FAO/WFP CROP AND FOOD SUPPLY ASSESSMENT MISSION TO LESOTHO

21 June 2001

Mission Highlights

1. OVERVIEW

At the beginning of January 2001 a cold front passed over Lesotho causing frost that severely affected crops at their critical development stages. It was immediately followed by a prolonged dry spell, a heat wave and a hailstorm in parts, all of which further damaged crops. In response to these events, the Government of Lesotho requested FAO and WFP for assistance in reviewing the country's food situation and outlook for 2001/02 marketing year. Consequently an FAO/ WFP Crop and Supply Assessment Mission visited the country from 5 to 16 May 2001, to review prospects for the 2000/01 crops and the overall food supply situation, and to estimate the cereal import requirements, including food aid, for the 2001/02 marketing year. The Mission received full cooperation from the Ministry of Agriculture, Co-operatives and Land Reclamation, the National Early Warning Unit (NEWU) and the Ministry of Industry, Trade and Marketing. Discussions were held with relevant UN agencies, donor representatives, NGOs and grain importers. The Mission split into three groups to ensure adequate coverage of key areas and visited all ten districts of the country. Interviews were conducted with farmers, extension agents, millers and traders.

The Mission forecasts the 2000/01 cereal production at 80 000 tonnes, which is about 55 percent below last year and 60 percent below the average of the last five years. Maize production is estimated at 58 000 tonnes, wheat at 11 000 tonnes (summer: 5 000 tonnes, winter: 6 000 tonnes) and sorghum at 11 000 tonnes. Other crops such as beans and peas were also observed on most farmers' fields, and contribute to the diet of families and cash incomes when grown in larger quantities.

The Mission estimated that the total cropped area had not changed from the normal years. Drought, frost and hail were the main causes of poor crop yields. The drought was exacerbated by high temperatures, which accelerated evapo-transpiration. Frost damage was particularly severe in the mountain districts where many households suffered total crop loss. Cutworms, termites and stalk borers further damaged some of the surviving plants, further reducing yields.

For the 2001/02 marketing year (April-March), domestic cereal supply, estimated at 112 000 tonnes, falls far short of national consumption requirements. With a mid-marketing year population estimate of 2.192 million, the cereal import requirement is estimated at 329 000 tonnes, which is expected to be covered almost entirely by commercial imports. Even in normal years, Lesotho's cereal production covers about 50 percent of its domestic consumption requirements. The one-to-one convertibility of the local currency with the South African Rand means that availability of foreign exchange is not a major constraint to commercial imports from South Africa.

The Mission estimates that there is no need for large-scale food assistance. At the household level, while most families will face larger than usual food deficits in marketing year 2001/02 (nearly all rural households in Lesotho buy food between harvests), they have adequate coping means to get them through to the next harvest, provided food prices remain stable. The means include sale of livestock (>80 percent of rural households own cattle, goats and sheep) remittances from family members working in South Africa and towns in Lesotho, as well as local wage labour and informal sector income earning activities. However, there is a relatively small proportion of rural households (probably 10-15 percent) in the most affected districts (Mokhotlong, Thaba-Tseka, Mohale's Hoek and Quthing) who have lost their crops but have neither livestock nor off-farm income with which to access food on the market. This is the group most at risk. The group will also not have seed for planting in the next cropping season starting in September 2001.

The Mission recommends that a rapid survey be undertaken in the four worst affected districts to identify, quantify and precisely target these households for food and seed assistance. It is recommended that the survey be jointly undertaken by GoL/WFP/FAO's Special Relief Operation Service (TCOR).

2. ECONOMY AND AGRICULTURE¹

During the period from late 1980s to mid-1990s, the country experienced an economic boom that was driven by two main factors: construction under the Lesotho Highlands Water Project and the expansion of the manufacturing sector. The GDP grew at an annual average rate of 6.3 percent during the period from 1988 to 1997. In 1998, there was a turnaround in the performance of the economy. GDP contracted by 5.4 percent that year. Growth resumed in 1999 and 2000, but at a slower pace, respectively at 2.8 percent and 2.5 percent, rates which did not allow for per capita income growth. The economic recession was caused mainly by the civil unrest in 1998, which led to widespread looting of businesses, job stoppages and reduced investor confidence.

In more recent years, there has been a substantial deterioration in the country's fiscal situation. The government budget deficit has jumped from 1.4 percent of GDP in 1998 to 14.4 percent in 1999, before falling back to 3.5 percent in 2000. Recent progress on the macroeconomic front has been deemed broadly satisfactory by the IMF which approved in March 2001 US$32 million for a PRGF-supported programme (Poverty Reduction And Growth Facility). Fiscal pressures have stemmed from declining customs revenue relative to national income, weak tax administration and more recently, losses associated with the liquidation of two stated-owned banks. The outlook for Lesotho's fiscal situation in the medium term will continue to be influenced by structural changes in the external environment. Under the SADC Free Trade Area Protocol signed in 1996, Lesotho is obliged to remove import restrictions and tariffs over a period of 8 years. The loss in customs revenues is estimated to reach 17 percent by the time the Protocol is fully implemented. The recent EU/South Africa Free Trade Area (EU-SAFTA), under which Botswana, Lesotho, Namibia and Swaziland are likely to lose their share of revenue from the Southern Africa Customs Union (SACU), may exacerbate the fiscal deficit. The Government of Lesotho faces the challenge of finding new sources of tax and non-tax revenue.

Lesotho has a very significant structural trade deficit. Annual exports tend to cover less than 25 percent of imports, though this percentage has been on the rise since 1995 (16 percent vs. 23 percent in 1999), due to the establishment of export-oriented manufacturing industries. Traditionally, this merchandise deficit has been more than offset by inflows of remitted incomes from migrant miners in South Africa and a surplus capital account. However, with a reduction in employment of Basotho migrant mine workers (125 000 in 1989 compared to 69 000 in 2000), declining customs revenues and falling levels of Official Development Assistance (ODA), the balance of payments has come under pressure in recent years and has registered a deficit since 1999. Nevertheless, in March 2001, official reserves were well above the target floor set by the Central Bank, representing seven months of import coverage.

The local currency, the Maloti, is pegged at par value with the South African Rand, trading at around 7.6 to the US$ at the time of the Mission. Over the year 2000, the Rand/Maloti has depreciated by 19 percent against the US$ and 7 percent against the Euro. The price increase in 2000 was 6.2 percent, despite persistent pressures from oil prices and the deterioration of the Maloti against major currencies. According to the Central Bank of Lesotho, prices are expected to continue declining in the medium term. The prime lending rate hovers around 17 percent. The external debt as a percentage of GDP was estimated at 70 percent at the end of 2000, of which 82 percent is concessional. According the Central Bank, the ratio of debt service to exports of goods and services has declined from 9.4 percent in 1999 to 9 percent in 2000.

In 2000, agriculture contributed about 17 percent to the GDP, down from 27 percent in 1981. Despite its importance, the crop sub-sector has been on the decline since the seventies. Growth potential is constrained by unfavorable weather conditions and degradation of arable land owing to overgrazing of rangeland. In contrast the crop sub-sector, livestock has been on the increase since 1997, with growth rates of 22 percent and 16 percent respectively for 1998 and 1999.

Lesotho ranks as one of the poorest countries in the world. According to the World Bank (1999), it is one of the world's 50 lowest income countries. Moreover, Lesotho ranks 127^th out of 174 countries on the UNDP's Human Development Index.

3. FOOD PRODUCTION IN 2000/01

Agro meteorological conditions

The rainfall for the month of October was fairly good and well distributed. These conditions continued through November into the first two dekads of December. However, from mid-December only few isolated showers were received, thus considerably reducing soil moisture reserves. On the 1^st of January, a cold front moved across the country and caused widespread frost which severely damaged crops. Subsequently, scattered rainfall accompanied by hail was experienced in the southern districts of the country. During the second week, dry conditions prevailed, with hot weather persisting until the end of the third week of January.

Far below normal rainfall was recorded in most reporting stations during the first two weeks of January (see Figure 1), except for a few stations that reported normal to above normal rainfall (Mohale's Hoek, Mokhotlong and Thaba-Tseka). Although on average mean temperatures appeared to be normal, on day-to-day basis extremely high temperatures were registered, which accelerated evaporation.

On a cumulative basis, rainfall shows normal conditions for the 2000/01 season, but the dry spell and the concurrent heat wave in January seriously hit crops. Localized hailstorms and frost in some mountain areas exacerbated the negative impact of the dry spell.

Figure 1. Actual vs Normal Monthly Rainfall, September 2000-March 2001

Source: Agro meteorology 1/ Northern Lowland; 2/ Foothills; 3/ Southern Lowland; 4/ Mountains

Supply of agricultural inputs

Fertilizer use for food crop production has ranged between 5 835 tonnes and 9 460 tonnes during the period 1996/97 and 2000/01. This translates into a national average of about 43kg of fertilizers per hectare. This is low by regional standards. The low levels of fertilizers use are despite the fact that farmers of Lesotho have enjoyed highly subsidized fertilizer since the 1980s.The subsidies have ranged from 5 to 30 percent for the period 1994/95 up to the present. The marketing of fertilizers is in transition towards market liberalisation. The private sector and cooperatives are currently distributing fertilizers that are imported from South Africa. Seeds have enjoyed the same subsidy as the fertilizer. However, most of the maize varieties used are local or recycled hybrid seed and only 21 percent of wheat seed used by farmers are improved. As for sorghum, a negligible amount of improved seeds is used. The improved seeds are marketed through the same channels as fertilizers.

Areas planted

The Mission estimates of planted area for the year 2000/01 are based on data provided by the Department of Crops of the Ministry of Agriculture, Co-operatives and Land Reclamation. These estimates have been generated from a large sample, stratified by district and cropping zone and were the most reliable at the time of the Mission. The area planted for each of the major summer crops in each district is given in Table 1. It was estimated that the total cropped area had not changed from the last season's area. The total national maize area is estimated at 138 300 ha, while the area under sorghum and wheat is estimated at 22 000 ha and 12 000 ha respectively. Some farmers reported only being able to plant small areas because of sickness or lack of oxen or tractors.

Crop yields

The Mission's estimates of crop yields for the year 2000/01 are based on data provided by the Department of Crops, adjusted on the basis of field assessments. The adjusted yield figures are given in Table 1. Yields per hectare are highly variable between districts. During discussions with farmers, the Ministry of Agriculture, the Disaster Management Authority Officials, and traders, it was mentioned that hail, frost and drought were the main causes of the poor crop yields. The drought was exacerbated by extremely high temperatures, which accelerated evapo-transpiration. Cut worms, termites and stalk borers also caused some damage to the crops in some of the districts. It was also reported that subsidized inputs were insufficient and came too late. While private traders market some inputs, these were rather expensive for the farmers who have no source of credit. The overall result was that the majority of farmers used low-yielding seeds and crops lacked enough plant nutrients. Such crops develop poor root systems and are highly susceptible to drought. The Mission observed that the maize crops suffered more from the drought compared to the sorghum. The estimated national average yield for sorghum is therefore significantly higher than that of maize (Table 1). This is a reversal of what happens in normal years, as sorghum is more drought resistant. While the late planted maize was hit by the frost at grain filling stage, the early planted crop was at the critical flowering/ grain filling stage when the drought occurred. While drought was the major factor reducing cereal yield in the low lying areas, frost was the major factor in the highlands, particularly in Mokhotlong, Thaba-Tseka and Upland Maseru. Localized hailstorms were also reported to have caused serious damage in some districts.

Table 1. Area and Production of Summer Crops in 2000/01, by District

Table 2. Total Cereal Production in 2000/01 Compared to 1995/96-1999/00

National average yields for maize and sorghum are estimated at 419 kg/ha and 495 kg/ha, respectively. Summer wheat yields are estimated at around 438 kg/ha.

Winter Wheat

At the time of the visit, some farmers were busy sowing winter wheat that will be harvested in December/January 2001/02. Planting of winter wheat normally starts mid April making use of the residual moisture and unseasonal rainfall. The significant late rains in April and May therefore augured well. Production varies highly from year to year, ranging from 300 tonnes (1990/91) to 9 000 tonnes (1982/83). The Mission forecasts winter wheat production for 2001/02 at 6 000 tonnes.

Estimated Cereal Production in 2000/01

Maize production is forecast at 58 000 tonnes while sorghum and summer wheat production is estimated at 11 000 tonnes and 5 000 tonnes respectively. Taking into account winter wheat production estimated at 6 000 tonnes, the aggregate cereal production in 2000/01 is estimated at 80 000 tonnes, which is 55 percent below last year and 60 percent below the average of the last five years. Figure 2 below indicates that cereal production in Lesotho has been on the decline for some time.

Other crops

Beans and peas are extensively grown, largely for home consumption, but also for cash when grown in larger quantities. Most households grow beans during the summer in rotation with cereals while peas are grown during the winter using residual moisture and unseasonal rains. Other crops observed were potatoes, pumpkins, sunflower, fruit trees, vegetables and alfalfa for dairy cows.

Livestock situation

The majority of rural households (perhaps over 80 percent) own livestock, mainly cattle, sheep and goats. Many also have a horse, two or more donkeys and chickens. Highland Maseru probably has the highest concentration of livestock in the country. Large herds of cattle and flocks of sheep and goats were observed.

Theft of livestock is a serious problem which negatively affects household food security and planting areas.

Table 3. Livestock Population and Distribution by agro-ecological zones, 1999/2000

4. FOOD SUPPLY AND DEMAND SITUATION

Access to food and prices

Lesotho is a net importer of maize, wheat, pulses, dairy products and other food commodities. In a typical year, roughly half of the food consumed in the country is imported. For maize, the main staple food, imports represent 60-65 percent of national requirements. Other than for wheat, virtually all imports come from the Republic of South Africa (RSA). In accordance with the SACU agreement, Lesotho does not impose duties on imports of agricultural commodities from RSA. Thus, food prices in Lesotho are closely linked to those in RSA. Past attempts at administering prices have resulted in increased smuggling, leading informal market prices to move towards those in RSA.

There are two large-scale milling companies in Lesotho, both of which operate wheat and maize mills. They process and package maize meal and maize by-products (animal feeds). The bulk of maize processed comes from commercial imports. Less than 5 percent originates from local production.

Once farmers' own grain is used up, they have to purchase maize flower at the industrial mills. In practice, they do lack the opportunity to buy imported whole grain and mill it cheaply at the local hammer mill. When domestically produced whole grain is traded, its price tends to be comparable to the mill gate price at harvest time, but is likely to rise gradually during the season as the scarcity and expectation of scarcity of maize grain, increases. This may be particularly the case this year.

Small-scale hammer mills are estimated to number over 300 in the country. They don't buy maize, but only process it for consumers. In poor growing years, virtually no domestic maize is sold to the large-scale mills. The majority of production is retained by farmers or traded locally, and is hammer-milled into meal.

RSA's Free State is located near the border with Lesotho and is the main supplier of maize to this country. The Free State produces more maize than any other province of RSA and registers substantial surpluses. Thus, Lesotho's relatively heavily populated lowlands and foothills are the natural market for maize farmers of the Free State. Under a free market in South Africa, maize is accessible to Lesotho buyers from nearby Free State cooperatives and farmers at prices which tend to compare favourably with those at most locations in the RSA.²

For the period 1997/98 to 2000/01, the white maize average domestic price paid by Lesotho's millers has fluctuated between M725/tonne (1997/98) and M620/tonne (2000/01).

Cereal supply/demand balance, 2001/02

The forecast of the cereal supply/demand situation for the 2001/02 marketing year (April/March), summarized in Table 4 below, is based on the following assumptions and Mission observations:

• Farmers interviewed by the Mission stated that they had no stocks left. Last year was also characterized by a poor harvest. Therefore, it has been assumed that the opening on farm stocks are zero. Government and millers' opening stocks figures (31/03/01) were provided by the Ministry of Industry, Trade and Marketing.
• The mid-marketing year 2001/02 population is estimated at 2 192 400 and the per capita consumption at 125 kg for maize, 50 kg for wheat and 10 kg for sorghum.
• "Other uses" cover essentially post harvest losses and seed use. They are estimated at 6 percent for maize and sorghum and 5 percent for wheat.

Table 4. Lesotho: Cereal Balance Sheet for 2001/02 (000 tonnes)

The Mission forecasts grain import requirements for 2001/02 at 329 000 tonnes, which is anticipated to be mainly covered by commercial imports.

From a macroeconomic point of view, the direct convertibility of the maloti into rands means that availability of foreign exchange is not a major constraint to commercial imports. In the past, commercial food imports appear to have been quite responsive to the large fluctuations in the national production (see Figure 3).

From a household standpoint, most households should be able to cope, mainly through sale of livestock, off-farm income activities and remittances from relatives working in South Africa. Many households have also harvested other crops than cereals. However, a number of households who lost crops and have neither livestock nor off-farm income will need food assistance until the next harvest. They will also need seeds to plant in the next cropping season. This scenario is realistic, provided that RSA's maize prices do not increase significantly as a result of lower domestic production and higher regional demand for maize. Otherwise, the number of households at risk will increase.

5. FOOD SECURITY AND VULNERABILITY ASSESSMENT

5.1 Background

Most households are facing a reduced harvest in the current year, for some the reduction is not too great, but a few reported that crops failed completely. However, it was encouraging that most households expected to be able to cope without the need for external assistance. Livestock generally looked in good condition.

5.2 Coping mechanism

Households in the districts of Mokhotlong, Thaba-Tseka, Qacha'sNek, Mohale's Hoek and Quthing are hardest hit by the effects of drought recurring on average about once every three years, and problems resulting from soil erosion and poor farming practices. Food crops, employment and remittances and livestock are the most important aspects of family coping strategies.

In these marginal mountain districts, many households rely on the WFP-assisted school feeding programme to help meet family food needs. The Government and WFP are also in the process of finalizing the programming of the other development food aid resources in Lesotho, including Support to Disaster Preparedness and Mitigation Initiatives in food-insecure mountainous districts, which will target some groups affected by the current crisis. This activity has already been approved under the umbrella of the WFP Country Programme.

Despite the fact that the number of Lesotho miners working in South Africa has fallen from its peak (125 000 in 1989), the mission found that remittances from workers in South Africa were still the most frequently mentioned coping mechanism during interviews on the field trips. A large number of householders questioned by the team indicated that it was their main source of cash income and none of these households were at risk because of the harvest failure. Two factors help to explain the continuing importance of this cash source. The number of non-mining job holders outside Lesotho is still increasing according to the Central Bank of Lesotho so while the number of miners working in South Africa has dropped rapidly, the total number of workers outside Lesotho has partially compensated for the loss of mining jobs. Secondly, the average earning for Basotho miners has increased steadily in real terms since 1989. These findings are very much in line with the Sechaba consultants 1999 household survey which recorded 56 159 households receiving income from mine work and 27 188 households having income from other work in South Africa. Altogether, an estimated 25 percent of all households in Lesotho received income from South Africa.

The second most frequently mentioned main income source was the sale of livestock and other agricultural produce and this provided the main coping mechanism for over 20 percent of households. Furthermore, roughly 20 percent relied on full-time work in Lesotho, running small businesses for cash income, and almost 20 percent had a satisfactory, though less reliable, source of cash from casual or part-time jobs.

Taken altogether, these four categories of main income sources meant that at least 85 percent of households anticipated an adequate income to buy in food. Almost all rural families buy significant amounts of food in a normal year. This year, most will have to buy more, but provided prices do not rise too much, they will get by.

5.3 Those most in need

This situation leaves about 15 percent of households which have lost their crops entirely and have neither livestock nor off-farm income with which to buy food from the market. Some may have just started self employment enterprises and they are not sure how those will prosper, others may have adult children away looking for work in urban centres in Lesotho or South Africa, while others have married children in employment but they are not sure if they will receive any help from them. Some are entering the informal sector, brewing beer or getting involved in petty trade. Targeting the really needy from within this potentially vulnerable 15 percent is going to be crucial. Several farmers reported only being able to plant quite small areas because they had been sick and as these limited areas have only produced poor harvests, their problems have intensified. There was no evidence to link these farmers' illnesses with HIV, but given the high estimated prevalence of HIV/AIDS infections in Lesotho (24 percent among those aged 15-49), it is reasonable to expect that low plantings due to illness will become an even bigger problem in the future. Pending the results of the recommended food needs survey, the number of households in critical need is provisionally estimated at 5 000.

5.4 Lessons from the past and targeting the needy households

Target a smaller number of really needy households. During the early to mid 1990s, there were several major drought relief operations in Lesotho. In 1995-96, over 600 000 people received drought relief and perhaps another 250 000 benefited from free school meals or FFW schemes. This means a third of the population received drought relief and when you include the other food aid projects it could be that almost half the population received some form of food assistance. Evaluations of these projects suggested that the food aid played an important role in stabilizing the food security of many households but many families who were not really in need also received food aid. That is why it should be aimed to provide a much smaller amount of food aid this time and to redouble efforts to target this aid more accurately.

Promote better understanding of who are to be targeted. Previous drought relief programmes were criticized for not being sufficiently transparent with the result that they were not well understood in many villages. Given the large scale of previous operations, many villages had most of their population receiving drought relief. The few not receiving aid could be understandably aggrieved if they had received nothing but had also lost crops due to drought. This time, there seems to be an apparent consensus that only a limited number of households need support. Better information about any relief activities needs to be made available throughout communities (perhaps including radio broadcasts and villages pitsos) so that everyone understands that help must reach the most needy households who have lost their crops.

In the past, such huge numbers have been involved, that detailed screening of the most needy was impossible. It would have required too much time. Working with Village Development Committees, NGOs working locally and community based organisations as well as the relevant government departments, it should be possible to identify a limited number of households potentially at risk. These could then be screened using a modified version of the 1995 vulnerable household registration questionnaire (it will need to be updated for inflation). Those not really in need can be screened out and the remaining potentially at risk households could then be investigated in more detail using agreed criteria.

The situation of children

In general, during field visits, children were observed to be healthy and well fed. This was in part attributed to the school feeding programme, which provides free school meals to children in the mountain schools. As already reported, the mountain districts of Mokhotlong and Thaba-Tseka were experiencing the poorest harvests, so school feeding will be particularly important in these districts. Every effort should be made to ensure that school feeding runs as effectively as possible. Of course school feeding does not directly benefit under 5s nor does it always benefit the poorest and most needy children. But now that the first two years of primary schooling are free, it should help most children in that age range. Also from January 2002 the third year of primary school will be free, thus more children will benefit. As schools are closed from 1 June through to 18 July, children will not be getting school meals during this period but the overall effect of the school feeding programme is that it provides a useful supplementary input into the total food pot of many households in the mountains.

While it was reported that children generally seemed quite well, this was a conclusion from casual observation rather from any reliable data. As children under 5 are typically at risk from food shortages, the situation needs to be watched carefully. In conjunction with the Ministry of Health, UNICEF is planning to monitor the nutritional status of under 5s at 30 sentinel stations distributed throughout Lesotho. This is an invaluable initiative to help assess the evolving situation

The Mission recommends that a rapid survey be undertaken in the four affected districts (Mokhotlong, Thaba-Tseka, Mohale's Hoek and Quthing) to identify, quantify and precisely target the at risk households for food and seed assistance. It is recommended that the survey be jointly undertaken by Government, WFP and FAO's Special Relief Operations Service (TCOR).

6. LONG-TERM STRATEGY FOR SUSTAINABLE AGRICULTURAL DEVELOPMENT

The declining cereal yields in Lesotho are the result of a combination of unfavourable climatic factors, worsened by poor crop husbandry practices. In the short term, emergency measures need to be taken, mainly the distribution of seeds and fertilizers to the farmers who have lost their crops this season.

Crop yields are in general very low in Lesotho because most of the cultivated soils have low levels of fertility and poor moisture retention capacities. As soil fertility has declined, yield levels have also decreased. In the mid 1970s average maize and sorghum yields were in the order of 1 400kg/ha. Today the average is 600-700kg/ha. Crop production is heading towards a serious crisis and could cease altogether if steps are not taken to reverse the decline in soil fertility. As recommended in the Soil Fertility Initiative Document, prepared for Lesotho by FAO (1999), what is needed is a participatory comprehensive approach that takes advantage of synergies of practices at field level, offering production, economic and conservation benefits. This approach would emphasise building of soil organic matter levels through proper use of inorganic fertilizers, manure and ash, coupled with intercropping of improved cereals and legumes, conservation farming and agro-forestry practices. The overall benefits are the improvement of soil structure and fertility, food security, cash incomes, dietary diversity and protection of the environment. The improved soil structure and fertility result in increased efficiency in plant nutrients uptake, thus enhancing the profitability of crop production as well as enabling crops to withstand drought.

1 The Central Bank of Lesotho annual and quarterly reports and the EIU Country Report (April 2001) are the main sources for this section.

2 FAO (TCP/LES/4554) Market Liberalisation in Lesotho - The External Marketing Environment, May 1996.