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World Bank wants improved agriculture regulation

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Malawi like other low and middle income countries have been urged to improve agriculture regulations to feed the world’s growing population and improving farmers’ livelihoods.

The call is contained in the World Bank Group’s Enabling the Business of Agriculture (EBA) 2017 report—released on Wednesday in Washington DC—by Preeti Ahuja, Practice Manager, World Bank Food and Agriculture Global Practice.

Malawi has just formulated the agriculture policy to look into such issues raised by World Bank. The food policy is yet to be formulated to regulate dietary issues.

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The report, according to Ahuja, says smart regulations that ensure safety and quality control while avoiding burdensome and inefficient requirements are highlighted in the report as good practices that governments may wish to consider in their reform efforts.

With Malawi’s economy is still agro-based, the report argues that, while many countries are already home to strong, commercially-oriented agriculture, more needs to be done, for example, by lowering transaction costs for farmers and firms engaged in domestic trade and exports, by improving water permit systems for irrigation, or by providing better conditions for microfinance institutions.

“Sustainable, inclusive investments in the agriculture and food sectors help create jobs—on farms, in markets, cities, towns and villages and throughout the farm-to-table food production and supply chains— which, alongside improved access to affordable and balanced, diverse diets, are key to fighting extreme poverty and for boosting shared prosperity,” said Ahuja.

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He added that: “Governments have a key role to play in supporting economically, socially and environmentally responsible policies and practices that help smallholders while removing burdensome processes that add to food costs and discourage agribusinesses from entering the market.”

The report, the third in an annual series, presents data on legal barriers for farmers, entrepreneurs and businesses operating in agriculture in 62 countries and across the topics of land, seed, fertiliser, machinery, water, livestock, finance, markets, transport, and information and communication technology (ICT). The 2017 edition also expands its survey of laws and regulations that impact environmental sustainability and gender.

Globally comparable data helps countries know where they stand, compare their performance with that of their neighbours, and identify areas for improvement that are critical to building a thriving agribusiness sector.

For example, obtaining export documents for agricultural produce takes on average six days in Sub-Saharan African countries, compared with only 2.3 days in the Middle East and North Africa region. Such delays not only increase business costs, but also increase food waste and make it more likely that shipments will be rejected upon arrival due to spoilage or low quality.

“Government regulations affect agricultural development through several dimension, including agricultural inputs such as seed, fertiliser, land and water, as well as small-scale and remote farmers’ access to financial services,” said Federica Saliola, Programme Manager, World Bank Vice Presidency for Development Economics.

The call is in tandem with the recent gesture by the African Development Bank (AfDB) to approve US$20 million for farmers in Malawi, Mozambique and Zimbabwe and commodity suppliers so that they increase their revenues and produce quality crops for export.

The Soft Commodity Finance—which was part of the Meridian facility—is designed to provide pre-and post-shipment finance along various stages of Meridian’s soft commodity value chain operations in the three countries concerned.

The Bank said the facility will be used to provide funding to purchase farm inputs for farmers to ensure consistency and quality of the commodities being supplied; purchase of soft commodities from over 10, 000 farmers in Malawi, Zimbabwe and Mozambique.

The Enabling the Business of Agriculture (EBA) project focuses on identifying and monitoring regulations that affect agriculture and agribusiness markets.

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