Figure 1. Food security conditions as of September 2007 FULL-SIZE IMAGE Source: FEWS NET

Executive Summary

• The current food security situation in the country is generally favorable, and most households still have food stocks from this year’s bumper harvest. A few areas though did not harvest as much as expected due to dry spells, pest attacks and floods, compromising the food security of local households. The MVAC assessment indicated that there are close to 520,000 people in such areas that need close monitoring. Though these households are currently food secure, some of them could become moderately food insecure between January and March.

• Due to the ready availability of food in the country both at the household level and in the markets, coupled with low food prices and better income earning opportunities for poorer households, the situation in the affected areas mentioned above is unlikely to deteriorate beyond moderate levels of food insecurity.

• However, in the worst case scenario, the markets fail to operate efficiently, resulting in rapid increases in maize prices. Some of the areas such as parts of Karonga district in the northern region and Chikwawa and Nsanje districts in the southern region could experience food deficits that may require some form of intervention, especially from January to March.

• The bumper harvest this season has resulted in relatively low maize prices in the local markets, a situation that has forced some traders, especially the small scale, to shift from the maize business to other types of business or other commodities, leaving few maize traders in some markets. Although the country is exporting maize, it is also receiving maize imports through informal cross-border trade, mostly from Mozambique, although at a lower volume than in the previous seasons.

Current food security situation

The favorable rains, coupled with ready availability of agricultural inputs last season, including fertilizer and hybrid maize seed, resulted in bumper harvests of most crops. Unlike in the past, the country did not experience the significant dry spell that usually occurs around January/February and sometimes results in significant loss of crops and, in the worst case, widespread food insecurity. The few exceptions were in Karonga, where dry spells of 4 to 6 weeks were experienced in Lupembe, Nyungwe and Vinthukutu Extension Planning Areas (EPAs) and some EPAs in Nsanje (Mpatsa and Nyachilenda) and Chikwawa (Mbewe and Mikalango) districts. In addition to the favorable rains, the government input subsidy program made fertilizer available at only MK950/bag instead of the market price of up to MK4,000/bag, enabling many poor farmers to access fertilizer and improved seed varieties, to which they would not have otherwise have had access, and contribute significantly to the bumper harvest in the 2006/07 season.

According to the Ministry of Agriculture and Food Security, maize, the country’s main staple food, registered a 34 percent increase in production from 2.58 million MT in 2005/06 season to 3.44 million MT in 2006/07 season. This has provided Malawi with an estimated food surplus of over 1 million MT. With such a huge surplus, the government has seen it feasible to export maize for the first time in many years, at least officially. The government through the National Food Reserve Agency (NFRA) is exporting 400,000 MT of maize to Zimbabwe, and by the end of August, over 150,000 MT had been exported. In addition, the government has donated 10,000 MT of maize to Swaziland and Lesotho. The Swaziland government has also expressed an interest to import about 40,000 MT of maize from Malawi. The government also wants to use this opportunity to build maize stocks that can be used in case the country has a food shortfall in the coming seasons. The government is therefore decentralizing and increasing the storage capacity of the Strategic Grain Reserves, which includes opening new silos in Mangochi district with a capacity of 20,000 MT. This is in addition to the silos in Lilongwe that have a storage capacity of up to 180,000 MT.

The bumper harvest in the 2006/07 season has increased the number of households who have been able to rely on their own production of staple foods for longer than is normally the case. Consequently, the market demand for various types of foods including maize is generally lower than normal. This has resulted in relatively low prices for the various food commodities and has acted as a disincentive for some traders to engage in the food trade, especially that of maize. The number of traders in maize in some markets has visibly decreased. This could become problematic in some areas that did not produce surpluses if the lack of traders restricts supplies and drives up prices during the lean period, between January and March. Low maize prices are currently ensuring household food security, especially of the poor. However, low prices could also discourage maize production in the current agricultural season, especially by commercial farmers.

Maize imports and exports also continue through informal cross-border trade. A total of about 36,000 MT were imported between April and August 2007. Almost all of these imports are from Mozambique. Although Malawi produced a maize surplus, Malawi still provides the most convenient market for some parts of northern Mozambique. However, the level of maize imports between April and August 2007 is low compared to about 51,000 MT and 49,000 MT maize imports during the same period in 2005 and 2006, respectively. Nevertheless, these imports further improve the food security situation in the country. Maize export figures through informal cross-border trade do not show a significant difference with last season, simply because most of the traders this season are exporting maize officially through the NFRA rather than informal channels. Maize exports through informal cross-border trade amounted to about 2,000 MT between April and August 2007 compared to about 3,000 MT during the same period last season. In 2006 there were no official maize exports due to the export ban. The export ban was lifted sometime in April in a bid to find a market for the surplus maize in the country.

Most likely food security scenario (October to December 2007 and January to March 2008)

Figure 2. Most likely food security conditions: October to December 2007 FULL-SIZE IMAGE

Figure 3. Most likely food security conditions: January to March 2008   FULL-SIZE IMAGE Source: FEWS NET

The number of households running out of food from their own production will rise gradually, reaching the peak around January/February, just before the new 2007/08 season crop reaches maturity in March 2008. The households that have run out of food will depend on the market for food or will purchase from neighbors. Since there is a lot of maize in the country, finding maize will not be a problem for those who want to buy. As the market demand for maize increases, prices in local markets will also rise gradually, but within the range where most households can still access it. The poor households that have run out of food will have adequate access to income generating activities to obtain maize or cash to buy maize. Most important among these activities is casual labor (ganyu), whereby those who do not have money or food are temporarily employed to work in other peoples’ fields, where they are paid in cash or kind (food). Since many households had a good harvest, there will be no excess labor supply searching for ganyu, and the wage rates are likely to be favorable and enough to allow the households concerned to earn enough cash to buy food. Livestock prices will also not drop as they tend to in bad years, and those households that depend on sale of livestock for their incomes should be able to generate enough income to buy maize while also meeting other household expenses as needed. From this perspective, the food security situation in the country is likely to remain favorable up to the end of the season in March 2008. This is not to say that there will not be any households with food security problems, but most of these households will be those that are chronically food insecure, some of whom are assisted through various targeted programs by organizations such as WFP and other NGOs. However, during the peak of the hunger season, from January to March, those areas that did not produce as much as expected might experience a slight deterioration of their food security, but not necessarily to warrant any serious interventions. This favorable situation is expected to hold even in those areas identified as being at watch by the MVAC (Karonga in the north and Nsanje and Chikwawa in the south), as the markets are expected to take care of the needs of those depending on the markets for food.

Worst case food security scenario

In the worst case scenario, maize becomes scarce in both local and ADMARC markets in the affected areas (Karonga, Chikwawa and Nsanje districts) because traders and ADMARC have not stocked adequate supplies (due to expectations of low demand) and maize prices start rising rapidly. Some of the smallholder households never produce enough to last them the whole season and have to depend on the market for food, especially maize. This is due to a number of factors but most importantly their small landholding sizes, and this is especially the case in many parts of the southern region where the population density is high. There is also a tendency by some of the farmers to oversell the maize they have harvested and buy maize later in the season when their own stocks have run out. Some of the households might have experienced heavy post-harvest losses, especially due to weevil and Large Grain Borer (LGB) attack, thereby reducing the maize stocks from own production and forcing them to turn to the market for food. Cases of LGB have been widely reported and can cause extensive damage to crops.

Figure 4. Worst case scenario food security conditions: October to December 2007 FULL-SIZE IMAGE

Figure 5. Worst case scenario food security conditions: January to March 2008 FULL-SIZE IMAGE Source: FEWS NET

It is not very clear how much maize the government has in stock as a strategic reserve, but the NFRA has just floated a tender for the purchase 35,000 MT of maize for the SGR. ADMARC acts as a guaranteed market for maize for most poor households and is also one of the suppliers of maize to the NFRA for export to Zimbabwe. ADMARC started buying maize two to three months after private traders had already started buying. Although it is reported that farmers still have maize, it is not clear whether ADMARC will be able to purchase enough stocks to meet its contractual obligations to the NFRA as well as their commercial stocks. Generally, in areas where harvests were poor, low stocks in ADMARC markets during the lean period have always been associated with increased prices by private traders in the markets, reducing the purchasing power of the poor. As households that are running out of maize from own production increases with time, forcing them to turn on to the market for food, the maize prices may begin to rise rapidly due to excess demand, making the majority of the poor households vulnerable to food insecurity. The almost 520,000 people that were identified to need close monitoring under the MVAC assessment may become food insecure while some may even become highly food insecure. If the winter crop fails in the lower Shire due to insufficient moisture conditions, some of the households in the area may become extremely food insecure.

For poor households who depend on ganyu as a source of cash or food during the growing season, the main problem affecting their source of livelihood would be a failure of rains in the early part of the season, which would limit the demand for ganyu.