The Beira Agricultural Corridor

The Beira Corridor is the gateway to South East Africa, linking inland areas of Zambia, Malawi, Zimbabwe and Mozambique by road and rail networks to shipping facilities at the Indian Ocean at Beira. The major part of the corridor proper, through Mozambique to Zimbabwe contains a large area with huge agricultural potential – compared to the Cerrado region of Brazil, developed as a major agricultural area since the 1970s.

The BAGC was initiated by Yara in close cooperation with several key public and private sector stakeholders, including the Government of Mozambique. Financing came from the Norwegian government and its development agencies, Norad and Norfund; AGRA, TransFarm Africa; Cepagri; ACIS; ProRustica; AdDevCo; and InfraCo. These stakeholders formed the Beira corridor partnership, with a board and a small secretariat to facilitate the planning process and to present and follow up on the investment blueprint.

The main tasks of the partnership are to identify and catalyze the development of additional private and public sector funds into the corridor; identify potential agribusiness ‘clusters’; improve the efficiency of agricultural value chains; and improve communication and coordination between investors and other stakeholders.

The two underlying strategies are those of public-private partnership and value chain development. Building on this approach, the BAGC provides a focus for commercial investments in agribusiness along the entire value chain; in infrastructure, farming and processing, input supply chains, and access to markets. The initiative promotes agricultural models which ensure smallholder farmers and the rural communities in which they live will benefit from the growth of commercial agriculture.

The BAGC embraces an area with excellent potential for commercially viable agriculture, and there is great scope for other economic activities. Today there is hardly any commercial agriculture in the corridor; the rural population is almost entirely reliant on subsistence farming.

Yet, all the natural conditions required for successful agriculture – good soils and climate, access to land and water resources – are found in abundance along the corridor. Much of the infrastructure has been repaired after the war in Mozambique, but still needs upgrading. Several major transportation projects are underway, including the Sena railway line to Tete and Beira port. Both will strengthen channels to markets for agricultural producers, as well as ease access to inputs. The Machipanda rail line to Zimbabwe is operational.

Today, supply chain services, e.g. fertilizer supply, are largely absent, and when available are very costly. There is hardly any access to agricultural finance, and available credit is extremely expensive. Harnessing the synergies between the agriculture and infrastructure sectors in such a way as to make agriculture truly competitive and impact other local businesses connected to the infrastructure is part of the corridor development.

Studies undertaken in preparation of the initiative show there is an opportunity to establish the BAGC as a major agricultural producing and processing region over the next two decades. Of the 10 million hectares of arable land available in the corridor areas only 1.5 million hectares are farmed; less than 0.3 per cent is farmed commercially. No less than 190,000 hectares of land could be put under irrigation and produce world class yields, with crops sold profitably in domestic, regional and international markets. There is also private sector interest in investing in biofuels in the corridor.

The studies also illustrate that investments in commercial agriculture would generate major direct and indirect benefits for smallholder farmers and rural communities generally, which is a stated objective of the partnership. With an investment into the corridor of USD 250 million over five years it is estimated that, in Mozambique alone, at least 200,000 small-scale farmers will benefit directly from improved yields and increasing incomes - creating 350,000 new jobs and helping move up to one million people out of extreme poverty. Improved productivity and increased production will enhance food security and reduce dependence on imports, turning Mozambique into a potential food exporter.