FINANCING THE GROWTH OF THE AGRICULTURAL SECTOR IN SOUTHERN SUDAN:THE ROLE OF GoSS

1. FINANCING THE GROWTH OF THE AGRICULTURAL SECTOR IN SOUTHERN SUDAN:THE ROLE OF GoSS Paper presented at the first Southern Sudan Micro-finance Conference. BY S J DIMA Home and Away Business Centre, Juba. July 20 � 21 2010

2. 1. Introduction The title of the conference: Micro- finance in Southern Sudan; The concept/ definition of micro-finance: Micro, small, medium, large finance; The theme: Partnering to expand access to financial services in Southern Sudan. The implication of the theme: expanding access to financial resources to all the sectors of the economy of Southern Sudan.

3. Anticipated sources of finance in Southern Sudan. Commercial banks; International finance institutions such as IFC; Development agents such as USAID, IDA, IFAD, EC, ADB, Micro-finance institutions and others. Note that the specific mandates of the above organizations will influence their actions; e.g. the prevailing lending conditions in Southern Sudan.

4. 2. The economic environment in Southern Sudan. Dominance of the government sector in the economy: e.g. employment. Poor infra-structure is a constraint to the stimulation of financial services and hence development activities in the productive sectors of the economy; Emphasis presently is on security, services and to a limited extent infra-structure; The productive sectors have the potential to generate revenue to individual producers and governments at the various levels are low in the priority of GoSS ( 2006 � 2009 GoSS budgets); Local financial institutions which could work in partnership with foreign organizations are limited. and Local entrepreneurs are hampered by financial resources, and lack of knowledge and skills to borrow from international financial markets.

5. 3. Growth of the agricultural sector in Southern Sudan. The concept of growth in economics; Definition of the agricultural sector: Crops; Livestock; Forestry; and Fisheries. Characteristics of the sector:- Traditional systems of production Small, subsistent holdings; Non market oriented; Small quantity of products from each holding; Livestock kept for social prestige rather than bred for the market

6. Characteristics continued. In forestry, high value tree species like teak are used for local fencing and construction; Fishermen use dug out canoes and traditional gears for catching fish, no motorized boats and modern nets that do not catch small fish to increase breeding stocks; Undeveloped markets; and Limited farmers organization for production and marketing of surplus produce.

7. Major constraints of the agricultural sector Feeder roads in poor condition, hinders supply of inputs and off take of surplus; Market information lacking, making market access difficult; Inadequate supply of production inputs such as seeds, tools and fertilizers; Poor extension service to advice the farmers on the correct husbandry practices and market opportunities; Access to various types of finances to expand area under crops and other enterprises; Weak farmer groups, associations and cooperatives that could be used as channels for channeling credit to reach more farmers; Lack of appropriate technology to expand production and ensure food security e.g. improved seeds, mechanization including use of oxen in livestock keeping areas, tractor mechanization to enable small holder farmers operate economic holdings that can meet family food requirements and produce surplus for the growing markets in the urban areas

8. 4. The role of GoSS in the growth of the agricultural sector. Evolvement of economic policies that :- Stimulate expansion of area under enterprises and volume of production e.g. low prices for production inputs, including tractor prices and hiring rates for operations; Encourage shifting of production resources to high value commodities e.g., e.g. export crops like vegetables; Encourage production of staple food stuffs to meet food security requirements; Encourage producers to enter certain markets to diversify their sources of income e.g. poultry production; and Create financial institutions to finance private initiatives activities in the agricultural sector in collaboration with similar foreign institutions.

9. Adoption of fiscal policies that:- Encourage expansion of production by adopting low commodity taxes or market fees; Promote/ stimulate production of export commodities by removing tariffs; Encourage value addition by providing appropriate infrastructure, cheap power for processing and agri-business activities; Promote technology transfer from foreign investors to local entrepreneurs; Encourage ownership of enterprises e.g. agric-industries by Southern Sudanese; Stimulate diversification to markets, commodities that have advantage over others in the economy by removing all taxes; and Attract foreign capital to invest in the agricultural sector : - direct private, joint ventures with government or local investors.

10. Experiences of GoSS institutions in the agricultural sector in the last three years (2007 -2009). Enact ion of policy frameworks; agriculture, forestry, livestock and fisheries; Rehabilitation of the agricultural sector projects, e.g. SPCRP, SAFDP, LFDP, SSLDP, SIFSIA etc.; Institutional development � construction of state agricultural offices and in some selected counties; Provision of vehicles, mobile veterinary laboratories and office equipments; Refresher courses for MAF, MARF, state and county agricultural extension staff; Provision of some grants to few farmers groups in the five eastern states

11. GoSS institutions in the agricultural sector experiences can't. Encouragement of farmers to adopt the use of oxen to expand area cultivated to an economic level; Importation of tractors for sale to farmers group, GoSS and states institutions to triple or quadruple area under cultivation; Attraction of foreign investors for crops and forestry eg. Sugar and teak timber concessions; and Encouragement of fishermen to increase their catch by provision of boats, nets, and some transport to bring fish to the juba market.

12. 5. Conclusions. For the agricultural sector in Southern Sudan to grow, GoSS institutions need to:- Adopt appropriate economic and fiscal policies; Attract foreign investors for joint ventures with GoSS institutions and private local entrepreneurs; GoSS institutions should adopt appropriate strategies, projects and programmes to remove most of the constraints in the sector to stimulate, expansion , growth and diversification in production in the various sub sectors; and GoSS institutions through research and experimentation should introduce modern technologies that would revolutionize production and transform the subsistence sector to commercial. This will products that are needed both in the local and international markets. That is high value products, new breeds, new species, value addition and agro-processing.