United Kingdom says will only support sensible farm inputs programme, targeting the poor, thereby putting all the promises about universal or fertilisers cheaper than currently available in serious doubts.
British government Department for International Development (DfID) is one of the major donors to Malawi’s fertiliser subsidy programme but the department has clearly say that in the next crop season it will only continue supporting the programme if the cost remain sensible and still targets the productive poor who cannot afford the inputs at full commercial price.
DfID’s statement comes amidst campaign promises ahead of the May 19 elections from various political parties who some are telling voters that once voted into power they will do away with a targeted approach of the programme to make it universal to accommodate all Malawians including commercial farmers.
In an email response to a questionnaire regarding the operations of the programme in the last three years DfID Strategic Communications Officer Andrew Massa said evaluation has shown that the current distribution system of using coupons to target the most needy has so far been effective.
“DFID will continue to engage Government in policy dialogue to ensure that the cost assumptions for the programme are sensible, that targeting is evidence-based, and that sustainability considerations are strengthened and encouraging private sector participation,” said Massa.
Most of the political parties on the campaign trail are promising a universal subsidy while others are talking of free fertilizer to the targeted poor and also a reduced price of the commodity to all farmers.
Currently government is using coupons to targeted beneficiaries a system that has attracted criticism from the opposition parties who said the system was prone to corruption and also marginalize other would be beneficiaries.
Massa, however, said the evaluation has shown that identification of beneficiaries and distribution of coupons and inputs have improved this year as compared to previous years.
He said DFID will support Government to learn lessons from the targeted system to deliver a ‘smarter’ subsidy programme.
“The independent evaluations highlight the importance of making sure people get fertiliser in time, and of effective targeting to ensure the right people – the productive poor who have land but who cannot afford fertiliser at commercial prices – benefit from the subsidy.
“The 2006/7 evaluation suggested that targeting could improve. With effective targeting, the development impact of the programme increases and Malawian taxpayers get greater value for money,” said Massa.
He stressed that the programme in its current form was intended for a designated number of the “productive poor” who cannot afford the agricultural inputs at full commercial cost.
Massa, however, said despite the current global financial downturn funding to the programme will not be affected next season since he said the UK Government remains committed to reducing poverty and promoting growth in Malawi.
He said DfID expects a decrease in the cost as well as a reduced number of beneficiaries of the programme this year due to the decrease in the prices of both fuel and the fertiliser itself on the world market which led to high cost of the programme last year.
“The current declining fuel and fertiliser price is a positive development for next year’s program, and it should reduce the cost of the programme and mean that commercial fertiliser is affordable to more people, (thereby) reducing the need for subsidies,” said Massa.
Massa said so far DfID was impressed with the impact of the programme, which he said has reversed more than a decade of food insecurity and dependency on food aid, contributed to the country’s annual growth rate; and reducing the number of households at risk of hunger from 5 million in 2005/06 to 670,000 in the current lean season.
Commenting on government campaign promises that the fertilizer subsidy will be reduced to K500 per 50 kg bag Massa said: “DFID looks forward to cooperating with Government after elections to discuss the pros and cons of any changes to the current subsidy programme, to help ensure it is a ‘smart’ subsidy.”
According to Massa DFID is providing £20m () over a period of four years to the programme through the ministry of agriculture and food security.
He said the support include seed subsidy, which apart from providing affordable seeds also encourage adoption of improved seed varieties; participation of the private sector in the procurement and distribution of fertilizer; and the introduction of a variety of risk management tools including weather insurance to ensure available and affordable food for the poor.
In addition to the farm inputs subsidy support, DfID also provides £22m () per annum in budgetary support.
Massa also said that despite the global economic downturn the UK government still aims to give £75 million in aid during the next year.
During the ongoing campaign the Malawi Congress Party (MCP) has been telling voters that once voted into power the party will introduce a universal subsidy programme that will benefit all Malawians including commercial farmers.
MCP spokesperson Ishmael Chafukira in an interview maintained that the current targeted coupon system has not assisted Malawians but has only managed to bring problems and miseries to the farmers.
“However, DfID is not the only donor which MCP, once in government, would go into partnership with. As MCP we will roll out our programme, put in on the table and if they will not appreciate it we will approach other donors,” he said.
The United Democratic Front (UDF) has been promising people free fertilizer to those who can not afford the commercial prices and also that the commercial price will be reduced to K2,500 per 50 kg bag to benefit everyone. Currently fertilizer is sold at the commercial price ranging from K5,000 to as high as K13,000 per bag.
UDF spokesperson Rob Jameison said the current coupon system is badly managed the evidence being the shooting up of the budget from K19 billion to K29 billion.
“That is bad management and although DfID is saying it is satisfied and believes it has been, on the ground it hasn’t been helpful and not corruption proof especially where people and chiefs are always at logger heads due to the distribution of the coupons,” he said.
Jameison said the plummeting of the fuel price on the global market means that the price of other commodities such as fertilizer will also drop and make it possible to lower the local prices as well.
He also said Malawi has been importing 50 per cent of the fertilizer as baked stone which he said can be produced locally as the country already has raw materials.
“It is not a case of looking for more funding but rather a case of managing the programme properly. Our will be a scientific approach to make fertilizer affordable,” added Jameison.
Alliance for Democracy (Aford) on the other hand said once voted into power the party will increase the current targeted figure of 1.5 million to 2 million beneficiaries who will be given free fertilizer while the commercial price of the fertilizer will be reduced to K2,500 per bag.
Aford presidential candidate Dindi Gowa Nyasulu said even without donors this can be possible to be supported by the national budget only if government can cut on other unnecessary expenditures such as the purchase of expensive fleet of vehicles and travel.
“If we reduce other expenditure we will be able to raise extra money to get the fertilizer for free distribution to 2 million people. We will actually not increase the budget or get extra money from the donors, this will be money from our own budget,” he said.
Currently the country consumes more than 200,000 metric tones of fertilizer and this year out of that government spent K29 billion to buy 170,000 metric tones of the commodity.
It is estimated that if government is to introduce a universal subsidy it will need almost K35 billion in the budget to meet the cost.
