Parliament yesterday learnt that the Farm Input Subsidy Programme (Fisp) allocation in the proposed 2016/17 National Budget has gone up from K40 billion (about $57.7million) to K43.5 billion (about $62.7million) in a bid to factor price fluctuations.
Minister of Finance, Economic Planning and Development Goodall Gondwe announced the development in Parliament during the on-going Committee of Supply where members of Parliament (MPs) scrutinise allocations vote-by-vote.
He said: “The increase has been factored in after considering the fluctuation of the kwacha [exchange rate] and since we buy fertiliser in foreign currency, we thought the adjustment would be essential.”
Gondwe further announced that the Multi Donor Trust Fund (MDTF) has pledged to give about $5 million (about K3.5 billion) for the seed component.
In an interview later, the minister said he has added the K3.5 billion because price estimates have changed and fertiliser will cost a little bit higher than estimated due to the fluctuation of the kwacha exchange rate.
In response, Felix Jumbe, chairperson of the Parliament’s Agriculture Committee, asked that the K199 billion allocation to Ministry of Agriculture, Irrigation and Water Development be deferred to allow for more deliberations.
However, Gondwe dismissed the call, saying government is doing all it can to not only supply the country with enough maize, but also support those facing food shortages.
Introduced in 2005 to boost food security, Fisp has in recent years come under mounting criticism from experts who argue that it does not give the desired results.
This year’s Fisp allocations come amid a review that saw the number of beneficiaries cut by 40 out of every 100 from 1.5 million to 900 000.
The Fisp budget itself, at the initial K40 billion, is down from the 2015/16 revised estimate of K63.9 billion (about $92.2million).
During debate on the agriculture sector allocations, Rumphi East MP Kamlepo Kalua (People’s Party-PP) wondered why the Northern part of the country does not have as much allocation of boreholes compared to the Southern part.
In response, Gondwe said: “We will be distributing about half a billion kwacha [K500 million] to district councils to decide where boreholes are needed because the needs per district are not equal that is why we are leaving the decision to the district council. Probably we will find that the money is not enough and it is only then we will decide what to do.”
Earlier on, Gondwe deferred National Local Government Finance Committee and Ministry of Lands, Housing and Urban Development votes. n