‘Malawi has enormous trade policy space on food security’

Malawi has enormous trade policy space to manoeuvre to ensure food security and protect poor farmers without breaching trade rule a trade expert Victor Mponda-Banda said.

He was commenting in an e-mail on the recent World Trade Organisation (WTO) agriculture talks that, among others, discuss the substance of a proposal by G-33 members to loosen price support disciplines for developing countries, public stocks and domestic food aid.

The WTO informal talks held in March this year would also discuss a proposal for prices that are guaranteed to producers under programmes—for resource-poor, low-income farmers and for food security — to be categorised as “green box” support and therefore allowed without any limits.

Green box support is domestic support for agriculture that is allowed without limits because it does not distort trade, or at most ,causes minimal distortion.

In an e-mail responding to a questionnaire, Mponda-Banda said there is undiluted trade policy space to support resource poor smallholder farmers and to ensure food security for Malawi.

“In as far as Malawi is concerned, there is enormous policy space for our resource-poor smallholders and to ensure national food security. As long as there is no injury or threat of injury, to other WTO member States, we can utilise the existing policy space for optimal policy interventions to realise sustainable food security equilibrium,” said Mponda-Banda.

Malawi has an export ban on agriculture produce such as maize, a policy some experts contend discourages serious investors into the sector. However, the Ministry of Industry and Trade has so far argued that food security comes first.

Regardless of the ban, Malawi this year experienced an acute shortage of maize on which the blamed has been placed on the hoarding of maize stocks, informal maize exports and dry spells experienced in some parts of the country.

According to the Grain Traders and Processors Association, Malawi lost 140 000 metric tons of maize between January and March this year through informal exports.

However, Mponda-Banda said Malawi can apply measures to avert threats.

“In accordance with provisions of the agreement on agriculture, Malawi just like any other WTO member, can apply measures to arrest any threats of serious food shortages, as long as Malawi adheres to the WTO principle of transparency in the introduction of the measures such as the export bans,” said Mponda-Banda

However, he noted that, Malawi is still classified as a least developed country and therefore qualifies for special and differential treatment that has more lenient obligations which are stipulated in most agreements.

He added that besides the green box measures, there are defined development measures designed to encourage agricultural and rural development. These he said include investment subsidies for agriculture in developing countries, agriculture input subsidies available to low-income and resource-poor producers in developing countries.

G-33 countries, otherwise called Friends of Special Products has proposed among others an amendment to the agriculture agreement to loosen disciplines on domestic support. The group which comprises 46 WTO members, but does not include Malawi, among other includes Botswana, Congo, Kenya, Madagascar, Mauritius, Mozambique Tanzania, Zambia and Zimbabwe proposes a free hand.

Notably, the group proposes to loosen price support linked to public stockholding and food aid in order to enhance food security and support poor farmers.

The G-33 proposal would thus give developing countries a relatively free hand to use price support, arguing that present WTO disciplines will become a constraint on their ability to implement these programmes.

The group feels stockholding programmes are the best way to ensure food security for its populations, and that administered prices are needed so governments can compete with the private sector to buy the produce, to stimulate production and ensure food is available, to ensure some farmers are paid enough, and to shield farmers from the effects of rapidly rising and falling prices.

However, other WTO members are concerned that without disciplines, some ways of implementing the programmes could distort markets — inflating the prices farmers receive and the quantities they produce, and ultimately depressing world prices.