Malawi’s Farm Inputs Subsidy Programme (FISP), which is credited for the country’s bumper maize and legume crops in recent years, is under threat for the 2011/2012 financial year because the country is in the grip of fuel and foreign exchange shortages and a diplomatic row with the UK.
In previous years a combination of inputs were distributed to around 1,6 million beneficiaries, including 100kg of fertiliser, 5kg bags of hybrid maize seed, 7,5kg bags of open-pollinated maize seed and 2kg bags of legume seed. Government contributed to the fertiliser costs and donor countries picked up the remaining bills.
This year, although the number of beneficiaries is down by 200 000, fuel and funding shortfalls are jeopardising the FISP’s roll out, which must coincide with the onset of summer rains between mid-October and mid-December if it’s to succeed.
“We oversaw the transfer of 20 000t of fertiliser a week this time last year, but last week we only did 10 000t,” said Charlie Clarke, head of the FISP’s logistics unit, which has been credited with the programme’s success in previous years. “Fuel and fertiliser are the things missing this year from last year’s equation.”
A source within the Ministry of Agriculture said that the programme currently has only 48 000t of the required 140 000t of fertiliser. “It’s because of Malawi’s economic credibility – we can’t get the credit terms we need. There is a bit of hope now because some of the suppliers are willing to accept a 90-day letter of credit, but we now have to move the fertiliser to where it needs to be,” said the source.
The 140 000t required by the programme was put out to tender by Malawi’s Agricultural Development and Marketing Corporation (Admarc). As Malawi has a negligible fertiliser production capacity, the entire amount has to be trucked into the country to three storage depots managed by a state entity called the Smallholder Farmer Fertiliser Revolving Fund Malawi. From the depots it’s supposed to be distributed to 900 markets by local transport companies.
But fuel shortages are making this difficult and could compromise the effectiveness of the programme, said Monica Stensland, a representative of the Norwegian government, which plans to contribute US$5,7 million (R48,2 million) to the FISP this year. The balance of costs is made up by the British and Irish governments.
According to a representative of a company contracted by Admarc to deliver fertiliser to state storage facilities, 25 000t of fertiliser has sat in a bonded warehouse at the Mozambican port of Beira for weeks because the Malawian government hasn’t produced a letter of credit.
Dalitso Kubalasa, executive director of the Malawi Economic Justice Network, explained that Malawi’s inability to pay suppliers reflects a scarcity of foreign cash reserves, partly due to the tobacco industry’s declining contribution of foreign exchange to national coffers.
“A diplomatic argument with Britain led to an aid freeze, which exacerbated the situation,” he said. The British ambassador was expelled in April after an email in which he described Malawian president Bingu wa Mutharika as “increasingly autocratic” was intercepted. – Sean Christie
Caption:
Beneficiary Willie Banda with his inputs: 100kg of fertiliser, two bags of hybrid maize seed and open-pollinated maize seed, and a small bag of legume seed.
SEAN CHRISTIE
