The African Union Commission (AUC) has warned Malawi against allocating more funds for Farm Input Subsidy Programme (Fisp), saying the trend has potential to negatively affect other areas in the agricultural sector.
Speaking in Addis Ababa, Ethiopia during the ongoing Inaugural Conference of the Specialised Technical Committee (STC) on Agriculture, Rural Development, Water and Environment, AUC commissioner for agriculture and rural development Tumusiime Rhoda-Peace said Malawi needs to further subsidise the impacts by attaching a fee to it.
Her remarks come days after the International Monetary Fund (IMF) mentioned the K40 billion Fisp allocation as one of the costly subsidies in the K930 billion 2015/16 National Budget that needs to be trimmed.
She said: “Agriculture is a necessary evil, especially in Africa. But where you have over 80 percent of the population relying on agriculture, I think it is always a good idea to attach a fee to it.”
According to Rhoda-Peace, governments should also buy the fertiliser and seeds in bulk to reduce on costs. She further reiterated the importance of involving private sector groups in the purchase of fertiliser.
She said governments must take a leading role in regulating fertiliser as these further strains the smallholder who already struggles to get money and buy fertiliser.
Minister of Agriculture, Irrigation and Water Development Allan Chiyembeza has since defended the increase in the amount of redeeming the subsidy from K500 to about K8 000, but has rejected calls from civil society groups and other commentators to abolish the programme.