Commercial Agriculture

Manica Province

Mozambique

CompetitiveCan Mozambique be

Competitive Regionally and Globally ?

500485460450345

255

305

215

178 200

476520

500485

210

230225

581

700

650

595

0

100

200

300

400

500

600

700

800

2001 2002 2003 2004 2005 2006 2007est.

Year

US$/

Tonn

e N.P.K

A.N

Urea

Fertilizer Prices

0.52

1.25

1.15

10.97

0.40.49

0

0.2

0.4

0.6

0.8

1

1.2

1.4

2001 2002 2003 2004 2005 2006 2007est.

Year

US$/

litre

Diesel Prices

543,000

695,000718,500

805,500

1,177,000

1,024,000

918,500

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

2001 2002 2003 2004 2005 2006 2007est.

Year

Mts

/mon

th

Minimum Wage

861,673

543,000

1,177,000

1,024,000918,500

805,500718,500695,000

586,440633,355

797,845738,746

684,024

0

200000

400000

600000

800000

1000000

1200000

1400000

2001 2002 2003 2004 2005 2006 2007est.

Year

Met

icai

s

Mts/Mth

Inflation Line

Labour Costs vs. Inflation

Costs Affecting Competitiveness

• Theft of Goods with Very poor assistance from the Police & No Follow Ups.

• Poor EDM supply causing loss of electrical goods and costs of downtime.

• Beauracracy tying up the management of the business.(e.g :Made in Mozambique ; Licenses ; Fuel assistance for Agriculture)

Costs Affecting our Competitiveness

• Accounting system and advice on IVA and the quality of “Accountants” causes huge losses.

• The Biggest Unknown cost is FINES,Companies are terrified of fines.Mozambique's punitive methods need to be changed to educative immediately to give investors confidence.These Fines also encourage CORRUPTION.

• Illegal Land occupation affects crop rotations,disease control,soil conservation,seed production etc. etc. etc.

Costs Affecting Competitiveness

• Duties on Agricultural Inputs + Transport.

• EDM some bills have reached US$1,00 per Kw/Hr.

• Chemicals ever increasing prices due to registration and duties etc.

• Seed has to be imported at a huge cost.

• IVA on Agricultural products.

Costs Affecting our Competitiveness

• Labour disputes being entertained by courts when they have clearly NO CASE and the employer incurs all the costs even if he wins or is in the right.Again this uses up endless hours of valuable management time.

EQUALITYDouble Standards

• There appears to be two sets of rule books.

• A foreign or national Investor appears to have different legislation applicable to him compared with the general population as they are assumed to have money and therefore officials will believe they are able to pay bribes or the fines.=EXTORTION.

• All these costs need to be accounted for and end up being added to overhead costs.

• This seriously Increases our Production Costs and eventually drives us out of the market as is the current case.

• You will not see fines and inefficiencies being quoted in the overhead column in many Other countries that we have to compete against globally.

Accountability

• Police• EDM• Police Transito• All Public Services &

Departments.• DPADR & DSPGC

Report Numbers Follow Up Information. Fines Contested. Deadlines Set.if Not met

goes to Superior. Discipline of staff. Follow the law and

remove illegal settlements.

CAN MOZAMBIQUE BE COMPETITIVE

IN THE REGION OR IN THE REST OF THE WORLD ?

THE ANSWER IS THE ANSWER IS

YESYES,PROVIDING,PROVIDING URGENT ATTENTION! URGENT ATTENTION!

AND IMMEDIATE AND IMMEDIATE ACTIONS TAKE PLACE ACTIONS TAKE PLACE

ON THE POINTS ON THE POINTS MENTIONED IN THIS MENTIONED IN THIS

PRESENTATION !PRESENTATION !

What needs to be done!!

Reduce Taxes/Duties on Inputs.Remove IVA on Ag Goods & Inputs Improve Security On Farms & Police Service.Establish Research Stations(Pvt & GoM).Water Security & Irrigation.Agricultural Finance,Land Bank.Remove Fines & Offer Educative Advice.Ensure Land Rights Are Respected.Reduce Diesel fuel costs further to AgricultureRemove Potencia on EDM for Agriculture.

17

8

24

10

34

29

16

0

5

10

15

20

25

30

35

40

2001 2002 2003 2004 2005 2006 2007est

Year

No

of F

arm

s

Investor Farms

202

845

1514

1650

280

140

00

200

400

600

800

1000

1200

1400

1600

1800

2001 2002 2003 2004 2005 2006 2007est

Year

Ha's

Tobacco Grown

12

128

0

30

0

313

340

0

50

100

150

200

250

300

350

400

2001 2002 2003 2004 2005 2006 2007est

Year

Ha's

Paprika Grown

16

135

315

85

0

70

00

50

100

150

200

250

300

350

2001 2002 2003 2004 2005 2006 2007est

Year

Ha's

Beans Grown

243

50

900

638

485 490

700

100

200

300

400

500

600

700

800

900

1000

2001 2002 2003 2004 2005 2006 2007est

Year

Ha's

Maize Grown

1412

3178

1095

50

210

2415

461

0

500

1000

1500

2000

2500

3000

3500

2001 2002 2003 2004 2005 2006 2007est

Year

Area

in H

a's

Total Crops Grown

3,516,225 3,391,900

20,250731,950

8,807,250

6,857,500

873,895-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

10,000,000

2001 2002 2003 2004 2005 2006 2007est

Year

US$

Crop Sales

2245

2611

885

4385 4345

600

350

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

2001 2002 2003 2004 2005 2006 2007est

Jobs

No

Of J

obs

Employment

278,456

1,866,612

1,077,600

1,641,744

844,397

285,228

184,8000

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

2001 2002 2003 2004 2005 2006 2007est

Year

US$

per

Ann

umAnnual

Salaries Paid

758732

691654

366

422 476

0

100

200

300

400

500

600

700

800

2001 2002 2003 2004 2005 2006 2007est.

Year

US$/

Ha

Maize Production Costs

16451906

2201

2614

2964

33143480

1734

19862256

36203479

31702933

0

500

1000

1500

2000

2500

3000

3500

4000

2001 2002 2003 2004 2005 2006 2007est.

Year

US$/

Ha Tobaco

Paprika

Production Costs/Ha

1.3

1.75

1

1.3

1.7

1.5 1.45

1.32

1.91.8

1.5

0.951

1.35

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

2001 2002 2003 2004 2005 2006 2007est.

Year

US$/

Kg Tobacco

Paprika

Sales Prices

6.36.1

5.85.5

3.1

3.54.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2001 2002 2003 2004 2005 2006 2007est.

Year

Tonn

es/H

a

Maize Yield to Break Even

2.65

0.97

1.27

3.48

2.26

1.98

1.52

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

2001 2002 2003 2004 2005 2006 2007est.

Year

Tonn

es/H

a

Tobacco Yield to Break Even

1.73

3.29

2.26

0.91

1.07

2.90

1.22

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

2001 2002 2003 2004 2005 2006 2007est.

Year

Tonn

es/H

a

Paprika Yield to Break Even

OBRIGADO

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