Sudan

Poverty Reduction & Programs in Agriculture

Report Prepared for the Food and Agriculture Organization (FAO) in Khartoum

By

Abdelrazig Elbashir Fatih Ali Siddig Abdelatif Ijaimi Hassan M. Nour

March, 2004

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PREFACE

This report is supported by the Food and Agriculture Organization (FAO) as a contribution to the Interim – Poverty Reduction Strategy Paper (2004-2006) which is being prepared by the Ministry of Finance and National Economy in collaboration with line ministries, government institutions and the civil society. The report draws on a previous study-Agriculture and Rural Development-prepared for the government of Sudan and UNDP office in Khartoum by Abdellatif Ijaimi, Abdelrazig el Bashir, El Fatih Ali Sidig, Hassan Mohamed Nour and Jack van Holst Pellekaan (February 24, 2003).

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Table of Contents

Summary and Conclusion ……………………………………………………..(i)1. Introduction ………………………………………………………………….12. Farming Systems …………………………………………………………….13. liberalization Policies & Agriculture ……………………………………….24. Performance of the sub-sectors ……………………………………… ……34.1 Traditional ……………………………………………………………… ……44.2 Semi-mechanized ……………………………………………………………..54.3 Irrigation ………………………………………………………………………54.4 Livestock ……………………………………………………………………...74.5 Fisheries ……………………………………………………………………..104.6 Forestry ……………………………………………………….……………..105. Root causes of Poverty & Agriculture …………………………………….116. Strategy for Developing the Agriculture Sector ………………………….126.1 The 25 years Vision ………………………………………………………….126.2 Elements of the Medium Term Strategy …………………………………….136.3 Interventions …………………………………………………………………13

Land tenure & land policy …………………………………………………...13Agricultural Research ………………………………………………………..15 Technology & Extension …………………………………………………….16Agricultural Credit …………………………………………………………..17Marketing ……………………………………………………………………18Livestock …………………………………………………………………….20Irrigated sub-sector ……………………. …………………………………....21

7. Enabling Environment ……………………………………………………..217.1 Enhancing Management of Natural Resources ……………………………...217.2 Delivery system ……………………………………………………………...22 7.3 Participation …………………………………………………………………227.4 Public Investments …………………………………………………………..23

Figures Figure 1: Trends in yields of Rainfed Sorghum in Semi-Mechanized & Traditional areas…………………………………………….4Figure 2: Trends in rainfed sorghum area harvested in semi-mechanized and traditional areas …………………………...4Figure 3: Trends in irrigated wheat and cotton area harvested …………………...5Figure 4: Trends in yields for irrigated wheat & cotton …………………………..6

Tables Table 1: Growth Rates and GDP shares of sub-sectors …………………………...3Table 2: Livestock exports (in 000, heads) for the period 1996-2002 ……………8Table 3: Credit Ratio to GDP in selected Asian and Arab Countries …………...18Table 4: Annual Disbursements by the Agricultural Bank of Sudan in Main Farming Systems (2000-2004) …………………………18

Annexes: Annex 1: Policy Matrix Annex 2: Public Investments

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SUMMARY AND CONCLUSIONS

1. This report which is supported by the FAO reviews the role of the agricultural sector in reducing the considerable rural poverty in Sudan. It has been prepared as a contribution to the Interim-Poverty Reduction Strategy Paper which is being prepared in collaboration with line ministries and government institutions by the federal Ministry of Finance and National Economy.

2. Poverty in Sudan is closely associated with agriculture. Poverty is mainly prevaillent in rural areas where agriculture dominates the livelihood of the people in those areas, who constitute about 40% of the population. An effective poverty reduction strategy will necessarily entail revamping the basic approach to agriculture development.

3. Agriculture faces several constraints. Fluctuating performance of the agriculture sub-sectors characterized by declining yields in which is a result of weak technology and support services, an outdated land policy which makes market-based rural reconstruction, an inefficient credit system, lack of infrastructure particularly in rural areas, weak delivery of basic social services, government interference in the export marketing of livestock and gum arabic, and inefficient and centrally-managed irrigation schemes.

4. On the other hand, positive aspects of the agricultural sector are highlighted. Performance of sesame and livestock production and exports was strong despite the weak distribution of the benefits of livestock growth to small-scale producers and the poor. It is also apparent that the government is serious about institutional and management reform in the irrigation sub-sector. Government interference in the market for agricultural products and inputs is currently minimal, except for gum Arabic and livestock exports.

5. Indeed a number of substantial and far-reaching reforms are needed before the agricultural sector can generate better results such as improved productivity and a higher and sustained per capita GDP growth rate. This is particularly true in the traditional rainfed farming sector which should be a particular focus for the I-PRSP because this is where most of Sudan’s poor are located.

6. If the constraints facing agriculture are removed, then Sudan’s agricultural sector will be positioned for strong, sustained growth which will generate incomes and employment which in turn will reduce poverty.

7. The government’s Five-Year Plan (2004-2008) prepared by Ministry of Agriculture provides the context and the basis for the comprehensive approach to the challenges of agriculture with the objective of sustaining growth and reducing poverty. In brief the Five-Year Plan’s main policy objectives are (a) public investment in infrastructure such as rural roads and electronic communications; (b) focus on small-scale farmers in rainfed farming areas; (c) crop insurance programs; (d) research; (e)

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institutional reforms such as land policy; (f) increased role of the private sector in areas such as marketing; (g) participation of producers in policy making.

8. The medium term strategy (2004-2006) calls for reviving agricultural development, however with significant shift in emphasis and policies in favor of traditional agriculture. The basic elements of the strategy will be:

Intervention in traditional agriculture, the focal sub-sector, will be based on a comprehensive integrated package of rural development programs. The main elements of the strategy will be: (i) Land tenure reform (ii) a technological package (research and extension) (iii) access to rural credit (iv) provision of basic social services including basic education, primary health care, water and sanitation (v) improvement of access to markets through investment in basic infrastructure particularly feeder roads, and abolishing marketing monopolies.

Extensive institutional and management reforms will be undertaken in large

irrigated schemes which are a major shift from the existing policy of financially subsidizing these inefficient schemes from budgetary resources. These reforms will not only revitalize production and productivity in the irrigated schemes, but will also release funds needed for the rural programs in traditional agriculture.

Land tenure reform and appropriate policies for sustained natural resource management will be the main elements of the strategy for the semi-mechanized agriculture.

A series of comprehensive policy matrices or frameworks have been prepared which provide a logical and monitorable relationship between objectives, outcomes and policies. Domestic resources and external assistance that are needed to achieve the medium term outcomes are proposed in this report.

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Poverty Reduction Strategy & Programmes in Agriculture

1. Introduction:

1. The agricultural sector is the core of Sudan life and the main driving force for its economy even with the emerging oil sector. Sudanese economy is predominately agricultural with 70% of the population deriving their livelihoods in rural areas. Agriculture contributes 46% of the country's GDP and more than 90% of the non-oil export earnings. In addition, it accounts for about two thirds of the employment and supplies about 60% of the raw material needed by the manufacturing sector.

2. Agriculture will continue to be the main basis for sustained future national

economic growth, increased food security, a substantial share of exports, and increased employment. A fundamental approach to reduction of poverty and sustaining food security will rest on the government ability to develop agriculture as the main vehicle for poor growth. The agricultural sector is also envisaged to play a major role in the post-peace period by generating employment opportunities and providing food security for the war affected populations.

3. Apart from its size, Sudanese agriculture is also very diverse and complex because of the range of agro-climatic environments under which it operates. Therefore, a wide range of policies, institutions and infrastructure will be needed for the sector to generate growth and achieve the poverty reduction objective. The sector's diversity is reflected in the different performance results from the major sub-sectors over the last 10 years. These sub-sectors face different problems, have substantially different prospects and make different contributions to poverty reduction.

2. Farming Systems:

4. Farming systems in the Sudan are functions of ecological zones and socio-economic conditions. Crop production is practised under three main farming systems, namely irrigated, semi-mechanized and traditional. The other farming systems are livestock, fishery and forestry.

5. Historically, large scale Nile based irrigation scheme had been one of the pillars of the Sudan's Strategy for agricultural development. There are between 4 and 5 million feddan of irrigated land within the Nile basin, in Northern, Khartoum, Gezira, Sennar, Blue Nile and White Nile States. The Gezira Scheme (2.1 million feddan), Rahad, Suki and New Halfa, schemes (1 million feddan) are owned and managed by the Central Government.

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6. The rainfed commercial semi-mechanized system developed on generally alkaline clay soils and loams. It has spread to about 14 million feddans in the states of El Gadaref, Blue Nile, Upper Nile, White Nile, Sennar and Southern Kordofan.

7. The rainfed traditional farming is mainly subsistence systems prevalent almost every where in the Sudan accounting for an area of 22 million feddan and from which the majority of the rural people derive their livelihood, but mostly in Kordofan, Darfur, White Nile and Blue Nile states.

8. Cattle, goats, sheep and camels (about 130 million heads) constitute the bulk of the livestock sector. Livestock in the Sudan could be classified into extensive, semi-intensive, and intensive systems depending on types of animals reared and whether for subsistence, traction or market. The extensive system is entirely dependent on natural pasture and is physically, socially and economically fragile. The system accommodates the vast majority of herders in the dry lands of the country. Unlike the extensive system, the intensive system requires considerable skills, efficient management and a great deal of animal feeds. It is common in the irrigated and urban areas. The semi-intensive lies between the two systems cited above. Pastoralism supports the largest number of people (70% of the rural population are agropastoralists).

9. Forests and woodlands are typically tall shrubs in areas of low rainfall in the north, and tropical high forests in the south. Thirty-five percent of the land in Sudan is classified as forest, of which one-quarter represents timber resources and 3 percent are forest reserves. There are also some plantation forests and community woodlots.

10. The fishery resource potential is significant, though there is no reliable quantitative information. There are five main fishery sites concentrated around the Red Sea area, Lake Nuba, White Nile and Blue Nile, swamps, marshes, lakes of southern Sudan; and canals of the Gezira irrigation scheme.

3. Liberalization Policies and Agriculture

11. The Sudanese economy was characterized by negative growth rates, internal and external imbalances, during the 70s and 80s. These constraints prompted the government to launch a liberalization program in 1992. The implementation of this reform program succeeded in reversing the decline in economic growth and revitalized the private sector.

12. The waves of liberalization despite its positive impact on growth particularly on livestock, has negative impact on the irrigated sub-sector. The irrigated schemes were privatized without passing a transitional stage that will pave the way for active private sector involvement. When these schemes were privatized, they were faced with decayed irrigation infrastructure, withdrawal of basic agricultural services and lack of alternative source of credit.

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Figure 1: Trends in Yields of Rainfed Sorghum in Semi-Mechanized and Traditional Areas

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1970/71

1973/74

1976/77

1979/80

1982/83

1985/86

1988/89

1991/92

1994/95

1997/98

2000/2001

tons

/ha

Semi-Mechanized Traditional

13. The liberalization programs were accompanied by massive monetary expansion, which resulted in triple digit inflation by 1996. A subsequent reform package to address the economic instability was launched in mid 1996. The restoration of macro-stability was successful and inflation was reduced, the exchange rate has been stabilized and the economy continued to record positive growth rates.

14. However, the burden of the stabilization fell on the budget control with large cuts in expenditures. The situation was exacerbated by low revenue efforts particularly when oil started to constitute a major source of revenues. Moreover, the war and deteriorating security situation in some parts of the country claimed more resources. As a result the agriculture sector was deprived from needed resources.

4. Performance of the Sub-Sectors

15. The relative importance of the major sub-sectors, along with their 10-year average growth rates, is shown in Table 1. Of the three main farming systems, irrigated agriculture accounted for an average of 21.1 percent of the value of total agricultural production between 1991 and 1999 and growing at an average rate of 6.6 percent per annum; semi-mechanized rainfed agriculture accounted for 6.3 percent, declining in terms of value of production at 6.7 percent per annum; and traditional rainfed agriculture accounted for 12.5 percent of GDP but grew at 24.6 percent per annum. From 1991 to 1999, the average value of livestock production accounted for 47.0 percent of the total value of agricultural production and grew at 15.9 percent per annum.

Table 1: Growth Rates and GDP Shares for Sub-sectors in Agriculture (1981/82-1999)

1981/82-1990/91 1991/92-1999Item Growth Rate Share of GDP

within AgricultureGrowth Rate Share of GDP within

Agriculture(percent per annum) (percent) (percent per annum (percent)

Irrigated crops 1.5 25.8 6.6 21.1Rainfed semi-mechanized crops

-9.2 8.1 –6.7 6.3

Rainfed traditional crops -8.4 10.0 24.6 12.5

Minor crops 1.2 1.1 -1.4 1.2

By-products 7.5 6.8 2.4 5.9

Total crops -0.8 51.8 8.5 47.0Livestock 2.0 36.9 15.9 46.9

Forestry 0.7 9.9 –21.5 4.8

Fisheries 1.0 1.4 9.0 1.3

Total 0.6 100.0 10.8 100.0

Source: Central Bureau of Statistics; Note: The years 1983-1985 and 1990/91 were drought years

4.1Traditional.

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Figure 2: Trends in Rainfed Sorghum Area Harvested in Semi-Mechanized and Traditional Areas

0500

1,0001,5002,0002,5003,0003,5004,0004,500

'000

hec

tare

s

Semi-mechanized Traditional

16. In summary crops make up about 47 percent of the sector’s GDP and livestock account for about 47 percent. GDP from crops and livestock fluctuate considerably. The available evidence suggests that GDP growth in agriculture has been mainly based on increases in area cultivated in rainfed farming areas which have threatened the environment, while yields have declined on a long-term basis (see Figure 1). In essence there has been an unsustainable increase in area harvested (see Figure 2) and a decline in productivity for more than two decades.1

17. Comparing average productivity of the main cultivated crops (sorghum, millet, sesame and groundnut) in the traditional rain-fed sector for the period 1992/93-2002/2003 with the respective productivity for the period 1970/71-1980/81, and assuming constant prices; the farmer should have increased his cultivated area by 75% to maintain the same level of 1970/71 income.

18. If the recent tendency of horizontal expansion in area of sorghum continues it is likely to have serious consequences for the sustainability of the crop yields in the traditional farming systems, farm incomes, and poverty reduction. It is particularly alarming for the poor because, even during years of high output from crops and livestock, the traditional farming areas produce a lower proportion of rural GDP than the proportion of the rural population that lives there.

19. Obviously families living in the traditional farming areas find employment as causal labor for short periods outside this region, but it is well known that those employment opportunities have weakened over the last 10 to 15 years. The

1 See Bank Report No. 6502-SU, Sudan: A Strategy for Rainfed Farming – A Commentary on the Government Steering Committee Report, April 28, 1987. This report indicated that of Sudan’s total area of about 2.5 million square kilometers, 35.4 percent was suitable for agriculture, with around 3.3 percent cultivated at any one time (the remainder would be out of use or fallow); 10.1 percent was pasture; 38.5 percent was forest and scrub; and 16.0 percent was not usable for agriculture, grazing or forestry. There have no doubt been changes in these proportions since 1975. For example, there can be little doubt that the area under cultivation has probably doubled since 1975.

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Figure 3: Trends in Irrigated Wheat and Cotton Area Harvested

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100150

200250300

350400

450500

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hec

tare

Wheat Cotton

traditional rain-fed sector obtained only between 1 and 5 percent of all formal agricultural credit in 2001 and received few other support services such as research and extension. Public investments in basic infrastructure for rural and agricultural development are also negligible. It is not surprising that yields are low and declining or stagnating for most crops. The pastoralists and small farmers in the traditional sector are the most vulnerable to poverty. Improved productivity in the traditional farming areas, is therefore of crucial importance if the large number of people who are to some extent dependent on this farming system are to achieve improved incomes.

4-2 Semi-mechanized:

20. The decline in GDP from semi-mechanized farming of 6.7 percent per annum up to 1999 is broadly consistent with the trends in production. The slump has had serious repercussions for employment of labor – mainly from the traditional farming areas. In the eighties some 1 to 2 million laborers moved to the semi-mechanized farming areas where they could find three to four months work at weeding and harvest time. This number has been cut by at least half as a result of the decline in the semi-mechanized farming areas and the substantial cut in cotton crop irrigated areas with drastic implications for many families in the traditional rainfed farming areas who depended on the employment in this sub-sector.

21. Matters could get worse if the current trend toward a decline in the domestic and international demand for sorghum continues and there is no diversification to other crops in the semi-mechanized areas. Absence of appropriate land tenure policies and environmental considerations are among the main constrains facing this sub-sector.

4.3 Irrigated.

22. Wheat, cotton and sorghum were the most important crops in irrigation areas during the nineties, with groundnuts as a fourth crop. The poor performance of irrigation schemes during the nineties had a grim impact on the employment and welfare of farmers and many landless laborers living in the irrigation schemes. Reductions in the areas of the traditional crops led to opportunities for other crops such as vegetables, and a substantial increase in the production of livestock. This diversification was important but did not reduce the need for substantial reforms

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Fiigure 4: Trends in Yields for Irrigated Wheat and Cotton

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0.50

1.00

1.50

2.00

2.50

3.00

ton/

hect

are

Wheat Cotton

in the management of these large schemes such as the Gezira irrigation scheme which has a command area of about 2.1 million feddan.

23. Figure 3 shows that the area of irrigated wheat also fluctuated substantially between the mid-1980s and the end of the 1990s. The main reasons were considerable pressures on the central government-owned and operated irrigation schemes to increase grain production from 1990 to 1992. The central government requested irrigation schemes to increase the production of wheat and sorghum as a contribution to the government’s food security initiative, which had been introduced because of concerns about the impact of drought on rainfed sorghum production.

24. Farmers were strongly encouraged, and assisted through credit programs, to produce wheat. With these inducements, the area of wheat increased sharply in 1990/1991 because of the strong commitment of the Government to stimulate production using two main policies, namely (a) declaring an attractive price before planting time at which the Government would purchase production; and (b) providing inputs for wheat production. Wheat production declined steadily after 91/92 because the government abandoned its efforts to stimulate an increase in grain production as part of its food security strategy. In subsequent years reduced credit for wheat production led to reductions in the area planted. Figure 4 shows that yields for wheat fluctuated considerably throughout the eighties and nineties and production followed a similar trend, increasing on average at about 3 percent per annum. Figure 3 also shows that the cotton area planted declined steadily which reflected the declining efficiency of cotton production in central government irrigation schemes due to the ineffectiveness of inefficient, inflexible top down management of the large government-owned irrigation schemes which consequently incurred considerable losses. As the area of irrigated cotton declined it was replaced by a rise in the area of irrigated sorghum until the early nineties when this area slumped to about the same level as in the late 1980s.

25. Large scale irrigation schemes have not been financially sustainable and therefore have needed subsidies through the federal budget as well as government guarantees for obtaining credit from commercial banks. Efforts to control the

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production practices, including crop choice for farmers, have resulted in decisions by farmers to produce crops less susceptible to control by management of the schemes. Performance problems in irrigation schemes include inefficient water management, non-collection of water charges and land use fees, low productivity, and large debt burdens. Government support to these large-scale subsidized schemes starved other sub-sectors in agriculture of funds needed for basic infrastructure development and support services. Government could eliminate its budgetary allocations to irrigated agriculture if it adopted a forward-looking reform program based on more efficient management and greater private sector involvement in the federally owned irrigation schemes.

4.4 Livestock.

26. While crops are important for Sudan’s food security, the value of livestock production dominates the agricultural sector accounting for about 47 percent of GDP from agriculture which is an enormous leap compared with the eighties.

27. The growth of this sub-sector has been remarkable, although much of this growth is due to a rebound from low growth rates during the eighties when droughts caused devastating losses. Livestock production has always been an integrated part of traditional rainfed farming and is making and increasing contribution to the welfare of this farming system as a whole.

28. Total livestock production increased rapidly during the 1990s. For example, the off-take of sheep quadrupled between 1989/1990 and 1999/2000 in response to a strong export market in the Gulf countries, especially Saudi Arabia, until veterinary authorities in Saudi Arabia banned the import of sheep from eight African countries in September 2000 due to the outbreak of Rift Valley Fever in the southern part of the Kingdom and brought a temporary halt to the boom during 2000-2001. Table 2 shows the trend in livestock exports since 1996, including the slump in sheep exports in 2000 and 2001. Exports of sheep rebounded significantly in 2002 following the resolution of the veterinary problems in Saudi Arabia, but potential risks to Sudan’s live sheep exports will remain.

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Table 2: Livestock Exports( in 000, heads) for the period 1996-2002

Year Cattle Sheep Goats Camels Meat (tons)

1996 3.6 1001.7 30.3 72.1 -1997 3.5 1074.6 16.8 77.4 125921998 3.6 1586.2 48.9 131.8 163631999 0.4 1616.4 40.5 159.4 97682000 0.3 731.2 16.6 132.0 88292001 * 15.4 13.9 185.5 66182002 2.7 1602.6 53.2 155.7 7821

Source: Quarantine and Meat Hygiene, Ministry of Animal Resources and Fisheries

29. Several constrains deprive the country from realizing the full potential of this sub-sector.

30. Grasslands which make the major source of the animal feed, lack system of grazing entitlement. Being communal, they suffer deterioration, poor attention and invasion by expanding crop farming. The historic customary livestock corridors between dry and wet season grazing lands are often blocked by crop farming resulting in conflicts between herders and crop farmers. Local authorities in which rangelands organization, management and rehabilitation is vested, are short of funds and the stakeholders lack the necessary awareness for resource management.

31. Water supply during the dry season is a nightmare to herdsmen in most arid areas. It consumes time, effort and a considerable portion of their annual incomes. Some able herders tend to trek their herds for long distances to where water is available. Others transport water by trucks to where pasture is abundant and even others build cemented earth tanks for the collection and storage of rain water. Poor herders suffer from water supply shortage since they lack mobility. Prolonged watering intervals constitute a survival strategy. The practice often leads to animal dehydration, haemoconcentration, weakness and eventual death. Lucky animals if survived the stage, will suffer from emaciation, stunted growth and abortions.

32. Herders have no access to capital. The only assets they have are their animals. In case of calamities (drought, famine, flood, sweeping epidemics etc.) losses tend to be high and most households fall in destitution as a consequence. To overcome the problem, herders resort either to settled crop farming or move elsewhere especially to urban centers.

33. Herd rebuilding in the absence of credit is a long process if we recall that under normal pastoral conditions, a 1000 kg livestock biomass is required to support one

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person who depends on the consumption of animal products over long time (EMASAR) or 500 kg if he exchanges animal products for grain.

34. Animal health services are integral part of any feasible livestock development program. They are of two types: those provided by the public sector and those provided by the private sector. Those operated by the public sector focus mainly on disease control measures through annual vaccination campaigns. They target epidemics of sweeping nature and the diseases that have regional dimensions besides those which impede access to international markets (Rinderpest and Contagious Bovine Pleuropneumonia in cattle for example). Poor herders if they have any animals, they would be small ruminants, donkeys and the domestic fowl. Diseases like peste de petits ruminants, sheep pox, lamb dysentery contagious caprine pleuropnumonia (CCPP) and brucellosis in addition to equine and poultry diseases which affect the stock of the poor, fall outside the attention of the vaccination campaigns.

35. The private sector in its provision of animal health services focuses mainly on drug supply and distribution. The high costs of drugs put the service out of the reach of poor herders. Veterinary practitioners whether in the private or public domain lack the necessary equipment and tools to carry out their profession properly. For the above stated reasons, poor herders often seek animal medication in ethno-veterinary practices.

36. Animal health research is another services provided for livestock by the public sector. Research findings have no impact on poor herders whatsoever. The meager budgetary allocations restrict research priority to diseases of greater economic impact and to those which hinder trade. The role of poor herders in expanding production and consequently trade is seen as negligible. Coordination of livestock and agriculture research is lacking.

37. Dairy potential of the domestic breeds is generally low, nevertheless milk is abundant during the rainy season and the appropriate means of its harvest is lacking. Production could be improved with Artificial Insemination (A.I) technology. A.I when available, is accessible only to rich producers under the intensive system of production. Natural mating with traditionally selected males is the alternative choice for the majority of producers under the extensive system. It is associated with many problems of which brucellosis transmission is signed out as a real risk that entails great economic losses.

38. Livestock marketing is arranged traditionally. The markets are short of infrastructure and lack organization and development. The long chain of middlemen together with uncountable levies and taxis imposed on by the local authorities erode most of the producers’ market share. The recent monopolistic approach as a policy for the livestock export is expected to have far reaching effects on herders.

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39. Extension system is not effective in conveying new knowledge to producers and suffers low priority in the agenda of policy-makers. It is down graded in budgetary allocations, staff training and capacity building and its overall role in inducing change. Moreover, it lacks the effective linkages with research institutions.

4.5 Fisheries:

40. Sudan is endowed with inland and marine fisheries resources. The potential sustainable yield of fin fish is estimated as 110000 tons per annum. The greatest part of it is contributed by inland waters which are effectively restricted to the 5-manmade lakes on the river Nile and its tributaries. The level of exploitation at the moment is approximately 55 percent of the estimated potential. Fresh water ponds fish culture is currently playing an insignificant role despite the availability of prerequisites for its success. By virtue of its basic characteristics, Sudan fisheries is of small scale qualified to satisfy substance and provide a good margin for investment, particularly in the area of aquaculture, off-shore fisheries, land based fisheries and supplies. The magnitude and trends of resource utilization reflect the following features and problems:

41. The civil war in the south has deprived the country of effectively utilizing the huge fish resources in the sudd region (potential 75 thousands tones/year).

42. Important fishing sites in the north are either suffering from overfishing (eg. JebalAwlia Reservior) or virtually unexploited (eg. Lake Nuba and Red Sea).No attention is duly paid to the development of culture-based fisheries in the numerous small water bodies (hafir) in different parts of the country to augment fish production from traditional sites and contribute to rural development. The low fin-fish production is also coined with high post harvest losses resulting from improper handling, preservation and processing. Involvement of private sector in aquaculture is presently at a very low key. Efforts are still needed to make a break through. Resources other than fin fish are either untapped or fragmentary exploit.

43. The unique and high regarded coral reefs are considered as national and international heritage which demand utmost conservation as recreational assets. The coraline fishes with their beautiful colours provide a good base for trade in ornamental fishes.

44. under funding, inadequate infrastructural facilities and limited trained and skilled manpower are major constraints facing rational management and development of fisheries resources and fishing communities.

4.6 Forestry:

45. The contribution of the remaining sub-sectors to total GDP generated in agriculture is much lower than any of the sub-sectors discussed above. At the

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same time, the value of production form some of these smaller sub-sectors such as forestry, fisheries may be under-estimated because much of it takes place in remote areas in the form of small operations.

5. Root Causes of Poverty and Agriculture

46. Information about poverty is lacking. The last household survey was conducted in 1978. Some efforts were made to bridge the gap in information, with recent surveys namely: the Safe Motherhood survey (SMS: 1999) and the Multiple Indicators Cluster Survey (MICS: 2000), to shade some lights on non-income poverty issues in Sudan. Using the indicators of these surveys namely deprivation in survival, deprivation in knowledge and minimum living standard, the results have show, that poverty is prevalent all over the country, with higher percentage in rural areas compared to urban areas.

47. Several factors have contributed to the high incidence of poverty, but the major

factors were the ill-conceived development policies followed since independence, which have neglected rural development from which the majority of population derive their livelihood, the civil war, and natural disasters (drought).

48. Development policies were concentrated on irrigated agriculture which was supplied with most of the services such as stable irrigation, research, extension, credit, and other infrastructure (rails and roads). Traditional agriculture was neglected receiving no research services and limited extension, credit, infrastructure, basic social services in the form of education, primary health care, and safe water supply. This situation was aggravated by marketing monopolies and absence of any land reform. Previous efforts of tackling traditional agriculture challenge through rural development projects have failed to realize the production potential in traditional agriculture. These projects which were mostly funded by foreign donors proved to be unsustainable and have collapsed after withdrawal of foreign funding. The initial designs of these programmes were based on top-down arrangements, neglecting empowerment of rural population and were not carried within a holistic approach to rural development.

49. Negligence of traditional agriculture has caused massive migration from rural

areas to urban centers especially to Khartoum. The collapse of irrigated agriculture and deterioration in semi-mechanized agriculture, which used to provide employment for about over a million labors in traditional agriculture, has negatively affected rural population. Most of rural migrants are ill-suited for urban life and lack skills for urban employment.

50. This process was further compounded by the civil war. The war has claimed substantial resources which could have been utilized in the development of

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agriculture and other social services. It has also limited the access to land and assets leading to loss of production and incomes.

51. The prevalence of drought cycles in the absence of a coherent food security intervention has resulted in the quick exhaustion of traditional farming coping mechanisms and consequently massive migration.

52. Apparently without reorientation of agricultural development strategies, the root causes of poverty will continue to prevail. A poverty alleviation program was launched in 1992 as part of the 10-years Comprehensive National Strategy (1992-2002). However, these efforts were partial as they address the issue of poverty in the absence of a comprehensive framework. Serious efforts are now being undertaken to address poverty in the country in a comprehensive manner. The government has launched the Interim Poverty Reduction Strategy Paper (2004-2006) as commitment to seriously address the poverty problem of the country in a sustained manner. This paper represents a contribution in this direction.

6. Strategy for Developing the Agricultural Sector

6.1 The 25 Years Vision:

53. Agriculture will continue to be the main source of sustained growth. Despite the positive impacts of the macroeconomic reforms pursued since 1992, there remain substantial inefficiencies in agriculture production and marketing which will be addressed by the strategy.

54. The overall theme for agriculture development is contained in the vision for the “Strategic Quarter-Centennial Plan” (25-Year Plan) prepared by the government to achieve faster rural development. It makes a commitment “to stir and trigger rural development so as to give rise to rural communities in which all services are provided: fresh water, technical education, health care, electricity, fossil fuel and renewable sources of energy and other development projects with fair and just distribution between all regions, cultures and ethnic groups.”

55. The Plan addresses five constraints facing the sector in the medium term, namely (a) low and declining productivity; (b) recurrent drought; (c) inadequate infrastructure; (d) trade constraints; (e) weak institutional capacity; and (f) low private investment. It also suggests that the main policy for resolving these constraints should be through broad framework for growth in the agricultural sector based on the following actions (a) a new land law that provides for, among other things, long term leases with land use conditions, tradability of leases, and a reduction in the number of the size of very large farms in the semi-mechanized areas; (b) more relevant and effective agricultural research and extension; (c) improved financial services in rural areas; (d) programs to improve marketing of agricultural and livestock products such as wheat, oilseeds and milk; (e) maintenance of a strategic reserve to enhance national food security; (f)

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investments to improve domestic water supplies in rural areas; (g) and programs to improve the welfare of families in the traditional rainfed farming areas; (h) efficient use of water for irrigation; (i) combating desertification by rehabilitating vegetation cover through upgrading of pastures, rehabilitation of forests, reafforestation, and the promotion of agro-forestry.

6.2 Elements of the Medium Term Poverty Reduction Strategy in the Agricultural Sector:

56. Previous experience of looking at agriculture as a source of growth only will be revisited where the medium-terms strategy will focus on agriculture as a source of poverty-reduction growth and food security assurance. This will entail shifting emphasis not only between agriculture and other sectors but within agriculture sub-sectors. The basic elements of the medium-term strategy will be:

(1) Intervention in traditional agriculture, which will be the focal sub-sector, will be based on a comprehensive integrated package of rural development programs. The main elements of the strategy will be: (i) Land tenure reform (ii) a package of research and extension (iii) access to rural credit (iv) provision of basic social services including basic education, primary health care, water and sanitation (v) improvement of access to markets through investment in basic infrastructure particularly feeder roads, and abolishing marketing monopolies.

(2) Extensive institutional and management reforms will be undertaken in

large irrigated schemes which are a major shift from the existing policy of financially subsidizing these inefficient schemes from budgetary resources. These reforms will not only revitalize productivity and enhance farmers income in the irrigated schemes, but will also release funds needed for the rural programs in traditional agriculture.

(3) Land tenure reform and appropriate policies for sustained natural resource management will be the main elements of the strategy for the semi-mechanized agriculture.

6.3 Interventions

Land Tenure and Land Policy:

57. Sudanese land law, which is a combination of statutory law, Islamic law, Customary Law, and judge-made law, and the land policies have pervasive impacts on the development of agriculture. The most recent development in the land law, namely the Unregistered Land Law (1970), among other things, has prohibited the acquisition of any right or title on land by prescription on land registered in the name of the government. Private land was hence confined to land registered before 1970 under the 1929 land Ordinance, mainly limited to the

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agricultural land along the Nile. Development in the law has not covered southern Sudan due to the war.

58. By and large, the existing land law and land policies have the following drawbacks on agricultural development: (i) They limit access to credit. (ii) constrain sustainable and efficient use of agriculture and pastoral development, with no incentive for capital and land development, resulting in serve environmental degradation and poor yields (iii) depriving a large number of small traditional farmers from access to their land use as a result of the government policies of leasing large holdings to investors in semi-mechanized agriculture (iv) constituting a source of tension and civil conflict between settled farmers and pastoralists.

59. To resolve this issue the legal, policy and institutional environment will be reformed with the objective of providing secured tenure for farmers, reduce civil tensions, and protect small farmers against the expansion of large semi-mechanized farming. The land tenure reforms will benefit all sub-sectors of agriculture.

60. Legally, a process will be instituted to progressively develop and amend the relevant laws to incorporate customary law and practices, local heritage and international trends and practices and any other amendments to achieve the above objectives.

61. On the land policy issues and in order to address credit problems in agriculture a comprehensive land reform will be initiated in Gezira scheme to allow long term user lease which will allow tradability of land titles in irrigated agriculture. In semi-mechanized agriculture a policy of revising scheme sizes will be implemented coupled with equitable land reform which will incorporate securing and protecting the grazing rights and small producers rights as well as enforcing good practices of sustainable resource management.

62. Institutionally, a National Land Commission with independent representation, will

be established. The main function of the National Land Commission will be to arbitrate between willing contending parties on claims over land including the government; make recommendations to relevant government bodies concerning land reform policies, recognition of customary land rights and/or laws, assess land compensation, which need not be monetary, and advise different levels of government on coordination of policies on national projects. The special circumstances facing certain areas would also be addressed through specific arrangement. In Southern Sudan, a land commission will be established with the same functions of the National Land Commission at Northern Sudan government level. Both commissions will cooperate and co-ordinate their activities and in case of conflicts between the two commissions, which can not be resolved by agreement or reconciliation, the matters of conflicts will be referred to the Constitutional Court. In Southern Kordofan and Blue Nile States an agreement will be made to establish a branch of the National Land Commission with an

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added function pertaining to the rights of the branch to review previous large leases in the semi-mechanized agriculture guaranteed by the government and their impact on traditional farmers in order to address any conflict or injustice

Agricultural Research2

63. Agricultural research, which is under the responsibility of the central government, has been under-funded for decades. Currently the annual budget allocated to Agricultural Research Corporation (ARC), the Animal Resources Research Corporation (ARRC) and universities is only about 0.03 percent of GDP. This level of funding has proven to be totally inadequate for a country that is so heavily dependent on agriculture for its GDP. It is known that Sudan spends significantly less per unit of value of agricultural output on agricultural research than the average of African countries or developing countries as a group. The limited budget has resulted in a decline in staff numbers, reduced resources for funding research activities in the field, and a deterioration of the research facilities because of a lack of maintenance. Despite these difficulties, ARC still has a staff of 250 researchers and has over the last year generated some 60 new technologies. Few of these technologies and the many other technologies already “on the shelf” have been tested under field conditions. The most important challenge for Sudanese agriculture therefore is to test the currently available technology in the field and make it available in regions where it is relevant. This will be a priority action.

64. Another challenge facing research in agricultural research is the urgent need to focus on small-scale farmers. Most agricultural research programs tend to be supply driven and not based on integrated land-use management or farmers’ needs. The focus is often on high-input technologies for industrial crops, which may benefit large-scale farmers or those in irrigation schemes. Innovative, low-input technologies and farming systems, which are likely to benefit small-scale farmers in rainfed areas, have often been overlooked. For instance, research is concentrated on soil analysis and fertilizer trials, rather than on improving the productive capacity (such as yields) of existing soils in rainfed areas. There has been virtually no economic evaluation of technologies tested or developed.

65. Institutional reform in agricultural research is required. The current arrangement of fully designating agricultural and livestock research to the Ministry of Science and Technology needs to be revisited. Responsibilities of the Ministry of Science and Technology should be confined to policy coordination and frontier research,

2 Until 2001, several research institutions under different ministries administered various aspects of the national agricultural research program. The Agricultural Research Corporation (ARC), established 100 years ago is responsible for crops, forestry, and pastures. The Animal Resources Research Corporation (ARRC) deals with livestock. A number of public universities (also under the control of the central government) contribute to agricultural research. The National Research Center for Genetic Engineering is responsible for applied genetic research. The Industrial Research Center is responsible for food science and medicinal plants; and the Atomic Energy Research Center is responsible for mutation breeding and food preservation and sanitation. Under administrative reforms approved in 2001, the government relocated all research institutions into the newly established Ministry of Higher Education and Scientific Research, but stopped short of merging crop and forestry with livestock research within the new ministry. As a result ARC and ARRC are still separate entities.

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while the functional responsibility is to be designated to the relevant ministries (Agriculture and Animal Resources). Coordination between the ARC and the ARRC is weak. For instance, ARC works on quality of pastures and feed production, while ARRC works on genetic improvement and livestock health. An example of one of the missed opportunities is that ARC’s breeding program aims at achieving high quality grain in field crops, but totally overlooks the benefits to livestock production if it were to expand the research to breed for good-quality straw as well. A closer collaboration between crop and livestock research be achieved through the establishment of the National Agricultural Research Systems (NARS), an umbrella which determines research carried out by ARC, ARRC, universities and other relevant research institutes. This should lead to a more efficient use of resources, more relevant technology outcomes, increased growth and employment in the agricultural sector, and hence the real possibility of significant poverty reduction.

Technology Transfer and Extension

66. Extension is the responsibility of the individual states as part of their responsibility for agriculture and livestock services. The new national strategy for agriculture launched in 2001, and the recognition that extension is a critical factor in improving agricultural production and food security, led to the resulting of the Extension Department into a Technology Transfer and Extension Administration (TTE) which has the task of modernizing agriculture, increasing crop yields and the quality of production, improving farmers’ income, achieving sustainable use of resources and sustainable production.3 The TTE plans to establish network which administrations in the state ministries responsible for agriculture (9 of which have been already established in Southern Kordofan, West Nile and Upper Nile) and, working with the states, ARC and universities, will facilitate the transfer of technology to farmers. Several central government centers for technology transfer and 50 extension stations (with federal and state financing) connected with the government agricultural schemes (such as the large irrigation schemes) will be established. Plans are in place to have 10 Transfer and Farmers Training Centers by 2006 and to have 2000 demonstration farms. It is also planned to merge extension services for rainfed and irrigated crops.

67. TTE has four main thematic programs, namely improving crop productivity, promotion of improved seeds, integrated mechanization, and rural women development. It is worth focusing on the seeds program to demonstrate TTE’s work in facilitating the availability of an important technology for farmers. Only an estimated 10 percent of farmers use certified seeds. Improved seed technology is essential for bridging the gap between yields in demonstration trials and farmers’ fields. Until recently, seed production and certification was handled by the central government through the Seed Unit of the Extension Department in the Ministry of Agriculture and Forestry. It was an inefficient operation. Seeds were not good quality or disease free; they were also expensive. National seed

3 There is a similar body in the Ministry of Animal Resources and Fisheries called the Administration of Extension and Pastoralist Development.

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production was limited to field crops, while horticultural crop seeds were usually imported.4 In a move to improve production of good-quality seed and boost the use of improved seed, the Seed Multiplication Department in the Ministry of Agriculture and Forestry was semi-privatized in 2000 and entrusted to a new joint (public-private) ownership company. The government donated physical assets to the newly formed Arab Sudanese Seed Company representing a share of 42 percent of the company’s capital. The remainder was financed by the Arab Authority for Agricultural Investment and Development (AAAID), Al Aktan Company, and the Farmers’ Bank. Responsibility for seed certification and oversight was retained by TTE.

Agricultural Credit:

68. Lending to the agricultural sector occurs through both formal and informal credit channels. Although informal credit is an important source of finance for agriculture, because of data constraints, it was not considered in this section.

69. Lending directed specifically to the needs of the agricultural sector started with the formation of a government-owned Agricultural Bank of Sudan (ABS) in 1957. It currently has 91 branches. About 90 percent of ABS loans go to the agricultural sector which is an increase on past performance. Loans mainly finance activities in irrigated and rainfed agriculture, providing about 20 percent of farmers’ total credit demand. The other major sources of credit for the sector are the commercial banks. There are also other sources, such as the Sudan Cotton Company (SCC), which has more recently taken responsibility for the bulk purchase of inputs for cotton farmers, with guarantees from the government. Fertilizer is provided on credit to farmers through the Sudan Gezira Board.

70. In spite of the high contribution of the agricultural sector in GDP, the ratio of the formal agricultural credit to the GDP in Sudan is very meager compared with other developing countries. Table (3) shows credit ratio to GDP in Korea, Philippine, Thailand, Bangladesh, India, Pakistan, Morocco, Egypt, Tunis, Jordan, Syria, Sudan and Oman. The figures displayed in the table reveal that the ratio of credit to GDP varies between as high as 24.0% in Korea and as low as 0.3% in Sudan and Oman. With the exception of Oman, the lowest ratio (2.5%) represents more than eight folds the ratio in the Sudan. This result call for strengthening the ABS and establishing other rural credit institutions and devoting more credit to the development of agriculture.

4 Except for the traditional Mloukhieh and okra.

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Table(3) Agricultural Credit Ratio to GDP in Selected Asian and Arab Countries

Country Credit ratio to GDP(%)

Country Credit ratio to GDP (%)

Korea 24.0 Morocco 4.7Philippine 17.0 Egypt 4.7Thailand 15.0 Tunis 2.5

Bangladesh, 14.1 Jordan 2.5India 8.4 Syria, 8.0

Pakistan 4.3 Sudan 0.3Oman 0.3

Source: Ministry of Agriculture and Forestry, Committee Report, DecreeNo.3/2003

71. In aggregate, formal lending to agriculture in 2001 was estimated at about SD 44 billion. About 58 percent of this credit was extended to irrigated agriculture, mainly for cotton production. Semi-mechanized rainfed agriculture and some large livestock enterprises received about 40 percent, while traditional small-scale farmers received only 1-2 percent. The main sources of financing for irrigated agriculture were the Ministry of Finance and National Economy, Bank of Sudan, and commercial banks (particularly the consortium of commercial banks who agreed to contribute to the financing of the agricultural sector). The government provided about 46 percent of the loans, equivalent to about half of Sudan’s total revenues from direct taxation in 2001. In addition, the Ministry of Finance and National Economy had considerable contingent liabilities through its guarantees of loans extended by commercial banks via the consortium.

72. Table 4 shows the distribution of lending to the agricultural sector from 2000 to 2002. On average, two-thirds of credit disbursed by the Agricultural Bank of Sudan over the three years was for the irrigated sector, compared to only 9 percent for the traditional rainfed areas. There is no specific information on the purpose for these loans but the ABS stated that loans were typically used for food crop production, cash crops and some off farm income earning activities.

Table 4: Annual Disbursements by the Agricultural Bank in Main Farming Systems(2000 – 2004)

Farming System 2000 2001 2002 Average(SD billion) Percent

Traditional Rainfed 0.54 0.33 0.55 0.47 8.9Semi-Mechanized Rainfed 0.82 1.61 1.37 1.27 36.4Irrigated 1.72 3.27 5.47 3.49 66.7Total 2.28 5.21 7.39 5.23 100.0Source: Agricultural Bank of Sudan

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73. The prospects for improving the availability of credit to small-scale farmers are slim without government guarantees or collateral provided for loans. Group lending has been attempted by the ABS and has also been unsuccessful and costly. Traditional farmers are risky clients for credit because of their uncertain environment, low yields (even in good years), remote location, and inadequate infrastructure for marketing and support services. Nevertheless, the traditional farming sector would have substantial potential if it were possible to increase average farm size, improve technology, and provide better infrastructure such as roads and domestic water supplies. But the most important requirement is the provision of tradable leases to farmers that would allow the purchase and sale of farms and hence a structural adjustment in the traditional farming areas resulting in larger and more profitable farms.

74. The Land Act will be revised to allow for tradable leases in agricultural areas

throughout Sudan. Structural change in the traditional farming areas would allow farmers to capitalize on their assets and would also be a powerful basis for growth and poverty reduction in these areas. Crop insurance will also provide more security to lending institutions. The combination of higher income and collateral would make these farms more credit worthy.

75. Meanwhile it is essential to restructure the Agricultural Bank of Sudan into a self sustaining financial institution, without compromising on the prudential regulations as set by Bank of Sudan. Subsequently the government will have to increase the capital resources of the ABS to enable it to extend it's coverage to 25% of small producers by the end of the medium term period. NGOs and the donor community projects are also expected to increase their components of support to microfinance institutions.

Marketing:

76. Gum Arabic production from Acacia Senegal remains a significant export crop, but the export marketing monopoly for unprocessed gum arabic vested in the Gum Arabic Company (a semi-government marketing agency) drastically reduces the proportion of export prices received by the numerous, small-scale domestic producers in remote areas in Sudan. This market distortion has for years had a significant detrimental impact on the incomes of many small-scale farmers. Typically gum Arabic producers receive less than 20 percent of the final fob export price. Although transport costs are indeed high from gum producing areas to Port Sudan, these and other normal marketing costs cannot explain a marketing margin of about 80 percent.

77. The monopoly has led to gum Arabic being smuggled across the Sudan/Chad border and sold from there to European buyers. This obviously results in a decline in Sudan’s exports. There is no logical reason to believe that there would be a pervasive decline in the quality of Sudan’s gum arabic following the removal of the monopoly because competitive forces and enforcement of quality control

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standards will eliminate inferior gum. A workshop during January 2004 arranged by the National Forests Corporation recommended removing the monopoly of the Gum Arabic Corporation. The export marketing monopoly for gum Arabic is to be abolished.

78. For decades, the main strength of the livestock sector has been its free marketing arrangements, unencumbered by government interference. About a year ago, however, the government granted monopoly powers over the export of livestock to the Gulf states to one export company, compared to the previous situation when at least five major and many minor companies handled exports. This has probably had the effect of depressing prices in the domestic livestock market because for most of the year domestic prices received by producers are heavily influenced by prices received on the export market. The reasons for the government’s intervention in the market were its concern that the future of Sudanese livestock exports was at the mercy of the import policies of a few Gulf countries and that vesting negotiating authority for Sudanese export of livestock (mainly sheep) in one influential entity who was well connected to Gulf state importers would ensure uninterrupted sales for Sudan’s most important agricultural export. It is now not clear whether fob livestock price are determined on a competitively market. The Ministry of Animal Resources and Fisheries will therefore have to regularly monitor the prices paid for livestock in the major markets, and also collect information on marketing margins for sheep and cattle so as to verify that livestock markets and the marketing process from farms to the market place are competitive, as step towards abolishing the monopoly.

79. Infrastructure, particularly roads constitute a major distance from producing areas to major urban markets. Improved roads would reduce marketing margins and result in higher incomes for producers as well as increasing access to social services. Transport in Sudan is mainly sporce due to harsh climate and long distances. With an area of 2.5 million sq. km. Sudan is served by about 55,000 km of roads, of which 6,240 km are asphelt-paved roads, about 3,740 km are gravel roads and remaining are seasonal earth and san tracks roads. The conditions of most of these roads are generally poor.

80. Investment in infrastructure in a large country like Sudan is difficult and expensive. However, the government in its effort to restructure public investment should allocate more resources for rural infrastructure, which could be complemented by foreign donors. Consideration is also to be given to maintenance with active involvement of rural communities.

Livestock

81. Livestock sub-sector will benefit from the reforms of improved delivery in research, extension, credit and rural infrastructure particularly water points, as well as land reforms and marketing de-regulation. Additional policy measures that will benefit the poor in this sub-sector includes; integration of rangeland and

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animal health extension programs in small scale farm areas and control of infectious diseases. The role of community based animal health workers will be expanded to address wider issues of production. Disease control will also focus on sweeping epidemics of small ruminants and poultry that are of concern to the poor.

Irrigated Sub-Sector:

82. The important policy changes needed for irrigated sector are mainly structural. The most important among these policies are changing land act to allow conversion of tenants current usufruct rights to long term leases that can be traded. This arrangement coupled with the introduction of a sustainable savings, and crop insurance system in the major irrigation schemes through the creation of farmers' owned savings associations will allow a better access to credit.

83. Empowering producers through allowing them the freedom of choice of crop mix based on recommendation from ARC will be an important element in the reform. Water users associations (WUAs) to be responsible for water management of the irrigation system and collection of water fees will be established. Water fees, cost of inputs and services rendered by the government would be charged on the basis of full cost recovery.

84. Production related services such as cotton ginning, maintenance and de-silting of lower irrigation system, transport, etc. would be contracted out by the farmers on free market competitive basis and/or privatized.

7. Enabling Environment:

85. The success of the strategy will depend on enabling factors namely structural reforms that will be undertaken in the public investment allocations, delivery system, community participation and appropriate natural resource management.

86. The agricultural strategy will therefore have to be supported by strong natural resource management, efficient delivery system, community participation and appropriate investment.

7.1 Enhancing Management of Natural Resources

87. The Sudan is endowed with rich natural resources. These resources however, are fragile and rapidly degrading as a result of a multiplicity of factors. Soils are under pressure from poor cropping practices and increased exposure to wind and water. Rainfall is extremely variable causing periodic droughts and floods, and inducing displacement of millions of rural poor. As a coping mechanism, farmers remove trees to produce wood, a source of cash for buying grains. Increasing livestock numbers under the pastoral system and the absence of effective regulations for controlling grazing result in the depletion of rangelands at rapid

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rate. The situation is further aggravated by the expansion semi-mechanized and rainfed farming on fragile areas. There is an urgent need for sound management of natural resources. The major objectives to be achieve by sound management of natural resources are: avoid resource degradation thorough prior screening and use of environmental assessments, mitigate adverse impacts through environmental management plans and other measures, mainstream environmental issues into broader development programmes for managing natural resources, and establish regulations and laws to protect the environment and build capacity to enforce them.

88. Management of natural resources calls for coordination of a variety of approaches to improve management of forests, grass land, soils and water resources, including policy reforms and decentralization, improved regulatory capacity, and strategies to increase participation and empowerment of communities.

7.2 Delivery System:

89. Decentralization in Sudan has accorded several responsibilities to the lower level of government. Many of the agriculture poverty reduction programmes will be implemented at lower level of government.

90. Planning and organization of the delivery system at the lower levels of government should not be overlooked in light of the weak capacities at these levels. Bodies responsible for the delivery system will be supported by a strong program of capacity building, particularly in areas of delivery mechanisms, planning, auditing and monitoring.

91. Locality planning committees elected by the people in the village will be established. The committee should be representative of all the beneficiaries, including women and youth groups. The committee will be entrusted with the responsibility of deciding on the priorities of the community within the plans of poverty reduction in the community. The locality planning committee will be assisted by a small unit consisting of agricultural and livestock officers. The number and specialties of officers will depend on the nature and types of agricultural and other activities prevailing in the locality. With assistance of the planning support unit, the locality planning committee will draw the poverty reduction strategy, the work plans and budgets.

7.3 Participation:

92. In line with decentralization policies, the government will provide partial grants to communities to pursue their development objectives within certain limits. The ultimate result is better project design, implementation and sustainability. Communities will select projects that match local preferences, and will be keen to see that community funds are properly used. The goal of community driven development approach is to build capacity of communities and the capacity of the local governments to distribute funds to communities and overseeing their use.

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For this approach to succeed the government will provide training, technical and managerial support to communities, and create accountability mechanisms and provide incentives to assure that communities have used funds as intended.

93. Agricultural cooperatives, water and other resource user associations are vital for

rural development. They reduce the cost of marketing of inputs and outputs and facilitate access to resources. The government will strengthen those organizations through creating an enabling policy and legal environment and provision of technical advice and training. The government will see to it that these organizations are run according to sound democratic principles and not controlled by rural elites motivated by private interests.

94. Financial support in the form of matching funds may be provided by the government and NGOs as seed money to start projects and activities. The government and producers’ organizations can agree on criteria of producers accessing and allocation of funds.

95. Capacities of nomadic communities will be enhanced through the provision of technical assistance to enhance pastoralists skills in forming community-based organizations, assessing environmental conditions, negotiating and resolving conflict, developing and implementing community-based land use maps, and monitoring and evaluating results.

96. Formal and popular institutions to clarify land rights and establish mechanisms for resolving disputes over access to land, water and other natural resources will be established and empowered.

97. The government will also develop and maintain early warning systems for drought, strengthen drought management capabilities building on customary coping strategies.

7.4 Public Investments:

98. Most of adjustment reform took place through reduced allocations to development projects and allocations to the states negatively affecting the pro-poor sectors. However, it is not adjustment that is to be blamed for these cuts in public expenditure, but rather the inability to allocate the available resource efficiently is the root cause behind depriving the pro-poor sectors from needed resources.

99. Total public expenditures (2004) constitute about 16.2% of GDP of which 5.7% of GDP is allocated for military, police and security expenditures i.e. about 40% of total expenditures, and the remaining 11% of GDP for other sectors of which agriculture receives only 0.9% of GDP i.e. about 5% of total expenditures. The above percentages clearly indicate the meager resources available for agriculture. Moreover, imbalance in resources allocation for development is also apparent where for example about five projects, namely Merawe Dam, Wheat, Geili power

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station, and Development of Services for Higher Education projects receive 30% of total domestic resources allocated for development.

100. Within the 0.9% of GDP allocated to agriculture, the irrigated sector is allocated around 0.6% of GDP i.e. 65% of total allocations to agriculture, traditional and livestock sub-sectors are allocated 0.25% of GDP i.e. about 25% of total allocation to agriculture while research receive about 0.05% of GDP or 10% of total allocations to agriculture.

101. The inappropriate allocations are also apparent not only between agriculture and other sectors, or among the sub-sectors of agriculture but also within the sub-sector itself. Out of the meager resources allocated to research about 65% are allocated for wages and salaries, leaving only 35% for running cost and development programs.

102. To achieve the targets of the agricultural strategy the above situation has to be redressed. A major step in right direction is to restructure the budget within a medium term framework through a package of reforms, chief among which is to reduce military and security expenditures in favor of agriculture and other social sectors especially the pro-poor sectors. The budget restructuring will be accompanied by a medium term public investment program (PIP). The pro-poor sectors within agriculture will constitute the public investment program core.

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Annex I

Poverty Reduction Strategy and Programmes in Agriculture

Policy Matrix

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SudanPoverty Reduction Strategy and Programmes in Agriculture

Objectives Targets PoliciesAgricultural sector, General:

Sustained productivity increases; Increase rural employment; Improved services for women in

rural areas; Increase stability in agricultural and

livestock production Reduced rural poverty. Reduced rural-urban migration. Increased contribution of

agriculture to total GDP.

Reverse the decline in productivity per unit.

Efficient rural savings and credit institutions for rural households by 2006.

Improved producers income starting 2005.

Reduction in rural-urban migration by 2006.

Research and Extensions Institutions Reformed.

Marketing Monopolies abolished by 2005.

States and Local levels delivery Mechanisms Established.

Land use map prepared by 2005. Agriculture census started by 2005. Information and monitoring system in

place by 2005.

Land Reform. Introduction and adoption of

appropriate technologies. Marketing deregulation. Restructuring of ABS. Enforcing land use lease conditions

in mechanized farms. Restructuring research and

establishing extension centers. Allocate adequate resources to

agriculture, rural infrastructure and basic social services.

Providing enabling environment for increase private investment in agriculture;

Objectives Targets Policies Traditional Agricultural Sector

Sustainable increase in productivity, thus increased rural incomes;

Increase rural employment; Improved services for

women in rural areas; Reduced rural-urban

migration; Enhanced household food

security.

Due to adoption of improved seeds, IPM, supplementary irrigation … etc productivity by 2006 increased as follows: Sorghum 20%, millet 14, sesame 33%, groundnut 20%, karkadi 36%, watermelon 40%, and hence household incomes improved; Rights and access of 25% of small producers (including women) to land, credit and insurance institutionalized 2006; 10% of the traditional areas received supplementary irrigation through water harvesting programmes adopted by 2006; 50,000 women trained in agro industries and accessed to micro credit; Provision and equitable distribution of basic services (roads, water, health, education) ensured by 2006; Efficient marketing system developed by 2005. Small producers organizations supported and strengthened 2005.

Land reforms and land use maps undertaken and implemented by 2006.

Land Policy Reforms. ABS and other agriculture financing

institutions restructured and strengthened by 2005; Design drought and conflict early warning

system. Research reform and establishment of Technology Transfer Centers Increased investment in rural infrastructure. Effective and transparent community involvement in agricultural decision-making process . Establishing market information networks. Abolish marketing monopolies.

Livestock: - Efficient and

Establishment of new (and upgrading of old) livestock training centers for multidisciplinary

Land reform leading to amendments in Land Act providing for regulations on the

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sustainable livestock industry.

Providing leadership in the long term sustainable management of Sudan’s grazing resources.

Sustained growth of employment and incomes in irrigated and rainfed small-scale livestock industry

Efficient and accessible livestock marketing system

Improvement in the quality of the national cattle herd and sheep flock.

Control over the outbreak of infectious diseases throughout Sudan.

extension agent and community animal health workers.

Introduction of an integrated livestock state extension programmed by 2006 in the small-scale rain-fed and irrigated farming areas.

Investment and management programme for the expansion of 52 water points for livestock in designated areas of Sudan implemented.

Rangelands by 2008, as follows:2003 2008 (%pa)Cattle 0.5 0.7 Sheep 0.6 0.8 Goats 1.3 0.4 Achieve the following annual production levels

and implicit growth rates: Type 2002 2008 (Tone mill) (%pa)red meat 1.5 1.8 4.0 milk 7.0 7.5 1.4 (tons 000) broilers 30 60 20 eggs 20 40 20 fish 57 75 6.0 Adequate public and private livestock market infrastructure is available in major primary markets (25% expanded and/or Rehabilitated) by end 2006 Reduced marketing margins. Availability of accurate scales in 10 % of primary auction markets, and in 30% of secondary markets by end 2006.

control of grazing intensity and re-plan semi mechanized and traditional agriculture in various agro-climatic zones by 2006.

Promoting smallholder livestock in beef, dairy, small ruminants and poultry production.

Introduction of intensive production technologies and improved range management practices based on community participation.

Improved pasture and fodder and use of supplementary feeding from all available food resources.

Adoption of improved technology in disease control and veterinary public health to ensure access of Sudan livestock and animal products in international markets.

Provide an integrated extension services for rangeland areas based on the sustained use of natural grazing species, residues from annual crops such as sorghum and groundnuts for small-scale poor farmers in rain fed farming areas.

Facilitate livestock marketing and promote primary processing industries.

Establishment of livestock enterprises through improved access to available lines of credit .

Development and improve the national herd through research selection and breeding.

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Community marketing cooperatives established. Establishment of a marketing unit in the Ministry of Animal Resources and Fisheries to monitor the extent of competition in the export marketing of livestock by 2004 and abolish marketing monopoly by 2005. Achievement of internationally accepted sanitation and hygiene standards in all public and private abattoirs and related meat processing plants by end 2005. Comply with animal health code and codex standards of desease control. National Herd Vaccination Project adequately funded. The whole of Sudan declared free of rinderpest by 2005 and 50 percent of national sheep flock vaccinated against sheep POX and PPR, and 30% percent of goat population vaccinated anainst CCPP by 2006. Recruitment and training of Sudanese national to ARRC animal breeding programmed resulting in 30 percent increase in genetic research staff cattle, sheep and poultry breeding programmed in ARRC aimed at improving disease and heat resistant breeds has been evaluated by ISNAR as a world standards animal genetic research institution by end 2008.

Veterinary and hygiene problems addressed.

High quality inspection service by government of the quality of processed livestock products and livestock feed industry to ensure output is at internationally acceptable standards Effective surveillance, diagnosis and control policies and systems for infectious animal diseases. Cancelling current livestock export

marketing arrangement in order to return export marketing to a competitive basis and also to bring Sudan into compliance with WTO trade rules. Objectives Targets Policies

Agriculture Research: - Germplasm improvement. Diversification of crops and

cropping systems. Improvement of crop

protection factors. Improvement of post-harvest

practices and technologies. Transfer of the generated

technologies to clients (farmers consumers, industry ..etc)

Curtailment of land degradation and desert encroachment.

Improvement of animal health and productivity.

National Agriculture Research Systems (NARS) established.

Increasing number of trained scientists in ARC and ARRC threefold and collaborating with scientists from universities.

Crops diversified and productivity and quality improved.

Husbandry practices improved and production cost reduced.

IPM technologies in crop protection implemented.

Post-harvest practices viz storage, transport, utilization, processing, marketing improved.

Natural resources properly utilized, conserved and managed.

Cultivated fodder and animal feed increased and improved.

Gradual decrease in pesticide spays. Increase in efficiency of pest control. Gradual decrease of soft and selective

pesticides. Improved quality and abundance of

agricultural products for export and local consumption at time of scarcity.

Collaboration between ARC, ARRC and national universities institutionalized through the establishment of the national agricultural research systems (NARS).

Protecting property rights regarding technological innovations.

Adequate allocation to agricultural research.

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Objectives Targets PoliciesTechnology Transfer: -

Application of Effective and Appropriate Agricultural Technology

Sustained productivity increases;

Intensification of Agricultural Production.

Private Sector Involvement in Technology Transfer Promoted.

10 technology Transfer and Farmers Training Centers Established by 2006.

10000 farmers (men and women) Trained Annually by Year 2005 and Accessed to Institutional Credit.

2000 Demonstration farms Established by 2006.

500000 small Farmers Accessed to Improved Seeds and Seedling by Year 2006.

50 Water Harvesting Schemes Established by Year 2006.

10 poverty reduction programmes established covering 50 villages by 2006

20 TOT programmes per year achieved.

Provision of adequate agricultural supporting services (credit, crop insurance, water, roads, education and health);

Expand Demonstration Farms. Technology Transfer Institutions Expanded and

Strengthened. Strengthened Information Dissemination

Mechanism. Check the Horizontal Expansion; Promote the Endogenous Technologies.

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Objectives Targets PoliciesCredit:- Efficient savings, credit

and insurance institutions in rural areas that provide the opportunity to improve technology transfer, enhance productivity, reduce risks, develop rural agro-industry, and increase the incomes of small-scale farmers and rural people

Increase the ABS capital by US$ 100 million, 75 % of which to be directed to small producers by 2006

Operational start-up of the restructured ABS by end 2004

Improved small-scale producers' awareness and access to institutional credit for rural credit between 2004 and 2006 as measured by consumer surveys and ABS records.

No of small producers accessed ABS credit increased to 1.5 million (average size of micro credit is US$ 100 per producer).

ABS meets Bank of Sudan Prudential Standards by 2006.

Crop Insurance Policy Implemented by 2004.

Legislation for the restructuring of ABS into a self sustaining government corporation with the authority to provide savings as well as seasonal, short, medium and long term credit services in rural areas approved by end 2004

Implementation of food crop insurance policy.

Strong support from the Central Bank to develop encourage and develop rural financial institutions;

Involvement of NGOs and micro finance institutions and cooperatives in lending small producers.

Undertaking land reforms.

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Objective Targets policiesIrrigated Agricultural Sub-sector: - Efficient and equitable use of Sudan’s allocation from the Nile Waters Agreement Prudent and equitable use of underground water in all of the underground basins Integrated management of surface and underground water Effective management of the environment to reduce the destruction of watersheds and the consequent run-off and siltation of water storages and irrigation canals Increase productivity in

Irrigated Schemes within a financially sustainable operations of these schemes.

Increased productivity (as the result of adoption of model technologies including improved seeds, IPM, supplementary irrigation) of the farms as follows: Sorghum 95%, sesame 30%, cotton 60%, sunflower 45%, groundnut 45%, maize 18%, wheat 60%, rice 55% by the year 2006;

Improved quality and extent of regular annual maintenance of canals and control structures in all systems with a 60 percent increase in silt removal and a 70 percent increase in weed removal in the four central government irrigation systems.

Increased diversification of crops in central government irrigation schemes with at least 3 crops in the rotation (as well as livestock) by 2007

More efficient water management in central government schemes resulting in the reduction of water losses.

An increase of 20 percent in the development of small-scale irrigation areas in the small farming rainfed areas to generate increased, and more reliable, production of food as well as cash crops using the experience of some successful models.

Land use rights settled and secured by 2005.

Significant changes in the cropping patterns in major irrigation schemes by end 2006 with a greater variety of crops produced based on technical research by ARC, and the subsequent freedom for farmers’ groups to make their choice of crop rotations

Rehabilitation of canals and water control structures.

Establishment of farmers’ water users associations in 50 percent of the all the major schemes by end 2005.

Introduction of a sustainable savings and credit system in the major irrigation schemes.

Increased participation of farmers’ groups in water management at the tertiary level.

Land Tenure Reforms. Privatize commercial

activities in irrigated schemes.

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Objectives Targets Policies Semi Mechanized Sub-Sector: -

Sustained productivity increases;

Check horizontal expansion of schemes.

reduce negative environmental impacts.

Increased productivity (as the result of adoption of model technologies including improved seeds, IPM, supplementary irrigation) of the farms as follows: Sorghum 50%, sesame 24%, cotton 50%, sunflower 20%, by the year 2006;

Research on the economies of scheme size for different categories (individual, companies, corporations...etc) specified and implemented 2005.

Horizontal expansion checked. Excess fertile lands distributed to small

farmers and marginal lands allocated for grazing.

Marketing bottlenecks removed 2005; Environmental laws reinforced 2004. Land use map prepared by 2006.

Undertake Land Reform. Research on the economies of scheme

size and economies of crop mix. Appropriate timing of sowing

researched and results disseminated and implemented.

Regulation of the sector to protect the rights of small producers to land;

Maintain integration of crop-livestock production.

Enforce Enviromental Regulations.

Objectives Targets Policies

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Natural Resources Management: -Desertification Control: 1. Rehabilitation of

degraded forest land. 2. Forests reservation. 3. Reduction of the area

subject to desert encroachment.

Increase in the production of forests products:4. Promotions of non-wood

forest products. 5. Increase the annual value

of pastoral and forestry production in reforested area.

Reservation of 25% of the country area for natural forestry, wildlife, and range.

Reduction of 15% of the area subject to desert encroachment by year 2015.

Replanting of an average of one million feddan of forest per year between 2004 - 2006.

Piloting with agroforestry on one million feddan on irrigated agriculture 2004-2006

Increase areas of private and community served forests to half a million feddan by 2006.

Planting of 50000 feddan per year new planting in marginal areas subject to desertification.

Sustained increase of 10% per year in the production of non-wood forests products.

Non wood forests product increase annually by an average of 15000 tons between 2004-2006.

Increase in the annual production of gum Arabic by 20% by year 2006.

Increase woody forests products increased to 2000 cubic meters for sown timber and remain 16 million to fuel wood by 2006.

10% increase in the annual value of pastoral and forestry production in reforested areas. .

Increase crop productivity through agroforestry by 10-20% starting 2006.

Preparation of land use maps in marginal areas in Sudan where forestry and food crops production are in completion.

Establishment of a system of land transfer from existing usufruct holders to the appropriate authorities for public afforestation programs.

Protection of areas subject to desertification control. Availability of along term credit line at the

Agricultural Bank of Sudan for domestic investors in gum Arabic and community forests.

Abolition of the marketing monopoly in gum Arabic. Allocation of needed funds in federal/state budget for

the replanting of degraded former forest areas. Rehabilitation of nurseries for the production of gum

Arabic, Acacia seyal, Khaya seneglensis, Neem and other shade trees seedlings.

Training of forests extension agents to provide advice on efficient private forest rehabilitation methods.

Increase the capacity of the government (federal/state) to monitor and enforce land lease conditions on cleaning and cultivation in areas subject to desertification.

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Annex II

Poverty Reduction Strategy and Programmes in Agriculture

Public Investments

SudanPoverty Reduction Strategy and Programmes in Agriculture

Public Investments programmes (2004-2006) Million SD Year 2004 2005 2006Sector Local Foreign Local Foreign Local Foreign Agriculture Research: Research stations: Agriculture and Livestock

340 0 450 3600 600 3600

Technology transfer TTC 215 0 315 702 400 702 Seeds propagation 500 - 500 200 500 200 Pest control Crop Protection Administration strengthening

0 0 150 100 0 0

Credit Contribution to ABS 1000 0 2480 7280 2720 10920 Food security: Development of the traditional sector

1096 1510 5300 12500 5700 13450

Data and information: Agriculture census 0 0 80 140 80 140 Land use map 0 0 50 150 50 150 Information system and monitoring

0 0 75 75 30 30

Irrigation Heightening of Roseries Dam 200 0 300 8277 600 10200 Rehabilitation of irrigated schemes

2600 1348 2600 5200 2600 5200

Increasing productivity of wheat and high value crops in the main Nile

3000 0 500 2500 700 2700

Toker and Gash Delta sustainable livelihood

721 917 500 420 300 420

Animal resources and fisheries: Combating endemic disease 320 570 600 1400 800 1600 Quarantine rehabilitation 1200 0 50 1048 700 1048 Animal health 660 0 1220 3800 1500 3800 Animal breeding 135 50 305 170 305 170 National vaccination programme

1000 0 1000 0 1000 0

Control of illegal fishing 100 0 200 300 200 300 Natural resources Forestry conservation and development

40 60 80 120 160 240

Pasture improvement and management

100 0 667 1120 667 1120

Total 13227 4455 17422 49102 19612 55990

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