Challenges of the 2016/17 Farm Input Subsidy Programme (Fisp) continue to haunt the government as it still owes seed suppliers about K800 million.
In the planning for the 2016/17 Fisp, government counted on donors to come in and support the seed component of the programme in full as it had done in the past. But when this did not materialise, government was expected to settle the unbudgeted K800 million bill to suppliers.
While the seed component was not part of the K33 billion budget for Fisp in the 2016/17 National Budget for the Ministry of Agriculture, Irrigation and Water Development, then minister responsible George Chaponda told the media in October last year that the development partners had contributed about K3.6 billion (approximately $5 million) towards the purchase of seed.
About 24 seed companies were identified to supply improved maize and legume seeds to the 2016/17 Fisp.
The K800 million debt update was disclosed when a member of the Budget and Finance Committee of Parliament, Elias Chakwera, yesterday asked officials from the Ministry of Agriculture, Irrigation and Water Development to outline any budget shortfalls encountered under Fisp.
He said: “What were the budget shortfalls which were experienced and are there any bills left to settle?”
In response, the ministry’s chief director, Bright Kumwembe, confirmed that some seed suppliers were owed money.
He said: “We owe seed suppliers about K800 million because at the point of budgeting for Fisp, we envisaged that cooperating partners would assist us on the seed component as they had done in the past years, but this expectation was only met to an extent.”
He said the funding sourced to fill the gap was not enough to satisfy all the seed contracts; hence, the money owed to suppliers.
Kumwembe added that the seed suppliers should expect to be paid their money in the course of next month, September, ahead of the identification of new suppliers for the 2017/18 season.
He said to avoid the 2016/17 scenario, government had planned to meet all costs related to Fisp, including the printing of coupons.
Fertiliser suppliers also failed to reach difficult-to-access areas of the country before the onset of the rains, a development that negatively impacted access to the soil enriching commodity by beneficiaries.
Kumwembe said an evaluation of the performance of the fertiliser suppliers indicated that most clung to main supply routes to avoid the challenges experienced in hard-to-reach areas.
Fisp was introduced in the 2005/06 farming season to help achieve household and national food security by subsidising the cost of production for at least 1.5 million smallholder farmers. The programme has, however, undergone changes that have seen the number of beneficiaries reduced to 900 000 from last year. n