Govt snubs ACB recommendations on AIP

Government has snubbed key recommendations aimed at reducing corruption and fertiliser supply disruptions in the implementation of the 2021/22 Affordable Inputs Programme (AIP), it has emerged.

Ministry of Agriculture spokesperson Gracian Lungu on Thursday acknowledged that government failed to implement some of the recommendations, but said it was due to technical challenges, including failure by private contractors to supply fertilisers.

The recommendations, made in the Report on the Monitoring of the 2020/21 Affordable Inputs Programme, included branding fertiliser bags, opening more selling points and removing incompetent suppliers.

The Anti-Corruption Bureau (ACB) published the recommendations after monitoring last year’s AIP management.

The aim was to tackle corrupt behaviours among stakeholders in the AIP, increase levels of awareness on corruption, investigate and prosecute corruption related cases, the ACB explained.

The report made 13 recommendations to the ministry which implements the AIP, a K141.9 billion programme that subsidises fertilisers and maize seeds for over 3.7 million subsistent farmers to achieve food security at both household and national levels.

In the report, the bureau suggested that the ministry, in collaboration with the Public Procurement and Disposal of Assets Authority (PPDA) and ACB, should vet suppliers to ensure that only those with capacity are awarded contracts.

A Nation on Sunday assessment has established that most of the ACB proposals were not implemented or were poorly done, creating room for the same challenges they were trying to avert.

The report recommended that “the ministry should ensure that bags for AIP inputs are labelled because this is very crucial in order to differentiate [AIP] fertiliser with commercial fertiliser to avoid cases where the AIP fertiliser is being sold to vendors on pretext that it is for commercial selling.

“The ministry should consider opening many selling points so that people should not travel long distances to buy the AIP inputs, [government] should consider engaging suppliers in good time to avoid delays in supplying the inputs.” 

The other key proposal was that the “ministry, in collaboration with the Public Procurement and Disposal of Assets [PPDA] Authority and ACB, should vet suppliers, ensuring that all suppliers who do not have capacity are not awarded contracts”.

Nation on Sunday assessment found that fertiliser bags were not labelled and that despite most parts of the country receiving the rains, some farmers were yet to access the inputs.

In his AIP update on December 27 2021, Minister of Agriculture Lobin Lowe said only 38.8 percent of farmers had accessed all the required fertilisers.

“To date farmers have accessed 143 992 metric tonnes [2 879 840 bags], representing 38.8 percent against the target of 371 411 metric tonnes [7 428 210 bags]. This translates into 1 439 920 farming households who have accessed two bags of fertiliser,” he told a press conference in Lilongwe.  

The minister also thinly admitted that some of the suppliers were struggling to supply the commodities.

“[One of the challenges is] absence of some fertiliser suppliers on the market. Admarc and SFFRFM [Smallholder Farmers Fertiliser Revolving Fund of Malawi] remain the only reliable suppliers and this has led to long queues in some shops,” he pointed out. 

In a written response, Lungu admitted that the ministry failed to meet some of the recommendations because of technical challenges.

He said: “ACB recommended that AIP fertiliser bags be labelled AIP but this was not considered [because] not all fertilisers which are sold on the market belong to government.

“The ministry sub-contracts the contracts to suppliers who source fertilisers from different areas. Labelling the bags as AIP would limit the suppliers as they would not sell such fertilisers on commercial market beyond the AIP delivery period.

“This can only be implemented in an occasion where government buys all the fertilisers on its own but again this would require extra funds and with the already suffocated AIP budget, implementation of this would still face a hiccup.”

On opening more selling points, Lungu said government had planned to double last year’s number but failure by some private contractors to supply the fertilisers had affected their plans.

He said: “In this year’s programme, government contracted 164 companies to supply 66 percent of the total tonnage of fertilisers with Admarc and SFFRFM allocated the remaining 34 percent.

“We allocated almost twice the total selling points we had last year where these 164 suppliers were supposed to operate but with the challenges these SMEs have been facing ranging from finances to procurement of fertilisers, our plan faced a challenge.”

On the need to vet suppliers, he argued that the ministry believes that it recruited the right suppliers despite most of them failing to fulfil their contractual obligations.

Lungu said: “Since this follows due diligence in different institutions like PPDA, the Reserve Bank of Malawi, Malawi Revenue Authority, Government Contracting Unit, Ministry of Justice and Constitutional Affairs and other stakeholders, the ministry believes that every supplier who was contracted passed the set conditions.

“The ministry believes that some external factors like global fertiliser price increases, fertiliser cartels in Malawi as well as financial lending institutions have in one way or the other affected smooth delivery of this AIP.”

However, Farmers Union of Malawi chief executive officer Jacob Nyirongo said government’s conditions on AIP implementation contributed to its failure to meet the ACB recommendations.

“On issue of struggles to open more selling points, government is offering lower prices than the suppliers expected. Much of the private sector that are participating also want to reduce on costs. For them to reach every selling spot, it reduces their costs,” he said.

Nyirongo said it was farmers who are paying the price as they travel long distances to access the fertiliser and “wait for days to buy as some suppliers are taking three weeks to stock the selling points”.

“The result is that the farmers will not be able to apply the fertiliser on time which may lead to reduced yields,” he said.

Nyirongo said government can improve the programme through proper planning and identification of suppliers.

“Labelling of AIP inputs, for example, is very important as it makes them protected commodities. But that cannot be done when suppliers are not identified in good time,” he said.

AIP is a Tonse Alliance initiative which succeeded the Farm Inputs Subsidy Programme implemented by the Democratic Progressive Party.

In the 2021/22 Budget, set to expire in March 2022, government allocated K142 billion towards the programme to benefit 3.7 million farming households. The AIP allocation represents half of the agriculture sector budget of K284 billion, according to data in budget documents.

Critics of the subsidy programme, including the World Bank and International Monetary Fund, argue that it is draining government resources as it is purely for consumption. In a separate interview, agriculture policy expert Tamani Nkhono Mvula said the developments surrounding this year’s AIP point to minimal success of the programme.