Jun. 30, 2015


Emerson Zhou

Mozambique

Emerson Zhou

Executive Director, Beira Agricultural Growth Corridor Partnership (BAGCP)

TBY talks to Emerson Zhou, Executive Director, Beira Agricultural Growth Corridor Partnership (BAGCP), on strategies employed to boost production and exports.

BIO

Emerson Zhou is the Executive Director of the Beira Agricultural Growth Corridor (BAGC), a PPP that aims to promote investment in the agriculture sector in central Mozambique by facilitating entry by socially responsible investors willing to develop business models supporting smallholder farmers. Emerson is an Agricultural Economist with over 25 years of experience in managing and providing technical assistance to inclusive agribusiness support initiatives in Africa. He holds an MSc degree from the University of London (UK).

How has the production of agricultural products and livestock evolved in the Beira Corridor since the establishment of the Beira Agricultural Growth Corridor (BAGC) in 2010?

Agricultural production tends to go through cycles, depending on the nature of the seasons. But having said that, we have noticed a general increase in the level of productivity in terms of yields per hectare, especially at the level of smallholder farming. This is due to a slight increase in the use of improved seeds and chemicals, which roughly translates into a 15% rise in yields over this period.

How is BAGCP collaborating with financial entities to improve small-scale farmers' access to credit?

Banks are able, to some extent, to meet demand for seasonal and short-term investment finance, but when it comes to long-term finance, they have yet to figure out a way to provide financing windows that can be helpful to farmers and other agribusiness investors. We continue talking with them and other entities about the need for longer-term capital that will enable investments in long-term productive assets such as irrigation, fruits, and animal breeding stock. And additionally, addressing the issue of irrigation and irrigation infrastructure is paramount for the rapid growth of agriculture in the corridor.

What products offer the greatest potential for the next few years in the Beira Corridor?

The Beira Corridor is lucky in that it can support almost anything that one may want to produce. However, what has been coming through is fruit, such as lychees and avocados, which offer big opportunities. Right now, there are some large companies that want to undertake a major venture in lychee production. The livestock value chain is also producing opportunities, such as feed and processing facilities, and we have been talking to certain potential investors. Beef cattle, dairy, and poultry are clear focus areas, while horticulture is also important. Traditionally, rice is a significant crop in the Lower Zambezi and Sofala; the country continues to import almost all of its rice need, and, therefore, rice investments remain relevant. The challenge now is to produce it at competitively low cost.

What needs to be done to promote exports from the Beira Corridor?

First of all, agriculture within the corridor needs to improve its competitiveness. We need to reduce the costs of production for commodities such as fertilizer and livestock feed. The country is heavily dependent on imports and these come in two forms: finished products and raw materials. And because we are importing, we are also importing costs, which impacts our competitiveness. We have been discussing ways to reduce costs with the fertilizer industry by lowering taxes and improving on logistics. Part of this is the need to improve roads and other elements of transport infrastructure. Meanwhile, the financing of local businesses is a pressing matter in need of urgent attention, as inadequate financing is a major constraint on the ability of local businesses to grow through investment.

How would you characterize the relationship between agriculture and mining in the Beira Corridor?

The opportunities that the mining sector can provide, especially to support food production, are great. At present, neighboring countries produce the food consumed by the employees of mining companies. While the mining companies see this as a procurement problem, our institution, the Beira Agricultural Growth Corridor (BAGC), considers that long-term development of agriculture in the region would be a valuable solution. The BAGC is forging links between mining and agriculture by structuring demand and developing supply chains involving local producers. The mining companies' need for food gives local farmers a nearby market, especially during the construction phase. The role of the BAGC is to create incentives for local sourcing, and to develop core investment in local agricultural development.

What are your expectations for the Beira Development Corridor Summit?

The event will raise issues and take stock of where we are now, developments in the world of agriculture, and information on new programs that might prove helpful. It also builds consensus on priorities for investment areas. Investors can leave with better knowledge of the corridor, and information about where they can invest tomorrow.

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