Subsidies amid a food security hitch

We all love subsidies especially if you are on the receiving end. Not only do they happen in this country, but elsewhere as well. The only difference is subsidies tend to have different names. You cannot rule out the politics of the subsidy for those folks riding the Brexit wave. Think of the National Health Service (NHS) and other many free things at the heart of the Brexit campaign. I think it played a great influence.

Often, they are contentious to the extent that even in the God-fearing Republic, no elected leader, regardless of the divide can garner the courage to go flat and call for its end. Neither would many people amid the current food crisis. It is human after all to have that compassion. The only problem is that someone somewhere has to pay some tax. It is either here or beyond the borders and it comes in different forms but as cash to finance whatever that is being provided for free or nothing.

That is why sometimes each one of us opens our eyes, that some textbooks riding dinosaurs often own a moral compass that subsidies are wrong because it fits a model. Not always the case, and as we have seen over the years, the initiative attracted huge support of its fierce critics with some monopoly of wisdom over economics. Late president Bingu Mutharika proved it and it delivered and the rains defected to his side.

With the agriculture vote done and worst food crisis around, it is time to continue to reflect on how best Farm Input Subsidy Programme (Fisp) can work. Even better, if variants of Fisp can prove effective. Except when there are adequate rains, a fertiliser subsidy does not work. Similarly it high or low tobacco prices mean the same thing even our demand for good services is increasing as a result of a population explosion underway. Maybe this is a strange parallel but if one can think about it, some similarly is apparent, but requires the precision of an eagle’s eye.

The point is straight. We could be subsidising the wrong group of farmers in our quest to achieve food security. But for other reasons, the majority of subsidy recipients have a strong voice on who wins an election, though this is debatable given our voting patterns. We know how we vote so such a gamble is worthwhile.

The reality is that farming has been left to the unproductive or better said, those that can farm seriously do not do it. That feeding the country, whose population growth is alarming is still left in the hands of wooden hoe peddling farmers.

Similarly, the majority of foreign exchange generated in the country is at the hands of the same farmers, major recipients of the subsidy. The tiny minority is involved in paying or dodging taxes and demanding foreign exchange. Nothing wrong of course, but if only we can get those with the means to farm motivated through a different subsidy to secure food stocks why not.

Admarc is still functional so are the Strategic Grain Reserves (SGR). If there is a crop failure these reserves cannot fill up. One way is to get selected farmers to grow strategic food crops such as maize and pulses on contract with a guarantee for purchase by these State organs by drawing resources from Fisp. Ideally, the reality is that there is a guarantee for a market to such a grower, and it is natural that they would easily invest in other technologies such as irrigation, a well as sand lullaby that has been slow.

There is a difference between a smallholder farmer that cultivates his hectare every year for food and the commercial farmer with a guaranteed market to supply to SGR. In times of a food crisis such as this one, it would be easy to use supplies from such farmers. A guaranteed market gives the buyer some leverage in getting a fair price but at the same time motivates growers focused on reaping benefits of economies of scale. It’s not a zero sum game, but a rather candid win-win game.

All I can say, I do love some thinkers that reckon each problem has a set of solutions. Not all solutions are best, but can be ranked. Others are best while others are second best. In our case, the declining land size amid a rapidly rising population puts in question the Fisp approach to food security in case of drought. On the other hand, food contract farming with market guarantees through State agencies targeted at select farmers is an interesting alternative. Such farmers, by having a market guarantee would be naturally motivated and some of the resources from Fisp finance the purchase. It is all about getting the balance right.

By the end of the day, the overall policy is national food security and no one should be hungry. How crazy is this? Surely not.