Malawi’s one night stand: How fertiliser subsidy has failed to poor farmers

Gogo Munthali dissolves into tears every morning. She worries about what to feed her five grandchildren orphaned by HIV/Aids. Munthali was among the first beneficiaries under the farm input subsidy programme (FISP) in Rumphi– over 400 km to the north of Lilongwe, when it was introduced some eight years ago.

For the first three years, her yields doubled from 10 bags of maize to 20 bags. But today, the 65-year-old widow is desperately poor and feeding her grandchildren has become an everyday struggle.

“Fertilizer for the last four years has been arriving late after the first rains…I have had to plant my crop three weeks late and this has reduced my harvest drastically,” she says.

But what worries Munthali more is Samson, the youngest of her grandchildren, who looks sickly and scrawny because he has fully blown AIDS.

“Samson may not be with me for long; he is on treatment and I can’t give him the food he needs,” she says looking forlorn and lost. Samson, 10, is but a statistic in a country where UNAIDS says 200,000 children aged between 0-14 years are HIV positive and over 500,000 are orphaned.

Mary Juma’s story is different. “My husband is a frustrated man,” she says when pressed by hospital staff at Dedza district hospital.

“We got so used to waiting for cheap fertilizers every year but now things have changed; today we are beneficiaries the next day we are not…last year we were left out despite being given coupons,” she says.

“We were told that the fertiliser that had been delivered to our area was not enough for all the families that were given coupons,” Mary says.

Hopeless in the face FISP

Hopeless in the face FISP

Last year, Mary says, my husband borrowed money from a revolving fund to buy fertilizers.  “But we were not lucky; a prolonged dry spell destroyed our maize crop and left us in a debt of over K150, 000 (about US$400) and no food,” she says from her hospital bed.

Then, when Mary gave birth to a third child and turned out to be a girl as well, her husband turned against her and worsened the tensions in the house.

“He told me that he was going to find another woman who could give him a boy,” she explains.

With no food for her girls, an abusive husband, she decided to run away. IPS found her at Dedza district hospital, about 45 km from her home in TA Pemba’s area.

Mirage or miracle?

In the mid-1970s up to the early 1990s, Malawi financed a universal fertilizer subsidy program, providing cheap credit to smallholder farmers and controlled maize prices. After 30 years, however, fertiliser support was withdrawn and the result was the decline in maize production.

Government, however, didn’t give up. From 1999 to 2004, it started providing small ‘starter packs’ to all households and later to a few targeted households.

But chronic food shortages escalated despite the small-scale subsidies. This is what made late President Bingu wa Mutharika to push for larger subsidies and building on his 2004-election manifesto, he decided to implement the FISP administered through a coupon system for targeted households.

About 1.7 million poor farmers were targeted providing them with two 50kg bags of inorganic fertilisers, improved hybrid and open pollinating maize seed at 50 % less. A village headman in each village assisted by the Village Development Committees (VDC), identified the families with priority given to households headed by children and women.

The results were phenomenal; maize output almost tripled in the first two years from an average of 1.06 ton/ha in 2000- 2005 to 2.27 ton/ha in 2009/2010 pushing GDP growth to an average of 7.4 %, higher than the World Bank recommended rate of 6% for sub Saharan Africa.

Inflation slid into single digits, benchmark interest rates went down from around 40% to 25% for the first time in two decades. Food security at household level also improved.

But the untold stories of Munthali and Mary, offer a glimpse into how FISP has failed to change the status of most poor farmers, mostly women who make up about 70% of small-scale farmers in Malawi. This is a malignancy no one wants to talk about because the story of FISP in Malawi has always been about the positive impact and not otherwise.

The results of the 2012 Integrated Household Survey underline the failure of FISP to reduce poverty as intended.  The survey found out that the incidence of headcount poverty had declined from 52.3 % to 50.7 % between 2000 and 2012.

And that during the same period the proportion of the ultra-poor increased from 22% to 25%. This is the same period FISP was introduced to help reduce poverty.

“Recent high-profiled food security policies have failed to rid Malawi of chronic food insecurity and malnutrition,” said Olivier De Schutter, the UN Special Rapporteur on the right to food, when he concluded his eleven-day mission to Malawi in July this year.
Pilferage, corruption cost bedevil FISP

As the international community celebrated the success of FISP in Malawi and lauded President Mutharika’s visionary leadership; moving the country from a basket case to a breadbasket for southern Africa, the political elite quietly fuelled corruption.

A 2007 investigation into FISP by the Anti-Corruption Bureau (ACB), kept under wraps for 5 years, but reviewed by IPS, reveals how the programme nearly collapsed after a preferred supplier from Saudi Arabia failed to deliver 70,000 MT of fertilisers on time.

The report sheds light into the behind the scenes intrigues that have become a familiar story when procuring fertiliser in the last eight years.

ACB found Finance Minister Goodall Gondwe to have disregarded technical advice not to award the contract to supply fertilisers to Pioneer Chemicals, a Saudi Arabian firm.

His decision, according to ACB, cost the country US$6.8 million when Pioneer Chemicals only managed to supply on time 35,000 MT of fertilisers out of the total contract of 70,000 MT.

In the race against time, between June and September 2005, government decided to source the reminder within the country.

“[As a result], the Malawi government incurred a loss of $6,898, 150 for procuring locally the 35 000 MT of Urea that Pioneer Chemicals failed to supply…” ACB said in its findings.

Gondwe, a former IMF vice president for Africa, last month told IPS in an interview that he was cleared of any wrongdoing and the case is closed.

Alexious Nampota, the ACB director who led the investigation, said that the bureau did all they could after Gondwe was dropped from cabinet to pave way for the investigation.

“There is nothing much I can say on this, what you read in the report is what we found out, what happened after that is not for me to comment,” Nampota  said when asked why Gondwe was left to go scot free.

But another ACB investigator close to investigation disclosed that after the report was presented to President Mutharika in 2007, he never gave any further any order to prosecute Gondwe as expected.

“So all the ACB could do was to wait and see and while we were waiting, Gondwe was appointed back into cabinet the same year this time as minister of local government,” said one of the investigators who asked for anonymity.

This, he said, was not the first time late President Mutharika shielded his cabinet from prosecution for graft citing another case involving the minister of information, which ACB had successfully investigated.

Another investigation, this time by police, revealed that last season 16,500 people registered as recipients under FISP, were left out after thousands of fertilisers were diverted.

“Thirty-three bags of fertiliser worth K470 million were diverted and sold affecting 16,500 beneficiaries,” the inspector general of Police Lot Dzonzi disclosed.

The influential Catholic Commission for Justice and Peace (CCJP) conducted a study in 19 districts and found out the impact of corruption on poor farmers.

“We discovered that those entrusted with the responsibility of selling the inputs are asking the poor farmers to pay more than K500 (US$2), which the recommended price for subsidy, forcing many who cannot afford to do without…There is too much corruption.” CCJP national secretary, Chris Chisoni tells IPS.

Another activist pushing for the right to food law in Malawi, Gift Trapeze, thinks the FISP has not worked because of corruption.

“Corruption at both the village level and at the highest level of decision making in government has left many farmers poorer than they were before,” he says.

But, he says, the decision by President Joyce Banda to set up another parallel programme to assist 3 million people is good news.
“If what the President has promised materializes, it will open up access to more farming families that need to be assisted and push food production,” he says.

The politics of maize

Blessings Chinsinga, a researcher at the University of Malawi in a paper titled The Political Economy of Agriculture Policy process in Malawi: A case Study of the Fertilizer Subsidy Programme, says that the legitimacy of the Malawi state is closely related to its ability to make maize, available to the people.

“This could either be through subsidising production or making maize available through the market at affordable prices. Therefore, access to maize form a critical component of the social contract between the Malawi state and its people,” he says.

But with less land available to grow food to feed an ever-rising population feared to reach 40 million by the year 2040, the pressure to increase maize productivity through fertiliser subsidies has become a must to ensure political legitimacy of those in power.

Examining the list of beneficiaries in the 2012/13 FISP, we found out that political patronage played a big part in deciding which provinces and districts gets more fertilizers. This was in clear disregard to allocating more inputs to areas that produce more maize for the country and have less population densities in Thyolo, Joshua’s story was common; many don’t have land and yet according to the list of beneficiaries, not made public, the district
last year had 90,000 beneficiaries – far much higher than Rumphi and Dedza, districts in the maize belt of the country. (See interactive info graphic map – https://www.google.com/fusiontables/DataSource?docid=19ULK0JBucSzP5Fc9vXny9obP6DaEQ6GMaCsc3lU)).

The sustainability of FISP in terms of meeting the foreign exchange requirements is also in question. How long can the government afford to continue with FISP?

In the last two years, maize production has been going down and the number of people in need of food aid increasing.

Apart from dry spells, flash floods, investigations show that corruption at every level in the FISP and the raising costs of the programme has resulted in fewer farmers getting fertilisers.

During the 2010/11season, 1.6 million farmers received coupons to buy subsidised fertilizer and maize seed, costing the government and donors US$153 million.

In the midst of a crippling economic crisis in 2011/12, government announced that only 1.4 million farmers were eligible to receive coupons and only 140,000 MT of fertilizers had been purchased for distribution compared to the 170,000 MT it bought the previous year.

For Munthali and Mary, the solutions are simple: “ All I need is for the fertilisers to start arriving on time and I can assure you I will grow more food to feed my grandchildren, I won’t beg anyone.”

And Mary believes her life can be turned around if only she consistently received subsidised fertilisers. “It affects us when the VDC gives us coupons this year and nothing the other…we are forced to go into debts.”

But it’s not that easy for government. The African Development Bank (ADB), one of Malawi’s major donors, says that FISP is draining a significant proportion of Malawi’s fiscal and foreign exchange resources and because of that, the sustainability of the programme is uncertain.

The Bank says in its April 2012 issue of Africa Economic Brief, that Malawi has to think about how to sustain the subsidy programme in terms of meeting the foreign exchange and fiscal requirements in order to maintain the input intake and increase output.

As it stands, observes the ADB, the farm input programme does not have a mechanism either to recoup the programme cost or replenish the foreign exchange that it consumes.

The influential Civil Society Agriculture Network (Cisanet) agrees. It says there is an urgent need for Malawi to review the fertiliser inputs subsidy programme.

“Malawi’s agriculture policy is dominated by a drive for food self-sufficiency since 2006, agriculture policy and funding has been dominated by the focus on maize with production support through FISP,” says Cisanet director Tamani – Nkhono Mvula.

“This has raised a lot of questions of efficiency and sustainability, especially given the neglect of research and development…” Schutter also thinks that there is a need to reassess whether FISP is the most effective use of available resources to protect the right to adequate food for all Malawians.

“Malawi is often held up as an example of how hunger can be tackled by subsidizing inputs for farmers… opportunities can be missed when too little is done to empower the poor and break cycles of dependency – on
chemical fertilizer,” Schutter says.

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