|
 Because of drought in Malawi and across southern Africa the grain
has doubled in price in the space of a year, and now costs around
200 kwacha ($0.28) a kilo.
Like many, Abale is struggling to pay for maize, a staple of the
diet, and says her own - stunted - crop will not be ready for
harvest for two months. "It's too expensive, I have almost no
money," she said.
In all 2.8 million people in Malawi, or 17 percent of the
population, now face hunger, according to the United Nations World
Food Programme (WFP).
Drought and floods have hit the maize crop, exposing the fragility
of gains which had seen Malawi's rates of malnutrition slashed in
the past two decades.
That progress was partly rooted in a fertilizer grant for
small-scale farmers. But now the government, starved of donor funds
following a graft scandal over two years ago, can ill afford such
payments and says it must scale down the program.
Ironically, policies aimed at ensuring basic food security are
partly to blame for a cycle of rural poverty and aid dependency in
this land-locked African nation, leaving the population vulnerable
to climate shocks, economists say.
 "There is no doubt that the fertilizer subsidy was only feasible due
to donor support," said Ed Hobey, an analyst at Africa Risk
Consulting. "At best, it was unsustainable without continued donor
support, at worst, it was an illusion built on aid."
Launched in 2005, the Farm Input Subsidy Programme (FISP) provides
qualifying farmers - those with limited income but a plot of
productive land - with two coupons which can be redeemed for two
50-kg bags of fertilizer. The recipients make a modest contribution,
with the government footing most of the bill.
Because the government is subsidizing the production of maize - the
main source of calories for many poor households - it also bans the
export of the grain.
The program is credited by the government and some aid agencies with
lifting maize production and cutting hunger.
The data appear to back that up.
The United Nations Food and Agriculture Organization (FAO) says the
percentage of Malawi's malnourished population fell to 21.8 percent
in 2012-14 from 45 percent two decades earlier.
But FISP's role here is difficult to untangle as most of those gains
were made before 2005. Still, there is evidence of benefits,
including indirect ones.
Stunting among Malawi children - a key nutrition measure - fell to
42.4 percent in 2014 from 49 percent in 2002.
UNINTENDED CONSEQUENCES
But the program has also had unintended consequences.
The focus on food security, including the ban on maize exports, has
discouraged investment in more productive commercial farming
methods.
"Our concern with the export ban is that it limits the scope to
expand production among more medium and large-scale farms if they
are unable to market the surplus," said Richard Record, World Bank
Senior Country Economist, World Bank in Malawi.
In the long run such a ban stunts food production, especially in an
age of increasingly high-tech farming, economists say.
 FISP also diverted state funds from other areas.
In all, FISP has accounted for as much as 9 percent of government
expenditure and over half the agricultural budget, leaving scant
funds to invest in rural transport links and other projects that
would benefit the countryside.
"The FISP was not matched by increased investment in rural
infrastructure especially roads and irrigation," said Hobey of
Africa Risk Consulting.
This retards development of other sectors in the farm value chain,
such as canning, which can kick-start industrialization, economists
and analysts say.
Initially FISP met its objective: providing calories to the rural
poor. Between 2007 and 2014 Malawi produced bumper maize crops, with
surpluses recorded since 2007 - until last year.
A study in the "The American Journal of Agricultural Economics"
found a 15 percent boost in maize production under FISP coincided
with a 15 percent decrease in the amount of land devoted to the
grain.
This suggests small-scale farmers diversified to cash crops such as
tobacco and cotton.
DONOR DROUGHT DRAINS FISP COFFERS
Today FISP is no longer viable, government officials and analysts
say.
[to top of second column] |
Donor funds for the budget have dried up in the wake of a scandal
over two years ago dubbed "cashgate", in which state officials
siphoned millions of dollars.
"We are going to have to be scaling down expenditure on FISP, we are
reacting to diminishing resources of funds for the budget," Finance
Minister Goodall Gondwe told Reuters.
Belt tightening is underway, though the number of FISP recipients
has remained unchanged at 1.5 million.
Instead of paying 500 Malawian kwacha ($0.70) toward the two 50 kg
bags of fertilizer subsidised, Gondwe said farmers would now pay
3,500 kwacha. The cost of a bag is around 20,000 kwacha.
Several subsistence farmers interviewed by Reuters in their fields
said they could not afford the 3,500 kwacha, let alone the full
cost.
The price for fertilizer has surged as it is imported and the kwacha
<MWK=> has been sliding against the dollar, losing 63 percent in the
past 12 months.
Gondwe said the program this financial year would cost 54 billion
kwacha instead of an original estimate of 40 billion, plus an
additional 8 billion rand for seeds.
INDIVIDUAL SUCCESSES
To be sure, FISP has helped individual farmers, such as Salome
Banda. Five years ago, Banda made the transition from subsistence
farming to producing a surplus of maize for market because she
received the grant once.
"I have not had it since 2010 but I can buy my own fertilizer now,"
she told Reuters as she stood proudly by 50 kg bags of her maize
stacked in a warehouse north of Lilongwe. She said one FISP grant
tripled her production that season.
For others, the benefits have not translated into such gains and
even Banda, while she produces surpluses, has hardly made the leap
to more productive, technical farming.
"When I got FISP, I fed all my children," said Matezenji Watsoni, a
35-year-old mother of seven, as she waited outside a World Food
Programme relief station in a rural Lilongwe suburb for a 50 kg bag
of maize.
"But this is the third year I have not had it, and it has brought
hunger to my house," she said.
This year a perfect storm is brewing after a decade of maize
surpluses turned into a deficit of 225,000 tonnes in 2015, in a
country that consumes 3 million tonnes annually. The harvest this
season looks set to be even worse.
RURAL TILL THE COWS COME HOME
Another unintended outcome of the FISP is that by subsidizing
peasant farming, people have an incentive to remain on the land,
adding to rural population pressures.
Late rains have clothed central regions in simmering shades of green
but this idyllic image belies the late start to the summer planting
season and the grinding poverty of rain-fed, hand tilled
agriculture.
Malawi, which has done little to industrialize, is also barely
urban. In 1990, 88 percent of the population was rural, a number
that was 84 percent in 2014, according to World Bank data.
Sub-Saharan Africa as a whole is 63 percent rural.
Asked about industrialization, finance minister Gondwe, a jovial
septuagenarian, looked almost bemused.
"It will take time to industrialize. But don’t forget this country
cannot even make a needle. So to base your policy on that probably
is asking too much."
($1 = 717.0800 kwacha)
(Additional reporting by Eldson Chagara; Editing by James Macharia
and Janet McBride)
[© 2016 Thomson Reuters. All rights
reserved.]
Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
