Things have gone very wrong for Malawi's president and that could cripple the government's ability to deliver subsidised fertiliser and seed farmers.
Malawian President Bingu wa Mutharika’s most ardent critics tend to agree that his first term—from 2004 to 2009—was successful and that at the heart of this success was his expansion of the fertiliser subsidy programme (Fisp) in 2005, credited for transforming famine-prone Malawi into an exporter of maize.
An average of 1.6-million smallholder farmers have received seed and fertiliser each year since then at nearly no cost to them. But this year was an annus horribilis compounded by chronic fuel and forex shortages and riots, in which 19 Malawian protesters died at the hands of state security forces, not to mention the expulsion of the United Kingdom’s ambassador, which triggered a Western aid freeze—and Malawi’s government is struggling to keep its prize programme from turning into an albatross.
“To put it bluntly,” said a character in the Lilongwe golf club, “we now live in the country of the four Fs: no fuel, no forex, no fertiliser — frankly, no f’all.”
Throughout Lilongwe, queues of cars and trucks stretch around city blocks and down highways, waiting for fuel tankers that can take up to a week to arrive. Last week, the government told fuel suppliers to keep their tankers out of the city altogether.
The executive director of the Malawi Economic Justice Network, Dalitso Kubalasa, explained the government’s woes in précis.
“Fuel and fertiliser are scarce because the suppliers can’t get the forex needed to pay for the stuff. There’s no forex in Malawi’s banks because Malawi has allowed itself to become dependent on a single forex earner, tobacco, and the tobacco price slumped last year. The freeze in Western aid tied Malawi’s other hand, as it were,” he said.
The final report on last year’s subsidy programme explains why this is a major problem. For the 2010-2011 programme, the government put the fertiliser required to service 1.6-million beneficiaries at 100kg each, a total of 160 000 megatonnes, out to tender. This was trucked into the country to three state storage depots. From there, it was distributed to 900 markets by local transport companies and distributed to farmers over a two-month period between October and December. The timing was critical. After December, it would have been too late for the season’s crop.
This year, at the October 11 launch of the programme in a school hall in Njala near Zomba, Agriculture Minister Peter Mwanza claimed that “all preparations for the 2011 programme have been completed, including the registration of beneficiaries, the procurement of fertiliser and the distribution of fertiliser and seed to retail markets in most parts of the country”.
But talk to the Fisp logistics unit and a different picture emerges. “At the moment, because of the fuel situation, we’ve got only 48 000 tonnes of fertiliser out of the 140 000 we need,” said Glaswegian logistics unit chief Charlie Clarke.
“Even if the state entities tasked with importing the fertiliser, namely Admarc and the Smallholder Farmers’ Revolving Fund for Malawi (SFRFFM), get their hands on the amount needed for this year’s programme, local transport companies have to get it out to where the beneficiary can come with his wheelbarrow to pick up his input,” Clarke said. “If you go to SFRFFM depots around Lilongwe, you’ll see truck after truck standing around, waiting for their bosses who are going around looking for fuel.”
The owner of a company contracted by Malawi’s Admarc to bring fertiliser into the country confirmed that the job was proving unusually challenging.
“We had to stick the fertiliser in a bonded warehouse in Beira port while we wait for a confirmed letter of credit from the Malawian government. Once that comes through, we can start moving the fertiliser but, to date, we haven’t moved a kilogram of the 25 000 megatonnes in storage to Admarc’s warehouses in Malawi, and it’s going to take many weeks to do this if that letter is signed today, especially given the fuel challenges.
“Until now, our drivers have escaped the queues by buying surplus fuel in Mozambique, but that’s become a problem because Mozambican criminals have cottoned on to the fact that Malawian drivers are carrying large amounts of cash and there’s a truck hijack at least once a week,” said the owner.
The position has improved slightly in the past two weeks as some suppliers have been willing to give the Malawian government a 90-day letter of credit.
But suppliers who are paid by the Malawian government encounter another hurdle. “The supplier gets paid here in Malawi kwacha [MK], which he takes to the bank to apply for forex, but the banks don’t have any forex because the tobacco crop, which is our main source of dollars, didn’t sell well last year. We have no dollars and, if you have no dollars, you have no trade,” said Kubalasa.
Besides 100kg of fertiliser, every beneficiary of Fisp is also entitled to a 5kg bag of open-pollinated variety maize seed, a 7.5kg bag of hybrid maize seed and 2kg of legume seed (either bean, ground nut, soya bean or pigeon pea seed). But seed companies have not been immune to Malawi’s crises.
“Last year, there was coupon fraud to the extent of MK900-million [R43.2-million] and this mainly affected seed,” said the owner of a seed company that won a tender to supply seed to Fisp. “Fertiliser fraud is limited by the fact that there was only 160 000 megatonnes of fertiliser available in the whole country and, once it’s gone, it doesn’t matter if you still have coupons, there’s no more fertiliser to get. In 2010, however, seed companies brought in much more seed than the programme was supposed to supply, so you ended up with 300 000 fraudulent coupons being printed because the seed was there to be had.
“The donors, who subsidise the seed, were angry about this and so the Malawi government agreed to stick MK4-billion into the pot. But the seed companies are still owed MK1-billion from last year, which puts them in a difficult position this year because they have to pay their growers. This could have an impact on the delivery of legume seed particularly,” said the supplier.
According to Elia Yamikeri, the district agricultural development officer for the Dowa district, smallholder farmers increasingly rely on legume seed, as prices for maize and tobacco have not been good.
“Those who grew tobacco are still sitting with bales of burley, which they have not been able to sell.”
Clarke confirmed that there was a shortfall in the delivery of legume seed. ‘Two kilograms of legume seed for 1.4-million beneficiaries equals 2 800 megatonnes and, at the moment, we have only 2 200 megatonnes,” he said.
This year’s programme, which caters for 1.4-million beneficiaries, is 200 000 individuals short of 2010’s total, a fact Mwanza attributes to the government’s desire to involve more smallholder farmers in the production of export crops, especially cotton. “It costs a bit more to do this but it is our hope that cotton farmers will be able to take advantage of the good cotton prices currently on offer and that they will in future become more self-sufficient,” he says.
But Yamikari says that the 200 000 drop in numbers has made life difficult for the local committee responsible for selecting beneficiaries.
“The poor tobacco price has made this a tougher year than normal and so more people than usual qualify for the programme, which has economic vulnerability as its central criterion. However, my district’s allocation has dropped from 70 000 beneficiaries to 63 000, which means there are more disappointed people than last year and this has led to quarrelling amongst villagers and even some violence,” Yamikari says.
‘Drop in beneficiary numbers’
Not everybody thinks that a drop in beneficiary numbers is necessarily a bad thing. Farmers Union of Malawi president Prince Kapondamgaga believes the programme is unsustainable and that Malawi’s smallholder farmers should be weaned off it as soon as the government positions them more securely.
“When you consider the domestic challenges together with global market pressures, like the rising cost of fuel, it is clear that the programme is unsustainable and one would hope that the plan is to graduate some of the farmers to enterprise development rather than always have them look to the government for subsidies.
“How the graduation is done is another question.
“In the meantime, nobody is willing to venture suggestions because the continued vulnerability of the Malawi smallholder farmer has turned the issue into political dynamite. Nobody wants to be blamed for returning the country to a state of food insecurity. For now, donors and officials alike are happy to acknowledge that subsidisation is a cheaper and preferable option to emergency relief,” he said.
In past years, the Malawi government has contributed the bulk of fertiliser to Fisp and the British, Irish and Norwegian governments have covered the programme’s remaining costs. But in April, the UK suspended aid to Malawi following the expulsion of the British ambassador, Fergus Cochrane-Dyet, over a leaked cable that referred to Malawi’s president as “autocratic and intolerant of criticism”.
The UK’s department for international development has recommitted itself to Fisp, but the British government has not yet said whether it will continue contributing to the Malawi government’s budget.
Given that the subsidy programme costs the Malawi government about 16% of its annual budget, the uncertainty about British budget support could undermine its ability to pay its share of Fisp’s costs.
If this happens, the losers will be men like 31-year-old Fael Makina, who has applied to become a beneficiary in every year of Fisp’s existence, and has finally been registered as one for 2011.
For all of his adult life, Makina has worked on a tea estate on the southern slopes of Mulanje mountain in Malawi’s southern region, picking 20kg of tea a day in return for MK180, or slightly less than $1. He has access to half a hectare of land but has never had the money he needs to farm it properly.
“This year, I will grow maize and cowpeas and with that money I will establish a small tea patch, so that in a few years time I can begin selling my own tea to the estate as an out-grower,” said Makina.
He is still waiting for his input coupons and this worries him because the rains have come early and the farmers in the village who have bought their own inputs have already dressed their land and planted their maize.
“I am told the roads are not good but I am sure the trucks will soon arrive. This is a good programme for the country and the government will surely make a plan,” he said.
Conservation agriculture could boost farming sector
There is broad agreement among donors and local agriculturalists that Malawi’s farm inputs subsidy programme, although credited for a rise in the national maize crop in recent years, is ultimately unsustainable.
Not only are the major donors—their own economies scalded by the 2008 global financial crisis—looking for the door but, because fertiliser usage exposes buyers to tremendous market volatility, the price of the natural gas from which nitrogen-based fertiliser is made is climbing ever higher.
Moreover, the example of chemical fertiliser is used by economics teachers around the world to demonstrate the law of diminishing returns. Fertiliser reduces soil fertility because chemicals push soil micro-organisms to consume organic material. If nothing is added to replenish this organic supply, the plant has even less to draw on than before. As a result, the frequency of fertiliser application tends to increase and the cycle of needing to provide another nitrogen fix escalates as the soil fertility decreases.
In short, whether because of market forces or the facts of chemistry, the cost of delivering the subsidy programme will spiral.
Proponents of the programme rightly point out that there is hardly an uncultivated piece of ground in Malawi—a small country with a large and extremely poor population.
Chemical inputs, they say, are necessary to replace soil nutrients lost to excessive cultivation over time.
But this reasoning overlooks the way Malawians farm, as Johann van der Ham of Foundations for Farming explained. “Since colonial times, Malawians have been taught to farm on ridges, which are usually hoed by hand to reduce soil erosion.
However, there is a growing appreciation of the fact that this practice ultimately contributes to soil degradation and, when paired with the practice of slash and burn, the result over time has been extreme degradation.”
Foundations for Farming, a smallholder farmer outreach organisation started by Zimbabwean super-farmer Brian Oldreive, is one of several organisations in Malawi advocating a change in methodology from ridge planting to what is widely known as conservation agriculture.
It is a startlingly simple system—one does not plough or hoe the land in advance of planting, instead covering the ground in a mulch of grass and twigs so that the soil retains moisture. The mulch also stifles the growth of weeds. When the time comes for planting, one simply scoops away the mulch at regular intervals, digs a series of shallow holes and drops in a few seeds. If a farmer is also taught composting techniques, or how to plant nitrogen-fixing plants such as Tephrosia vogelii, the system requires little in the way of chemical inputs.
The results can be spectacular. Van der Ham introduced Joseph Chikopa, who said he used to reap an average of three 50kg bags of maize a season when he planted on ridges. In contrast, during his first year of using a conservation agriculture methodology, he reaped 70 bags and was able to build himself a house with the profits.
After some initial resistance—“the older farmers called what I was doing ‘lazy farming’ and said there was nothing a young man could teach them”—Chikopa’s continued success has fired a mini agri-revolution in his village, with 12 farmers now mulching their fields instead of hoeing them.
Malawi’s government is well aware of conservation agriculture’s virtues and has established a task force to promote the system. Earlier this year, 25 districts’ agriculture development officers were sent to the foundation for training. But as Malawian academic Henry Mloza-Banda pointed out, conservation agriculture had been punted for more than a decade by the national extension programme and many other projects, without many smallholder farmers adopting the new practices.
This feature was produced in partnership with the Southern Africa Trust
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