United States of America (USA) Ambassador Virginia Palmer has urged Malawi to grow its economy by prioritising the agricultural sector where 80 percent of Malawians work.
Palmer said this in Blantyre on Friday night during the annual dinner and dance of the Institute of Chartered Accountants in Malawi (Icam).
In her remarks, she noted that many policies in Malawi approach agriculture as a social welfare sector, rather than an engine of private sector-led growth that can create jobs and reduce poverty.
Said Palmer: “Globally, yields have increased sharply. For example, global cereals yields increased almost two percent each over the past 60 years. But with the exception of some marginal gains in maize production, yields have remained stagnant here in Malawi.”
She said Malawi can benefit from an agricultural productivity revolution through improvements in land use and in biotechnology to produce more efficiently on ever shrinking agricultural land.
“Low farm gate prices mean farmers are not earning the full value of their efforts or a fair price for the crops they produce. Too often, low farm gate prices result from government policies such as export bans and other price stabilisation policies, as we saw during the last poll cycle,” said Palmer.
According to the diplomat, frequent government intervention in markets has also caused Malawi to have the most volatile food prices in eastern and southern Africa, which she said is not good for consumers or for industry.
Said Palmer: “Studies have shown that in the long run, such policies are counterproductive. When farmers do not profit, they do not produce. So I applaud the government for lifting both the export bans and the export licence requirement on soya.”
Malawi has so far made 16 specific policy commitments, including passing the Land Bill, the new Seed Act, removing export bans and trade barriers, as well as expanding access to irrigation.
Malawi’s economy is agro-based with agriculture contributing greatly to the national gross domestic product and employing 80 percent of the total workforce. Tobacco—which contributes about 60 percent of foreign exchange earnings, tea, sugar, apparel and clothing, cotton, nuts, pulses, sawn and plied wood, natural rubber, coffee, spices, hides and skins and wooden furniture are among the country’s main exports.