Commercial agriculture gaining impetus in Mozambique

16 April 2012

Commercial agriculture is “gaining impetus” in Mozambique due to various large-scale private farming and livestock projects which are finally enabling the country to benefit from the potential of that economic activity sector, reports the Economist Intelligence Unit (EIU).

“Commercial agriculture, which has received less investment that other capital-intensive sectors, is expanding and the country’s strong agricultural potential is being developed,” indicates the EIU in its most recent report on Mozambique, accessed by Macauhub.

The report highlights the projects of Agriterra, a multinational quoted on the London Stock Exchange, as a sign of the activity’s expansion in Mozambique.

Mozbife, which pertains to that holding company, is one of the country’s “most promising commercial agriculture firms” and has announced continuous progress in its Mozambique operations, the EIU article states.

It is currently building a large-scale livestock operation in Manica province with 10,000 head of cattle and a slaughterhouse in the provincial capital Chimoio, which should start operating in the third quarter of 2012.

The company has a 50-year licence to exploit the land and aims to meet growing meat consumption in the Mozambican market, where South African products have held a dominant position for many years.

Agriterra is also involved in growing maize, via the company Desenvolvimento e Comercialização Agrícola (DECA).

Figures from the most recent agricultural census compiled by Mozambique’s National Statistics Institute indicate that in 2009-10 the total area under cultivation was 47% larger than one decade previously, a growth rate more than double that of the population.

The total number of agricultural operations grew less than the cultivated area, 25%, indicating that size increased more than the number of productive units.

Mozambique still has large amounts of surplus land despite the growth, as only 15.6% of potential farmland is being used.

This underuse is mainly due to the lack of infrastructures associated to agriculture, such as roads, irrigation and storage units.

Another obstacle has been the Mozambican system for leasing state-held land to farmers, which prevents them from using this asset as a guarantee to obtain bank financing.

Mozambique’s most recent state budget indicated that agriculture was a priority sector, assigning it 11.6% of total spending in 2012.

In the next ten years the Mozambican government plans to invest nearly US$540 million in irrigation to boost agricultural production and productivity.

The government is counting on partners such as China, Brazil and the European Union to help efforts to increase the country’s agricultural self-sufficiency and farmers’ revenues by stimulating surplus production. (macauhub)