Malawi Economic Justice Network (Mejn), which recently proposed that government increase Farm Input Subsidy Programme (Fisp) beneficiary contribution from K500 to K 6 000 per 50 kilogramme bag of fertiliser, has welcomed plans by government to institute the reforms.
Minister of Finance, Economic Planning and Development Goodall Gondwe has reduced the Fisp budget from K59 billion in the 2014/15 National Budget to K40 billion in the proposed 2015/16 financial plan in a move analysts have described as ‘rational’.
Mejn executive director Dalitso Kubalasa said while he was yet to fully comprehend the meaning of the reduced budget when the number of beneficiaries remains at 1.5 million, it was refreshing to hear government concede that Fisp has challenges and move to reform the programme.
Said Kubalasa: “We want to believe that government will articulate and go all the way to bring the contribution of the Fisp back to the initial 30 or 45 percent by beneficiaries (from the current 3 percent) as was the case when it was starting.”
Mejn hoped that details of the rationale behind the decrease would be contained in the budget documents.
Kubalasa advised government not to waste any more time in instituting Fisp reforms.
He said: “Malawi still has the potential to achieve its desired development aspirations, but we need to be rational and decisive, always thinking of the next generation and not the next general election.”
Gondwe has allocated about K133 billion to the Ministry of Agriculture, Irrigation and Water Development and hopes to reduce the budget further when consultations on Fisp are concluded ‘soon’.
On Fisp allocation, Gondwe said: “It is intended that the cost of the programme should be limited to K40 billion in the 2015/16 financial year.”
The minister conceded that Fisp is encountering challenges, among them a declining proportion of beneficiary contributions from 45 percent 10 years ago to three percent last financial year, and difficulty by government to control mark-up prices dictated by suppliers and distributors of inputs, costing government more than it budgets.