The 2024 Forum on China-Africa Cooperation (FOCAC) summit marked a pivotal moment in the evolving economic relationship between China and African nations. Among the many initiatives and agreements forged during the summit, the agricultural cooperation deals stood out as a beacon of potential growth, especially for Zambia. One notable agreement included a protocol for Zambian soybeans, a move that could have significant implications for Zambia’s economy and agricultural sector.
China’s Growing Demand for Agricultural Products
China’s rapid economic expansion over the past few decades has cemented its position as the world’s second-largest economy. This growth has brought with it an immense demand for agricultural products, both to feed its population of over 1.4 billion and to support its diverse industrial needs. China’s agricultural import needs encompass grains, oilseeds, meats, and other foodstuffs, creating a substantial market for exporting countries.
For Zambia, a country with rich arable land and a significant portion of its population engaged in agriculture, this represents an unparalleled opportunity. Soybeans, in particular, are in high demand in China, driven by their use in animal feed and as a source of oil. By signing a protocol for Zambian soybeans, China has opened the door for increased trade and cooperation, which could pave the way for broader agricultural exports.
Zero-Tariff Policy: A Game-Changer for African Exports
China’s decision to extend zero-tariff treatment to 100 percent of tariff lines for all African countries with diplomatic relations is a landmark shift. This policy removes one of the major barriers to international trade—tariffs—thereby making African agricultural products more competitive in the Chinese market.
For Zambia, this zero-tariff policy can be transformative. By eliminating tariffs, Zambian farmers and exporters can now access the Chinese market on a level playing field with other global competitors. This enhanced access could lead to increased exports, generating higher revenues and stimulating growth in the agricultural sector. Additionally, this would contribute to the diversification of Zambia’s export base, reducing its reliance on traditional exports like copper and bolstering foreign exchange earnings.
Economic and Social Impacts in Zambia
The benefits of agricultural cooperation with China extend beyond macroeconomic gains. Increased demand for Zambian soybeans can trigger a chain reaction of positive developments within the country:
Boost to Agricultural Production: With the promise of a vast export market, Zambian farmers are likely to increase soybean production. This could encourage the use of improved farming techniques, higher-quality seeds, and better agricultural practices to meet the standards required by international buyers.
Job Creation and Rural Development: The agricultural sector is one of the largest employers in Zambia, and scaling up production for exports can create more jobs. This job creation can be particularly impactful in rural areas, helping to reduce poverty levels and promote economic inclusivity.
Infrastructure Improvements: To support increased production and facilitate exports, investments in infrastructure such as roads, storage facilities, and processing plants may become necessary. This can enhance Zambia’s overall logistical capabilities and benefit other sectors of the economy as well.
Enhanced Foreign Exchange Stability: A more diversified export portfolio that includes significant agricultural products can help stabilize Zambia’s foreign exchange market. Revenue from soybean exports can act as a buffer against the volatility often seen in commodity-dependent economies. This, in turn, promotes macroeconomic stability, which is crucial for attracting both domestic and foreign investment.
Challenges and Considerations
While the potential benefits of China-Zambia agricultural cooperation are promising, there are challenges and considerations that need to be addressed to maximize the partnership’s success.
Quality and Standards Compliance: The Chinese market has stringent quality and safety standards for imported agricultural products. Zambian farmers and exporters must ensure that their products meet these standards consistently. This may require investments in training, certification, and quality control mechanisms.
Sustainable Farming Practices: Increased agricultural production must be balanced with sustainable practices to avoid overexploitation of land and resources. Encouraging eco-friendly farming methods can help maintain soil fertility and support long-term productivity.
Logistics and Supply Chain Efficiency: To successfully tap into the Chinese market, Zambia will need efficient logistics and supply chain management. This includes ensuring that transportation routes are reliable and that there are adequate facilities for storage and shipment.
Market Competition: Zambia is not the only country eyeing the lucrative Chinese market. Competing with other soybean-exporting nations such as Brazil, the United States, and Argentina will require strategic positioning, branding, and consistent product quality.
To fully harness the potential of this agricultural cooperation, Zambia should adopt a multi-faceted approach:
Government Support and Policies: The Zambian government should continue to support farmers through subsidies, access to financing, and training programs that enable them to scale up production and meet export standards.
Public-Private Partnerships: Collaborations between the government, private sector, and international organizations can facilitate knowledge sharing, innovation, and infrastructure development.
Focus on Value Addition: Beyond exporting raw soybeans, Zambia could benefit from processing soybeans into products such as soybean oil or animal feed. Value addition would increase revenue and create more jobs within the country.
The agricultural cooperation agreements signed during the FOCAC summit represent a strategic opportunity for Zambia. The protocol for Zambian soybeans could serve as a foundation for expanded trade relations, benefiting farmers, bolstering the economy, and fostering job creation. However, realizing these gains will require concerted efforts from both the public and private sectors to overcome challenges and position Zambia as a reliable and competitive player in the global agricultural market.
China’s open-door policy to African agricultural products, exemplified by the zero-tariff treatment, has laid the groundwork for a potentially prosperous partnership. If managed well, this cooperation could usher in a new era of economic diversification and growth for Zambia, contributing to its vision of a more resilient and prosperous future.
