Maize Losses During Storage: A System Dynamics approach to the Food Reserve Agency Case in Zambia

Abstract

Agricultural development in sub-Saharan Africa is seen as the key pathway towards economic development. Among sub-Saharan countries, Zambia stands out for its agricultural production potential, and has in the past decade, managed to reach the status of a maize surplus producer. Such increases in maize production have been supported by two government subsidy programs: the Farmer Input Subsidy Program (FISP) and the Food Reserve Agency (FRA). The drastic increases in production experienced in the 2010-2013 period, brought severe unintended consequences for the FRA in the form of budget overshoots and excessive maize storage losses. As considerable as these maize losses during storage are (estimated at 32% in 2013), little is certain regarding their causes and possible solutions. This research project provides a tool that helps explain the high losses of maize in the FRA storage system and that allows for the identification and assessment of alternative strategies that could prevent/mitigate the occurrence of such a problem in the future. This was achieved through a system dynamics and case study approach, relying on a system dynamics simulation model that integrated the causal mechanisms leading to maize losses during storage and the specific circumstances of the FRA case. Such an approach permitted the identification, description and simulation of the phenomenon in a consistent, coherent and transparent manner. It was found that maize losses during storage can be described as the result of the interaction of two variables: inventory age (time of storage) and storage method. It was also found that these two variables are the result and consequence of inventory management and investment decisions within the FRA, and as such within its control. Through the analysis of the main feedback loops of the model and the analysis of two possible FRA growth scenarios, leverage points that could reduce weight losses were identified and tested. In a non-saturated maize market scenario, reducing the national reserve size and switching the capacity investment decision from sheds to silos are viable options. In a saturated maize market scenario, switching the capacity investment decision from sheds to silos is viable to some extent, but in this case, the only fundamental solution lies in fostering export mechanisms.