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MALAWI: Bountiful maize harvest tempered by input costs

11 Jun 2009 16:17:26 GMT
Source: IRIN

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JOHANNESBURG, 11 June 2009 (IRIN) - Malawi's bumper maize harvest of 3.66 million tons is being attributed to good rains and the success of an agricultural subsidy programme targeting poor smallholder farmers - an initiative donors want to review.

Small-scale farmers account for about 80 percent of the country's agricultural production, with the rest coming from commercial farmers in the land-locked southern African state. About 75 percent of the 13 million population live in rural areas.

Erica Maganga, Malawi's secretary of agriculture and food security, told IRIN: "The success in high production is due to the farm input subsidy programme the government implemented for the fourth time last year, where inputs, mainly improved seeds - hybrid and open-pollinated varieties - are given to resources-poor smallholder farmers at a subsidized price."

Malawi's national maize consumption is about 2.2 million tons, which should give the world's 14th poorest country a surplus of about 1.4 million tons.

The subsidy programme was first implemented in early 2000, but Maganga said that in a pool of "3.4 million resource-poor smallholder farmers" about 1.7 million had benefited from subsidies in the 2008/09 farming season, which runs from November to April.

The registration of small-scale farmers was supported by Britain's Department for International Development (DFID), which promotes development and the reduction of poverty. Once registered, the beneficiaries receive a coupon allowing them to purchase agricultural inputs at the local market at a subsidized rate.

Maganga said the programme would continue alongside the agricultural department's efforts to promote new farming methods, such as conservation agriculture and the use of organic fertilizers.

Alick Nkhoma, assistant representative in Malawi of the UN Food and Agricultural Organization (FAO), told IRIN that "the fairly good rains and the subsidy input programme contributed a lot [to the maize harvest], especially as the inputs were very expensive [because planting occurred when oil prices were near record highs].

Small-scale farmers were able to access inputs at one-tenth of their price, the costs being borne by both donors and government, and do not have to repay the balance of the subsidy after the harvest.

The donor community is scheduled to meet with the Malawian government in the next few days to discuss the subsidized agricultural input programme. "The cost is not sustainable, which is becoming a major issue," Nkhoma said.

A food security specialist, who declined to be identified, told IRIN that the issue was: what does the input subsidy programme want to achieve? If it was to produce a maize surplus, then targeting the subsidies at "mid-level farmers" [agricultural producers between smallholder farmers and commercial farmers], would increase yields per hectare and produce a surplus.

The yields of small-scale farmers average about three tons a hectare, while commercial farmers achieve six tons a hectare. However, if the aim of the subsidy was an economic safety net, than there were other more cost-effective measures to achieve that end.

The surpluses have yet to translate into cheaper maize-meal, which retails for about 50 Malawian kwacha (US$0.40) per kilogram. According to an analyst, the high price is a consequence of the bumper 2007/08 harvest, when government and private concerns stockpiled maize against global food shortages, and both parties were now recovering the costs.

The 2009/09 maize surplus, however, is expected to contribute to Malawi's economic growth rate. The International Monetary Fund's country manager, Maitland MacFarlane, reportedly said in March 2009 that the growth rate, which was second only to Qatar's in 2008, was the result of expansion in the telecommunications industry, high tobacco sales, and a bumper maize harvest of 3.2 million tons in 2008.

The Economist Intelligence Unit has estimated Malawi's growth rate at 8.3 percent - topping Angola's oil-fired economy by 0.1 percent - and in recent years has seen economic growth above seven percent, comfortably more than the six percent required to bring down poverty rates.

Finance Minister Goodall Gondwe reportedly referred to Malawi's growth rate in 2008 as "extraordinary", and about three times the average rate of around three percent in the southern African region.

"We have also reduced the number of people living below the poverty line," Gondwe said. "It used to be 60 percent in 2004; it is now below 45 percent."

World Food Programme spokesman Richard Lee told IRIN that the harvest was "very good for food security in the region, and it might mean we will be able to procure food from Malawi."

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