Government report damns FISP

A government report has painted a dark picture of the Farm Input Subsidy Programme (Fisp), stating that only 26 percent of the agricultural inputs have been dispatched.

The report—from the Ministry of Agriculture, Irrigation and Water Development—confirms The Nation’s recent investigations that exposed serious problems enveloping Fisp, including lack of transport to move the inputs, a crawling distribution rate and the absence of coupons that beneficiaries use to redeem fertiliser and seeds.

According to the report, the dispatched 26 percent include both 23:21:04 fertiliser, also known as NPK; and Urea. The former is applied roughly two weeks after planting.

This means that out of the budgeted 150 000 metric tons or 3. 8 million 50kg bags of fertiliser to benefit 1.5 million smallholder farming families, only nearly 40 000 metric tons or 800 000 bags have been dispatched.

With each family getting two bags, it means that by the time the report came out last week, only about 400 000 households may have the chance of getting the inputs now even as the rains have started and most growers have planted.

That leaves roughly 1.1 million anxious poor farmers unsure of how the season will pan out for them.

That unease should spread to food security and economic policy watchers given the impact of maize’s output on household food assurance and macroeconomic performance.

Weak national yield could impact on the country’s economic growth targets given that agriculture accounts for more than 30 percent of gross domestic product (GDP).

The 2014/15 National Budget estimates that the economy will expand by 6.3 percent in 2014 on assumption that inflation rates will fall steadily, foreign exchange will be available and, most importantly, that there will be higher crop production.

Growth is projected to moderate to 5.8 percent in 2015—again on assumptions similar to those of this year.

With food contributing 50 percent to the consumer price index (CPI), low harvests—especially for maize—could also cause an inflation spike.

Government expects inflation to decline from the 2013 levels of 27.3 percent to 19.4 percent and 9.9 percent in 2014 and 2015 respectively, again, on assumptions that there will be increases in agricultural output and that monetary policies will be prudent.

But with Malawi’s inflation rate sharply reversing course in August—rising to 24.5 percent from 22.3 percent in July after seven months of gradual decline—prospects of a mediocre crop output could worsen the general rise in prices, what with a kwacha currently collapsing against major trading partners, especially the green buck. Over the past two months, the local unit has shed over 21 percent of its value.

Higher inflation may also mean over-the-roof interest rates as monetary authorities will keep the cost of borrowing expensive to curb money supply—all these could further suppress economic activity and deepen poverty levels.

That has already started happening, with the Reserve Bank of Malawi (RBM) last week hiking the bank rate from 22.5 percent to 25 percent and the Lombard rate from 24.5 percent to 27 percent—a move that may hurt the only other important source of growth should agriculture fail: the private sector, as borrowing rates become too high for business survival.

But in the face of a looming Fisp crisis and potential resultant hunger and economic disaster, Principal Secretary for the Ministry of Agriculture, Irrigation and Water Development Erica Maganga was optimistic in an interview on Thursday.

She said government will have covered most of the districts before the rains start in earnest.

Despite that 23:21:04 fertiliser requires that application be done while planting, Maganga said farmers’ production will not be delayed by this.

“Technically, that is recommended, but some farmers prefer to apply after the maize has come out and so we are still optimistic about this. We know that there has been a delay, but it will not affect the overall production,” she said.

But chairperson of the Parliamentary Committee on Agriculture, Felix Jumbe, described this year’s Fisp management as “the worst”.

He warned in an interview on Thursday that the delay is a recipe for disaster as agricultural production could decrease drastically.

Said Jumbe: “As it is now it is a huge percentage of smallholder farmers who have not received the fertiliser—meaning they are in panic and wondering if they will get it in time for the planting season.

“Secondly, if government decides to dispatch fertiliser after the rains, it means most roads will be impassable [and affect distribution] due to the rains, signalling poor harvest.”

According to Jumbe, it will not be possible for government to make the deliveries in time before the planting rains.

Parliament and farmers are not the only ones angry at the mess that is this year’s Fisp—donors too are agitated.

Days after The Nation revealed problems rocking the programme, we also divulged that donors have written government, demanding explanations on several issues around the scheme’ management.