Mozambique: Cabo Delgado foresees over 1.3 million tons of agricultural produce
File photo (for illustration purposes only) / Most Mozambican peasants farm less than 1.5 hectares with only a hoe
Pigeon pea may seem an obscure crop, but up to 2 million peasants grew it this year because they believed they had a guaranteed market. Now many cannot sell their crop, which is a severe blow and will seriously set back the development of family commercial farming.
Most Mozambican peasants farm less than 1.5 hectares with only a hoe. That does not even provide enough food, and dooms them to permanent poverty. Many donor and government programmes have tired to help peasants expand their area and produce cash crops. Living on the margin, small farmers are reluctant to take risks, and so will only introduce a new crop if they have an assured market. In other countries this is often provided by a marketing board offering a guaranteed price, but Mozambique is not allowed to have such a marketing board. So the push has been for various market mechanisms and contract farming, but with only limited success.
Pigeon pea (feijao boer) is the ideal peasant crop – it requires no inputs, it is nitrogen fixing so improves soil fertility, and it is not a good crop for large farmers. But it is only eaten locally in small quantities in the north where it is known as ervilha. However pigeon pea is the basis of dhal, which is consumed in large quantities in India. Projections in 2014-15 were that Indian consumption was rising much faster than production, so production for export was encouraged.
Fear of a dhal shortage was so great that in July 2016 Narendra Modi made the first ever visit to Mozambique of an Indian prime minister, primarily to promote pigeon pea production and exports. A memorandum of understanding (MoU) was signed in which India agreed to import increasing amounts of pigeon peas, with 125,000 tonnes this year.
Farmgate prices for pigeon peas last year were MT 40-50 per kilogram, and a peasant farmer can produce 350 kg per hectare. Even half a hectare of pigeon pea would earn more than $100, a huge amount of cash from Mozambican peasants. India sets a minimum support price which is at a similar level.
The high price caused a rush of farmers to grow pigeon peas. In India there was a boom in production much above any expectations, and on 5 August this year the Indian government imposed an import ban – except for the one country with an MoU, Mozambique. Indian traders had imported 32,000 tonnes from Mozambique before the ban and suddenly stopped imports.
Meanwhile, Mozambican peasants have produced up to 300,000 tonnes of pigeon peas, up from 60,000 tonnes just two years ago. This could have put $200 mn into the peasant economy, in a huge boost for poor rural areas. Now it has all stopped; traders are only paying one-tenth of the old price, MT 4-5/kg. A few Indian traders are importing at $300/tonne (MT 18/kg) which suggests Indian and Mozambican traders will make huge profits out of the crisis.
Two weeks ago the Indian High Commissioner, Rudra Gaurav, went to Nampula and met traders and told them that there was still 93,000 tonnes of the quota unfilled. Mozambican production is well above the quota, but pigeon pea can be stored for up to a year, so some traders might store until April, the start of the next quota year, and export then.
The World Bank’s Let’s Work project and the International Growth Centre have both been working with pigeon peas and raised a warning at the same time as the Indian import ban. As the crisis has intensified the World Bank on 29 September hosted a meeting of traders, the ministries of agriculture and finance, and the Indian High Commissioner – who restated the commitment to buy up to the quota level.
Comment: As always in Mozambique, it is the peasants who carry all the risk. Large quantities of pigeon pea are still in the field, and many peasants may not even harvest because of the derisory price. But will anyone be able to convince the peasants to take a risk on another cash crop next year? In our book Galinhas e Cerveja, we argue that peasants will grow anything that pays, and assured markets and prices are essential to share the risk and promote peasant commercial production.
Elsewhere in the world, including in Europe and the US, farmers are guaranteed prices. Yet these same countries as donors do not allow Mozambique to do so. They seem to argue that Mozambican farmers are so much better than European farmers, that the only way to level the playing field is to allow subsidy in Europe and the US, but not in Mozambique.
Pigeon pea will be a hard lesson in market economics for 2 million peasant families. How many will take such a risk again?
By Joseph Hanlon
Also Read: Unsold pigeon peas at risk of rotting in Cabo Delgado
Also Read: India will still import Mozambican pigeon peas, says diplomat
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