Civil Society Agriculture Network (CisaNet) has advised companies that heavily rely on maize as raw material for their production to revisit their strategies.
“It is important for these companies to go into contract farming with the farmers because that may give them sure supply of maize, but at the same time, provide a steady market for the farmers,” CisaNet executive director Tamani Nkhono Mvula said in an interview last week.
He said in times of maize shortage, the companies face challenges as there is competition for grain on the market, which subsequently pushes up prices of commodities they produce using the grain.
Nkhono-Mvula, however, observed that the companies do not grow their own maize because it is not economically viable to invest in maize production, looking at the risks involved.
“It does not make business sense other than just buying from farmers who most of the times produce with subsidised inputs,” he said.
In view of the deficit, government has outlined measures to contain the deficit this year.
Minister of Finance, Economic Planning and Development Goodall Gondwe, in the 2016/17 National Budget, said the country requires an additional 790 000 tonnes of relief food to support vulnerable people.
He said an additional 250 000 tonnes is required for sale in Agricultural Development and Marketing Corporation (Admarc) depot nationwide while another 250 000 tonnes is required to restock the strategic grain reserves.
Said Gondwe: “Government intervention to the current food crisis is a key priority area. In this respect, the budget includes an allocation of K35.5 billion for the purchasing of food.
“Our plans on how to address vulnerability to food shortages are normally based on estimates produced by the Malawi Vulnerability Assessment Committee [MVAC].”
He said out of the K35.5 billion, K6 billion is in support of winter cropping initiative to purchase maize from large-scale farmers through contract farming.
Gondwe said the allocation for maize procurement is in addition to the supplemental resources that Treasury continues to provide in the current fiscal year for immediate relief.
Apart from that, development partners under the Multi-Donor Trust Fund in Agriculture have indicated that they may provide additional resources specifically in support of winter cropping.