Hunger persists as Malawi spends K132bn on Fisp

Despite Malawi investing K132.7 billion (about $442.3 million) into the Farm Input Subsidy Programme (Fisp) since 2005, analysts have argued that the initiative has failed to ensure sustainable household food security and reduce poverty.

Budget allocations since the programme started in the 2005/06 financial year show a rising trend in financing Fisp. For example, in the 2012/13 national budget, the Ministry of Agriculture and Food Security budget got K68 billion, the second highest allocation in the budget after the Ministry of Education, Science and Technology which received K74.7 billion. Out of the Ministry of Agriculture’s allocation, K40.6 billion is catering for Fisp.

But eight years down the road, most of the beneficiaries—1.5 million smallholder maize farming families this year, up from 1.4 million in previous years—are failing to stand on their own and now feel entitled to receiving subsidised fertiliser permanently.

Ministry of Agriculture spokesperson Sarah Tione said on Wednesday that unless there was a technical report on the number of beneficiaries in both Fisp and food relief programme, it would be difficult for her to provide meaningful information.

“For example, the subsidy programme targets people across the country whereas food relief programme targets some parts of the country and the Southern Region in this particular case,” she said.

This year alone, 1.9 million Malawians need food aid, according to Famine Early Warning System.

Given that Fisp is essentially designed to target the poorest of the poor in society, the majority of the starving 1.9 million are likely from the very segment that the subsidy targets. Last year, 202 000 people were on food relief programme.

‘Programme needs to be changed’

Farmers Union of Malawi (FUM) president Felix Jumbe said in an interview this week that Fisp has not helped Malawians become food secure; hence, the programme needs to be changed.

Said Jumbe: “Government needs to come up with legislation that ensures that [we have] an export security strategy; Malawi industrial agricultural raw material security strategy and strategic grain reserve strategy. [We also need to] have a production system in place other than Fisp and this would allow banks to start giving commercial credit to farmers.

“There is need to design a new farm inputs credit system to replace the Fisp. Only a limited number of resource-poor farmers would be under this [new] programme. This [the new programme] is our suggested way of graduation [from Fisp]; otherwise, without this, then we have no choice but to live with Fisp until a good system of credit, similar to the ones that worked in the 1970s and 80s, is back.”

Jumbe said government also needs to redesign the marketing system of agriculture commodities to ensure that there is order and traceability and release Agricultural Development and Marketing Corporation (Admarc) to farmers through their cooperatives and have designated commodity marketing centres.

“Government needs to have an appropriate legislation for farmer organisations as key units for delivering extension,” he added.

According to Jumbe, in the 1970s through to the early 1990s, Malawi had two systems for delivering farm inputs to farmers which collapsed in 1993/4 season. The other system for the commercial farmers collapsed by the mid 1990s.

After multiparty democracy, Jumbe said government started a starter pack programme because hunger was getting on, but still due to high levels of corruption, no genuine seed or fertiliser was given to farmers leading to more hunger that killed more people in 2002.

The starter pack graduated into Fisp by the Bingu wa Mutharika government and because of the zero tolerance to corruption stand in his first term, good seed and fertiliser were delivered and Malawi produced surpluses since 2004/5 season.

“This was again a relief programme, but politicians found mileage in the programme and have always enjoyed prolonging it without thinking of sustainability,” said Jumbe.

At the recent International Monetary Fund (IMF)-Ministry of Finance Inclusive Growth Conference in Lilongwe, Society of Accountants in Malawi (Socam) outgoing president Lekani Katandula said Fisp should be phased out and divert the resources to other productive agricultural activities such as the Greenbelt Irrigation Initiative.

Reserve Bank of Malawi (RBM) deputy governor Dr. Naomi Ngwira also supported the phasing out of Fisp. She said the best way to help the poor should be through an income generation approach to food security and not the safety net approach that defines the Fisp intervention.

Press Corporation Limited group chief executive officer Dr Matthews Chikaonda said no individual develops with handouts.

Parliamentary Committee on Agriculture and Natural Resources chairperson David Luka, while supporting Fisp, said there is need to review the programme to, for example, include particular crops suitable for certain areas such Nsanje and Chikhwawa.

Luka also said households that fail to graduate after two years or so should be scrapped off because they are failing the programme.

“Do we really have to give maize and fertiliser to people in Nsanje and Chikhwawa and not sorghum, for example?” wondered Luka.

But former Finance minister Goodall Gondwe defended the programme, saying it was behind the high economic growth rates registered in Malawi between 2006 and 2010.

Since 2006, funding to Fisp has risen sharply. It was K2.2 billion in the 2005/06 national budget, jumped to K5.5 billion the following year, hit K10.7 billion in the 2007/08 fiscal year calendar and settled at K19.4 billion in 2008/09 (which was later revised upwards to K29.4 billion) before falling slightly to K17.8 billion 2009/10, the year the price of a subsidised 50-kg bag of fertiliser dropped further from that starting price of K900 to K500.

The Fisp allocation picked up again in 2010/11 to hit K19.7 billion, dropped to K17.4 billion in 2011/12 and more than doubled to K40 billion in 2012/13.