Kwacha depreciation to erode farmers’ income
The continued depreciation of the kwacha will likely erode further farmers’ income, the Famine Early Warning System (Fewsnet) has said.
Sales of cash crops are expected to allow most rural households to meet their livelihood protection and food needs, but with the depreciation of the kwacha, the income will not be enough, the March 2013 report has said.
“The local currency has depreciated much more than what was originally projected in January 2013. Instead of the exchange rate being at K320 per dollar at the beginning of March 2013, the actual exchange rate was at around K380 to the dollar. Continued depreciation of the local currency could result in further eroding any benefits that incomes from cash crop sales would bring to households,” reads the report in part.
The new harvest is expected to stem the rising food insecurity that households are experiencing due to high maize prices.
“Sale of cash crops from May is expected to generate enough household income so that livelihood protection needs are met.
“With food needs being met through consumption of own produced crops and livelihoods protection needs being met through the sale of cash crops, acute food insecurity is expected in the South and throughout the rest of the country from April to June,” reads the report.
In the March 2013 Malawi Food Security Outlook Update, Fewsnet says that harvests have already begun in the Southern Region and that from April to June, the food security situation will continue to improve as food and cash crops continue to be harvested.
In February, retail maize prices continued to rise across the country with average prices at 216 percent above the five-year average and 211 percent higher than 2012 price levels.
Over the past few months, maize prices have been rising, with a kilogramme selling at as high as K200 in several markets, including Nsanje, Chikhwawa, Lunzu, Thyolo, Luchenza, Phalombe, Neno and Mwanza in the Southern Region.
In the report, Fewsnet also noted that prices are expected to drop since harvests have already begun in some parts of the country.
However, the report notes that these prices are likely to remain above last year and current year levels.
Fewsnet is a United States Agency for International Development (Usaid)—funded activity that provides early warning and vulnerability information on emerging and evolving food security issues.
