Nyiombo tops fertilizer subsidy suppliers list

One of the Malawi’s leading suppliers of fertiliser, Nyiombo Investments, has been named the leading and successful player in terms of preparedness for the 2012/13 Farm Input Subsidy Programme (FISP) programme.

This is according to a recent draft report released by the Government commissioned assessment and has been confirmed by Nyiombo finance manager Honest Tembo.

Tembo told Nyasa Timesthat the findings were based on the suppliers’ capacity and ability to supply, manage and distribute the fertilizer under the programme.

Nyiombo Investments Company stocks fertiliser to aviod delays this year

Critics have previously blamed late delivery and non-deliverance of fertilizer by suppliers, normally then ruling DPP cohorts, as one of the major obstacles to the smooth implementation of FISP since its inception in 2006. Many stakeholders have felt this has led to failure to meet harvest targets.

“As suppliers, Nyiombo Investments managed to supply fertilizer within the prescribed period for the 2011/2012 farming season. This, we attribute to our adequate capacity and that we do not buy from middle suppliers but import directly from manufacturers,” Tembo told Nyasa Times in an interview.

According to the report, other firms that have made it among the 10 most prepared include Export Trading, Farmers World and Simama General Dealers. But it was Nyiombo Investments Limited which beat the supply deadline by three weeks.

Nyiombo Investments Limited is a privately owned importer and distributor of fertilizer founded in 2002. According to Tembo, the firm employs 160 people in Zambia, Malawi and Tanzania and most recently in Zimbabwe.

“Annually, we sell 200 000 tons of fertilizer into the Central and East African Market,” he explained.

According to Finance Minister Dr. Ken Lipenga, the major allocation within the Ministry of Agriculture budget in the 2012/13 National Budget he presented recently is for the Farm Inputs Subsidy Program (FISP) which has been allocated a total of K40.6 billion.

“These funds are for the purchase of 150,000 metric tonnes of fertilizers comprising 75,000 metric tonnes of Urea and 75,000 metric tonnes of NPK fertilizers which will be distributed to 1.5 million farm families at a price of K500 per bag,” said Lipenga when he presented the financial plan.

The Ministry of Agriculture itself has been allocated a total of K68 billion.

According to the “written evidence” by Andrew Dorward and Ephraim Chirwa entitled “The Development Situation in Malawi” and submitted to the UK Parliament in early June, 2012, the FISP in Malawi has the potential to play a major role in both managing short term economic adjustments and welfare needs and stimulating the structural change needed to break out of the ‘low maize productivity trap’ that afflicts millions of poor people and the wider economy.

They observe that there are significant opportunities for further improvements in programme design and implementation regarding timing of input delivery, targeting of beneficiaries, fertilizer specifications, involvement of the private sector in retail sales of subsidized fertilizer, associated audit systems, extension support, and ‘graduation’ (the progressive scaling down of the subsidy without undermining sustainable livelihoods and growth processes).

“It is important to note that the programme also faces challenges as a result of difficulties experienced in the 2010/11 and particularly 2011/12 seasons. In the latter season foreign exchange and fuel shortages led to acute logistical problems, late input deliveries, and widespread expectations of late and limited supplies in the context of rising prices and shortages of unsubsidized fertilizers.

“This made access to subsidized inputs doubly valuable, and there are widespread anecdotal reports of diversion of inputs and demands for extra redemption payments. Reversing this will be a major and important challenge for the programme,” the two experts observe.

Dorward is Professor of Development Economics, School of Oriental and African Studies, University of London. He has long term personal and professional links with Malawi. He started his professional career in agricultural development with a posting to Malawi 35 years ago.

Chirwa is Professor of Economics, Chancellor College, University of Malawi. His research extends across different sectors of the Malawi economy, but in recent years has focused particularly on study of the welfare and economic impacts of health, education, agriculture and social protection policies in rural areas.

Andrew and Chirwa have together led DFID funded evaluations of the Malawi Farm Input Subsidy Programme since 2006, with biennial household surveys and annual analysis of implementation.

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