Govt sticks to K27 000 fertiliser price
Ministry of Agriculture says it cannot adjust the subsidised price of fertiliser under Affordable Inputs Programme (AIP) beyond the K27 000 it is offering because doing so can balloon the budget.
The ministry said this on Monday in reaction to a proposal by agriculture think tank, Mwapata Institute, for government to review the price to end the impasse with some private suppliers. The stand-off has affected implementation of the programme and left beneficiaries struggling to source the soil enriching commodity at the time rains have started.
In its report, Mwapata said “there are simply no subsidised fertilisers for most registered beneficiaries across the country” due to the absence of some large agro-dealers who are not participating because of the low price offered.
The institute said the development has significantly limited the quantities and the outlet options available to farmers as both Admarc and Smallholder Farmers Fertiliser Revolving Fund of Malawi (SFFRFM) can only distribute their allocated share which is estimated at about 34 percent of the subsidised fertiliser needed in the country.
Reads part of the report: “We recommend government to urgently resolve the current impasse with the private sector. Resolving the impasse will enable avoidance of late planting and application of fertilisers, which could result in a substantial reduction in national maize production.”
The report also suggested that, alternatively, farmers should be provided with better options for accessing their entitled share of subsidised fertiliser through reallocation of the abandoned private suppliers’ shares to Admarc and SFFRFM.
Further reads the report: “At this point, options for resolving the impasse are getting slimmer with further delays. At the moment, a reasonable key would be for government to adjust the price for AIP fertilisers to K30 000 per 50kg bag. This price will enable the fertiliser suppliers to cover their costs and supply the fertilisers to the waiting farmers.”
Most established agro-dealers with nationwide networks and are members of Fertiliser Association of Malawi have not signed the contracts because they feel the price is on the lower side.
The association’s executive administration officer Mbawaka Phiri said out of 20-member companies, less than 10 have signed the contracts.
In a written response, Ministry of Agriculture spokesperson Gracian Lungu said increasing the price to K30 000 as proposed by Mwapata or K35 000 as demanded by the suppliers was not government’s option.
He said: “Much as the redemption rate remains below 50 percent as of today, government remains hopeful that we will still reach out to all targeted beneficiaries.
“The decision to peg the price at K27 000 is in tandem with budget allocations and public coffers. Pushing the price to K30 000 can be disastrous to our Account Number One as this will push the AIP budget. For this reason, the ministry still holds to its decision of K27 000.”
Lungu said more suppliers under the Fertiliser Association such as Paramount Commodities and Paramount Holdings, Chipiku and Afriventure Blantyre Ltd have now started selling under the same price.
Rolled out in the 2020 agriculture season, AIP, just like its predecessor Farm Inputs Subsidy Programme implemented under the Democratic Progressive Party, has been beset by problems mainly bordering on logistics.
President Lazarus Chakwera launched this year’s K140.2 billion AIP on October 16 2021 and is expected to benefit 3.7 million smallholder farming households.
