preliminary Interviews and Literature Review in Kinshasa

March 5-10 Field Work in Kongolo North Shaba

March 15-17 Field Work in Bukavu South Kivu

March 17-21 Field Work in North Kivu

Maa-ch 22-25 Field Work in Bumba Zone Equateur

March 26-April 4

Write-up and Discussion of Teams Preliminary Findings in Kinshasa

April i-12 Field Work in Kwilu Subregion Bandundu

April 13-16 Write-up and Discussion of Kwilu Trip_Report in Kinshasa

April 18-23 Followup Interviews and Researcae Kinshasa

The SMFA team was comprised of

Dr Duncan Miller USAIDSampTMD SFMA Project ManagerEconomist

2 Dr John Eoltzman SFMA Core Staff Member AgriculturalEconomist

3 Grace Finne Independent Consultant Transport Economist

Dr Miller is responsible for much of the institutional analysis particularly for the identification ofinstitutional and policy constraints to increasinqproduction and improving marketing Dr Holtzman analyzedagricultural commodity production marketing flows andpricing Ms Finne assessed the transport system in each ofthe four regions and identified transport constraints and opportunities

lndividuals n the USAID Mission in Kinshasa whoparticipated in the field work were David Leong (Design andEvaluation Office) Tshishiku Kabundi (Agricultural andRural Development Office) and Henriette Emond (ProgramOffice) Ms Emond also drafted the section of the Kwilutrip report on IdJofa zone Cit Ngumbu of the BureaudEtudes Department de lAgriculture accompanied the team to Bumbaand provided valuable insights

The team wishes to acknowledge the cooperation andassistance of many individuals and organi-ations in carryingout the study The USAID Mission is thanked for providinguseful information direction and logistical supportGovernment o2 Zaire officials officials in donor agenciesand development projects contractors to USAID traders processors and farmers are all ackzowledged for theirpatience and candor in responding to the teams endless questions

Economic Constraints

Zaire is a vast country of great geographic climaticand agricultural diversity Yet constraints to agriculturalproduction and marketing are strikingly similar acrossdiverse regions These similarities reflect in large partmacroeconomic difficulties common to all of Zaire Themacroeconomic climate is characterized by

1 Foreign exchange scarcities rnd hence critical shortages of imported capital goods vehicles spare parts and fuel

2 Burdensomi foreign debt and large government deficits

3 Deteriorating transportation and marketing infrastructure

4 Scarcity of trained manpower which leads to poormanagement of scarce resources particularlyin the public sector

5 Financial irresponsibility and widespreaddiversion of development funds and resources

6 Declining terms of trade for food crops vis-a-vis consumer goods and high levels of food imports(made artificially cheap by the overvalued exchange rate) which provide gravedisincentives to food crop production

Macroeconomic conditions in Zaire have deterioratedprogressively since the decline in international commodityprices in the mid 1970s particularly for copper and cobaltThe abortive program of zairianization implemented in1973-74 transferred control from foreign owned and managedfirms to poorly trained Zatrois who in many instancesneglected mismanaged and undermined the financial viabilityof those enterprises Although ownership was later restored to qualified expatriate managers a further blow was struckby the demonetization of 1979-80 which crippled many smalland medium size enterprises As the state of the macroeconomy has declined so has private sector confidencein the government of Zaire and the countrys economicfuture The recent and precipitious erosion in the value ofthe Zaire on the parallel market has further contributed toprivate sectir pessimism and greatly complicated anyprospects for stabilization and later growth

The macroeconomic environment is bleak and recoverywill be a long and arduous process requiring debtrescheduling massive resouzce transfers from multilateral and bilateral donors greatly improved macroeconomic planning and management better design and implementation ofongoing and future projects and far greater financialdiscipline While the public sector has performed less thanoptimally during the past decade poorly managing funds and resources and exacerbating scarcities the private sectorhas performed surprisingly well under some of the worstbusiness conditions in the world Private firms have continued to provide agricultural inputs market

agricultural commodities supply connumer goods and in someinstances maintain the collapsing transportation ardmarketing intrastructure in the face of acute shortages andoften bothersome government intervention In servicing therural areas private firms have sometimes establishedmonopolies or monopsonies Faiaers and sall traders arcusethe larger firms of unfair practices Yet the pri-atesector has supplied urban areas with foodstuffs andparticipated in the market of cash crops that earn foreignexchange with greater efficien-y and at lower cost than the public sector is capable of doing

Constraints tr Increasing Agricultural Production and Marketin-

The Small Farmer Mar eting Access team found commonthemes in conducting rapid assessments of agriculturalproduction and marketing constraints The principalconstraints to production are presented in Table 1 andconstraints to marketing in Table 2 The most constrainingfactors to increasing food crop production were found to be

Inadequate supply and distribution of seedand the absence of commercial seed productionand distribution

2 Scarcity of agricultural implements in some areas

3 No use of modern agricultr=tl inputs such as fertilizers insecticides herbicides animal traction or mechanical inputs (tractorstillers pumps etc)

4 An underfunded and poorly trained extension service generally lacking any improvedpackages to extend to farmers As enforcers of minimum acreage requirements extension agents typically have bad rapport with rroshyducers

5 Land degradation through uncontrolled soil erosion slash and burn agriculture and abandonment of crop rotation in some areas

6 Labor shortages in areas near large cities or where returns to alternative enterprises(gold and diamond prospecting smugglingof coffee and consumer goods) are signifishycantly higher than returns to farming

7 Irregular evacuation of food crops from certain production zones particularly in more isolated areas Spoilage is high and produce is not marketed during some yearsUncertain market access is a disincentive to

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ment and an emphasis on regulating rather than facilitating agricultural production and marketing under-mines confidence in government instittions at the local level The government is viewed increasingly as an adversary

The Need for Interventions that Support Private Sector and Local Initiatives

While it is not difficult to identify constraints to agricultural production and marketing in Zaire the designand implementation of interventions to alleviate these constraints is exceedingly difficult in the presentmacroeconomic and policy environment Rather than prescribespecific interventions the SPMA team will offer some general counsel and words of caution

In each of the four regions it visited the SFMA team was impressed with the dynamism of the rural population and the capacity of private firms to move and transform goodsunder difficult sets of circumstances In contrast public sector agencies including the agricultural extension service the Office des Routes ONATRA and SNCZ local offiLes of Economic Affairs and parastatal marketing agencies performed rather poorly To be fair it is important to note that public agencies receive less than adequate support from the central government in the form of funds material training supervision and incentives Yet given the existing perverse Set of incentives facing GOZ officials which encourage financial mismanagerant and poor job performance it is impossible to expect majorimprovements in public sector accountability and performance in the medium run USAID is therefore encouraged to work closely with local institutions (cooperatives missionary groups ANEZA chapters PVOs and the private sector in tackling agricultural production and marketing4problems Marketing interventions lend themselves well to privatefirms in Zaire which move food crops from farmgate to market process agricultural products and distribute agricultural inputs and consumer goods Moreover privatefirms maintain a good proportion of the rural roads in Zaire through contracts with the Office des Routes access to the Fonds de Relance Econmmique and self-financingBy ensuring adequate road maintenance private marketing agents reduce marketing costs increase capital turnover and volume of produce buying and establish good rapport with the rural population served by these roads

In promoting the devlopement of agricultural marketing in a particular region USAID should make its assistance conditional upon greater indirect and direct resource transfers to private firms and local organizations Devising new arrangements and institutions for channeling aid will require imagination care and skill in

negotiating Privato firms should not be allowed to generate and determiri the use of funds without supervision as in the case of the -onds de Realance Economique Careful monixoring of resource flows and training in financial management will be necessary in order to hold aid recipientsaccountable And it is in the areas of training managementand financial analysis that USAID enjoyTs a comparative advantage

In many regions of Zaire rehabilitation of existingroads and improvement of feeder road networks wil lead to increases in marketed output These increases will result irom greater incentives to produce Greater availability of agricultural inputs and consumer goods increased competition among buyers and higher agricultural prices(resulting from transporters cost savings and greatercompetition) will provide adequate incentives In a periodof declining agriculture commodity terms of trade howeverthe effect of increased commercial activity on rural households nutrition will need to be monitored carefullyWhile road rehabilitation and construction are not panaceasimproved access will facilitate increased agriculturalproduction and marketing in many areas of Zaire which are presently seviced irregularly or not at all by privatemarketing agents

In order to enable small and medium size private firms to benefit fully from improved access USAID will need to provide medium term investment and short term agriculturalbuying credit The existing financial institutions particularly the BCZ and SOFIDE funnel most of their credit to large well-financed firms Although these larger firms could use mure funds (and they do provide useful marketingservices) access to credit does not constrain their activites to the extent that it does smaller firms HenceUSAID should seek to complement those financial institutions that assist larger firms By designing institutions that improve small traders access to vehicles spare partsfuel storage facilities and funds for agricului-iral buyingUSAID will help to increase competitiotA for prodice This will help to discipline larger firms who collect monopoly rents in rural areas where they are thc auie buyers and sellers At the same time that smaller firms obtain better access to formal credit USAID will need to train these firms in financial management as well as to monitor closelythe loan disbursemene and repayment process Such interventions are necessarily USAID-resource intensive and entail higher management costs but the investment in human capital development in he private sector has a highpotential payoff PVOs such as the Peace Corps and AFRICARE could be contracted to provide the necessary technical and managerial resources Missionary organizations could also help

USAID can most effectively intervene in agriculturalmarketing in Zaire by concentrating its scarce resources in one or two regions prettzably where USAID projects are already underway Interventions that seek to improve rural and feeder roads provide short and medium term credit and management training to smaller marketing agents monitor rural household nutrition and improve distribution netvwors for seed agricultural implements and consumer good hAv6- obvious complementarities that will reinforce the agricultural development process While the primaryobjective of UShID interventions should be to improve the liveinood of rural producers in Zaire an important albeit secondary objective may be to improve the food supplysituation in large urban areas The proximity of regionFsuch as Eandundu and Bas Zaire to Kinshasa and of North Shaba to Lumbumbashi and other cities in the copper belt is advantageous in that it permits satisfaction of the above two objectives

Structure of the Report

Each of the separate regional marketing reports and the transport consultants report appear as individual annexes The transport annex (no 1) describes the transportation systems in three of the four regions visited (excluding Kwilu Subregion) identifies transportconstraints and prescribes interventions in the transportsector that merit USAID examination Annex 2 analyzes maize production and marketing in North Shaba and discusses constraints to increasing production and improving marketingthat still exist after five years of USAID intervention in the North Shaba Development Project Annex 3 examines agricultural marketing in the area around Bukavu (SouthKivu) and in North Kivu Special attention is devoted to marketing of high value produce such as vegetables and beef to urban markets in other regions of Zaire (principally Kinshasa) Annex 4 analyzes rice productionand marketing in the Bumba zone identifies constraints and prescribes means for alleviating these constraints Annex 5 examines marketing of a broad range of staple crops from Kwilu Subregion (Bandundu) and discusses issues of institutional coordination and jurisdiction in a regionwhere a number of projects are currently underway The last annex (no 6) describes agricultura marketing in the Kinshasa food shed and discusses the applied research programs on marketing conducted by several organizations

ANNEX 1

STUDY OP SM4ALL FARMER MARIETIHG ACCESS RWISPORT SSTES AND CotSTRANTS

Trip Report March 10-March 25 1983 KOtGOLO-AIORT SHSA (March 10-iS)

BUKAVU-SOUTH VU (March 15-17) GONA - NORTH KIVU (March 17-21) BUMB - EQUT=UR March 21-25)

By Grace W Finna Consultant

Objectives

Th objectives of the transport reconnaissance of selective uarketing centers ware - To obtain an overview of existing tranuport systs for marketing of agricultural c-odities

- To identify transport constraints in marketing of agricultural Commoditics

- To indicate transport impro-7ment prmjects within the overall framework of AID programs for Zaire

- To make a preliminary ranking of alternate transport projects according to perceived benefits for marketing of agricultural products

Eonglo - 2ynzv area

1 Overview of existing system for marketing of agricultural commodities

1211 Tranport of Corn

Corn is the most important agricultural co~modiLy marketed fro the Kongolo-gyun-u area to major consumption ceaters These centers are mainly located in th-i South Rhaba industrial belt including Lubumbashi Likasi and Kolwvai The marketing season starto in April which also marks the beginning of the dry seaon Marketing o corn ends in September The rainy season usually starts in November The fact that corn is marketed in the dry season has the following transport implications

- Agricultural feeder roads are passable even with a minimum of maintenance effort

- Trucks registered outside the corn production area many reach the area by national rods in spite of the generally poor condition of these roads