The Mozambican Executive will implement a package of fiscal and social measures aimed at boosting the agricultural sector, with a special focus on smallholders and on regions vulnerable to climate events. Among the planned actions, the reduction of the energy tax for agricultural activities and the exemption from Value Added Tax (VAT) on agricultural production and inputs for irrigation stand out.
The plan, part of the Economic Recovery and Growth Plan (Prece), approved in September, also includes strengthening access to agricultural inputs for family-sector producers, particularly families affected by climate events in the north of the country.
As part of social protection and risk mitigation, an agricultural insurance programme will be introduced to protect smallholders against losses resulting from natural adversities. The programme will be funded with subsidies that could cover up to 70% of the total cost of the insurance. The initiative will be implemented by the Ministry of Economy, in collaboration with the Mozambican Insurance Company (Emose) and the World Bank.
Mozambique currently has more than 4.5 million farms, the overwhelming majority of them small-scale, operating on plots of less than two hectares. The Government believes these measures will bring substantial gains in productivity per hectare and greater economic resilience for rural households.
