Theft and abuse of Farm Input Subsidy Programme (Fisp) coupons has reached new levels with some vendors openly selling the otherwise free vouchers on the open market, investigations show.
During a fact-finding investigation funded by Oxfam and Integrity Platform, in Makanjira, Mangochi,The Nation’s journalist saw a poster advertising availability of Fisp coupons for sale at a shop. The notice read ‘Makoponi ogulitsa alipo’ and we bought two at K6 500 each.
The two coupons were later presented at a Smallholder Farmers Fertiliser Revolving Fund of Malawi (SFFRFM) depot at Sharpevale in Ntcheu to redeem bags of fertiliser.
From the transaction,three major problems were brought to light: the first was how the broken Fisp management system has allowed ineligible people to benefit from the programme at the expense of the struggling taxpayer.
The second is how government is being defrauded. Capital Hill’s fixed rate for redeeming a 50 kilogramme (kg) bag of maize is K15 000, meaning that the two coupons enabled anon-qualifying individual to have taxpayers pay K30 000 for his fertiliser. The farmer meets the difference between the commercial price at the supplier and the State’s subsidy.
The third problem involves deficiencies in the beneficiary identification as players ignore the laid down systems.
The Mangochi case is just an example of a much larger problem as Farmers Union of Malawi (FUM) said it has evidence that the illicit trade is nationwide and that even large-scale farmers are buying the vouchers in other districts.
When we reached Makanjira—a lake shore trading centre that borders Mozambique and lies from Mangochi Boma—our reporter posed as a poor farmer who has not benefited from the 2018/19 Fisp and could not afford to buy fertiliser at the commercial price of K20 500 for urea and K22 000 for KPN (23:10: 5+6S+1.0Zn)per 50 kg bag.
This was when a community member directed the reporter to a shop with the ‘Makoponi ogulitsa alipo’notice written on an A4 paper.
“How can I help you?” asked the shop owner, who identified himself as Rajab Kasim.
When asked about the source of the coupons, the businessperson was initially annoyed and threatened to kick our reporter out of the shop. But after convincing him that it was an innocent enquiry, Kasim later claimed that he got them from some Ministry of Agriculture, Irrigation and Water Development officials from Capital Hill, but could not reveal their names.
Days later at the same shop, our reporter met two men who said they had travelled all the way from Traditional Authority (T/A) Chowe, about 60km from Makanjira, to buy the coupons. They claimed that some vendors were also selling the coupons in their area, but they had run out of stock.
With the coupons we had bought, labelled ‘Mangochi’ and bearing serial numbers N0054852 for NPK and U0052482 for urea, we paid a top-up of K5 500 for urea and K6 500 for NPK at SFFRFM depot in Ntcheu. The amount represented the difference between the K15000 government cushion and the supplier’s fertiliser price.
However, local leader sand the police in the district were hesitant when asked about the Fisp coupons being on sale.
T/A Makanjira said: “I can not comment on whether this is happening in my area. But some of my community members, whose names appeared on the beneficiaries list, did not receive coupons for unknown reasons.”
Police in the area, about 20 km away, also feigned ignorance, with one of them saying: “I have worked in six districts, but Mangochi has proved to be a hard district to work in. The problem with communities here is that they defend each other. They don’t report issues to police and we strongly believe that this is indeed happening.”
Mangochi district agricultural development officer (Dado) Owen Kumwenda also said his office was not aware that some vendors were selling coupons on the open market.
But he could not rule out the unscrupulous trade, saying many traders in the district are connected to senior public servants.
He said for the 2018/19 Fisp, the district received 57 000 coupons, but 144 returned to the ministry headquarters in Lilongwe because the beneficiaries were not available during the distribution exercise.
In an interview on Wednesday this week, Ministry of Agriculture, Irrigation and Water Development spokesperson Hamilton Chimala said the ministry was not aware that some vendors are selling coupons. He also could not say what the ministry does with returned coupons as indicated by the Mangochi Dado.
Instead, he insisted that the 2018/19 Fisp is “very successful” compared to previous seasons.
But he said it is illegal for someone to access the subsidised farm inputs with a coupon from another district.
In a separate interview on Thursday, FUM president Alfred Kapichira Banda said it was not news to him that vendors are selling Fisp coupons meant for poor Malawians. He observed that the malpractice is widespread in almost all the districts.
He said: “This is not news to me because even here in Dowa, vendors are also selling Fisp coupons to medium and large-scale farmers. But government is paying a deaf ear. Our investigations show that vendors get coupons from some government officials to sell and they share the money afterwards.”
Government had put in place a system to ensure that registered beneficiaries are identified throughout the process, but our breach of the system shows a collapse.
Briefly, the process is supposed to work like this:
•Ministry conducts farming household updating, an exercise aimed at matching and verifying names of beneficiaries with their identities (IDs).
•During the coupon distribution exercise, the beneficiaries’ ID is recorded on the coupons.
•Suppliers are supposed to match the ID number recorded on the coupon against the original ID of the beneficiary before allowing them to access to the inputs at subsidised prices.
In Zambia, to eliminate fraud in a similar programme, they introduced an electronic coupon voucher which requires farmers to have a phone and deposit their contribution of 400 Zambia kwacha in the bank. They in turn get a code similar to an automated teller machine (ATM) card pin.
Revelations of vendors are selling Fisp coupons come against a background of Minister of Agriculture,Irrigation and Water Development Joseph Mwanamvekha telling Parliament that his ministry had solved challenges that arose in the Fisp coupons distribution and redemption exercise.
He told Parliament his ministry had detected 3 000 ghost villages.
Last week, police in Mchinji also arrested an agro-dealer for allegedly misappropriating money for Demeter Agricultural Limited and being found in possession of 61 Fisp coupons bearing Chikwawa District serial numbers, an indication that the unscrupulous trade is widespread.