Projections of the economic impact for the near future

The projection in Table 9 is based on an assumed increase of AIDS deaths and sickness of 70 percent. The expenses due to the epidemic will not proportionally rise in all affected departments.

Table 9: Cost increase due to HIV/AIDS from 1992-93 to 1995-96
Description Costs 92-93 Increase Costs 95-96
(US $) (%) (US $)
Lost workforce 148920 70 253164
Extension of expatriates 60000 100 120000
Medical Department 70124 70 119210
Funerals 24314 70 41333
Pensions for death +early retirement 75184 0 75184
Repatriation 59448 70 101061
Training 35208 100 70416
Total 473198 780368

Source: Haslwimmer. 1994

The projected costs caused by HIV/AIDS could rise until 1995-96 to 3.1 percent of the total costs. But two variables could influence these costs more dramatically than is indicated in Table 9. These development of the Zambian and Southern African labour market and production losses.

At the lower end of the skills spectrum in Zambia, labour is abundant. HIV/AIDS will not reduce this labour force to such an extent that labourers at this level become scarce. On the skilled and professional level, the market is much thinner and is influenced by various factors. It is only since 1991 that the Zambian Sugar Company has offered competitive salaries compared with other employers in Zambia. In the past the company had found it difficult to attract highly qualified people, in particular engineers, who preferred to work in the Copperbelt. The Estate's rural setting also appears to be a disincentive in terms of attracting qualified people and attractive housing facilities are also lacking at NSE. Moreover, because Zambia's neighbours, particularly South Africa offer better salaries, many highly qualified Zambians prefer to work abroad. AIDS will contribute to the tightness of the labour market, especially as the disease has claimed a number of people among the ranks of professionals.

It is also possible that professional salaries will increase. This also means that, for example, an extra 20 percent increase for the salaries of professionals could to be included in the cost estimates for 199596.

5.9 The impact of HIV/AIDS on the Kaleya Smallholder Company in Zambia

Kaleya Smallholders Company Limited is a smallholder settlement scheme established to develop 1 885 ha of sugar cane in the district of Mazabuka in Zambia. Two-thirds of the area is settled by 300 smallholders and one-third remains a nucleus estate. The target annual cane production is 200 000 tonnes - 15 % of the national output.

Currently 1 782 ha have been planted and 140 smallholders settled. The company supplies the smallholders with training and extension services, agricultural inputs and mechanical services, arranges cane harvesting and haulage and distributes irrigation water. The smallholders are responsible for 4 ha of sugar cane, with family members caring for the infield irrigation, weed control, fertilizer application and removal of diseased cane stalks. The cost of all direct service is charged to the smallholders. Kaleya pays the growers for standing cane, with the price related to Nakambala's production costs.

The cane is sold by Kaleya to the Zambia Sugar Company which processes the sugar cane. The terms of the sale are determined by a cane purchase agreement negotiated between Zambia Sugar Company and three outgrowers (Kaleya, and two private farms). Currently the Kaleya is controlled by the founder shareholders - the Commonwealth Development Corporation, Zambia Sugar Company, the Development Bank of Zambia and Barclays Bank of Zambia. Ultimately it is intended that all of the ordinary share capital of Kaleya will be purchased by the smallholders who will become the owners.

It appears that the smallholders are equally or worse affected by HIV/AIDS than the population of Mazabuka. The smallholders come from different parts of Zambia, many having previously lived on the Copperbelt, which is characterised by very high rates of seroprevalence. Being a smallholder in Kaleya is an attractive occupation which provides a relatively high income (in comparison to most of the rural population). Polygamy is widespread among the cane growers and marriages are reputedly very unstable. At the time of this study, 14 out of the 140 smallholders and their families were suspected of having died of AIDS.

Box 12: Case study 6

Eleanor is a 24-yeas old widow. She has three young children of her own and one son of her late husband. She and her husband came to Kaleya some years ago.

Her husband died in July 1993 aged 36, most probably from AIDS. While her husband was ill with AIDS Eleanor nursed him. As a result she did not have time to produce enough maize for her family's consumption. Added to this the yield of sugar cane was low last season, which Eleanor believes is due to the age of the cane and not because of a labour constraint. Next season her yield is likely to be even lower. Eleanor employed part-time workers to undertake irrigation works on her plot but because she does not know enough about irrigation in sugar cane, she could not control the work properly. Although she had asked the local extension service for advice, at the time of the interview nobody had been to visit her.

Eleanor believes, that she and her late husband's sixteen year-old son could manage the farm in the future. However, although she and the son are the official holders of the settlement, her in-laws have been pressing to gain control of the farm. Now she is afraid that she is bewitched.

The smallholders rely mostly on family members for their production activities, but they also hire labour. Labour, which is provided by family members, who fall sick and finally die of AIDS, cannot be as easily replaced as on an estate. As observed frequently in many of the small farming systems described earlier, care for patients at home, attendance at funerals and the loss of management skills, all contribute to the labour constraints of an AIDS-affected household. But all households are not equally vulnerable.

For example, one farmer who was interviewed, and is probably suffering from AIDS, has several grown-up children, who now do all the work in the fields. The death of the father would not necessarily have an effect on sugar cane production, because there is still enough labour force and the father's knowledge has already been passed on to his children. However, the death of the most experienced person in a household, especially in the production of sugar cane, can have serious consequences, especially where the remaining family members do not have the necessary farm management skills, as in the example below of case study 7.

Box 13: Case study 7

Justin is 22 years old and has three brothers aged 24, 20 and 16, and two younger sisters are at school in the Copperbelt. In 1986 his parents came from the Copperbelt as smallholders to Kaleya.

In 1989 Justin's father died of AIDS. Two brothers were forced to leave school to work on the family farm. With their help and the employment of part-time labourers sugar cane production could be maintained under the management of the mother. In 1990 Justin's mother also fell sick and returned to the Copperbelt with her youngest child. In 1991 both his mother and the child died and all the children left Kaleya for one month to attend the funeral in the copperbelt. During that time the neighbours assisted in caring for the farm, but they were unable to carry out the farm work as effectively as Justin's family. As a consequence, yields declined by 40 percent in 1991 and the household's income suffered accordingly.

Since then production has begun to increase once more but has not yet reached its previous level. It appears that once sugar cane yields drop significantly, it is very difficult to reach previous levels. In 1993 the household was are also able to produce enough bags of maize for themselves to eat.

The most vulnerable households are those with a high dependency ratio, since widows will frequently loose many of their possession when, by traditional custom, the husband's relatives arrive soon after the death to claim all the household possessions.

5.10 The impact of HIV/AIDS on the Tukuyu Tea Estates in Tanzania

The Tukuyu Tea Estates are located near the Ushirika minor settlement in Tanzania. Covering an area of 1 530 ha they consist of seven estates with two factories among them. The estates have a permanent staff of 1 200 and employ an additional 2 000 labourers during the peak tea picking season. Most of these casual labourers come from neighbouring villages.

Although there have only been two confirmed cases of AIDS to date, the general situation of the Tukuyu Estates renders them potentially vulnerable. HIV/AIDS can affect this estate as in the cases of those described above in Zambia since they depend on the availability of trained manpower. It takes a long time and significant resources to train an expert. Thus experienced workers are difficult to replace.

Since the Tukuyu Estates are located on the highway to Malawi and close to two settlements and the town of Tukuyu, there is a lot of contact with urban and more densely populated areas, one of which, Ushirika is considered to be a high-risk area. Whether by chance, or partially as a result of the preventive measures taken by Tukuyu Tea Estates to date, AIDS has had a minimal impact on the company.

The preventive measures that may be in part responsible include the supply of condoms to male workers (although such supplies are irregular) and the establishment of an AIDS education programme using television and videos. At the same time the company offers its employees free lunches, medical care and clinic facilities. Child nutritional status is reported to be good.