By Kingsley Jassi:
The next Farm Inputs Subsidy Programme (Fisp) will not support subsistence farming, shifting attention to commercial growers as part of the renewed agricultural commercialisation drive.
This reform will pair the market structuring, setting up sustainable production and marketing systems aimed at transforming the sector that has faced challenging structural issues.
Minister of Agriculture, Irrigation and Water Development, Roza Mbilizi, told Business Times in an exclusive interview that, beginning this year, the government will offer farm inputs support to small scale commercial farmers in registered cooperatives.
This, according to Mbilizi, is to ensure maximum benefits of the investment that has not been making an intended impact on food security and agriculture commercialisation for years, despite trillions of Kwacha being invested in subsistence farmers.
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“We want Fisp to benefit farmers, not only on food security but also income and that is commercialization. Farmers will only benefit through cooperatives because we want to aggregate their produce but also give them maximum support in terms of extension services,” Mbilizi said.
Through the cooperatives, the state-owned grain trader, Agricultural Development and Marketing Corporation, would also be capacitated to provide reliable market access while national commodities exchange would be eventually set up to facilitate the domestic market and exports.
“We are also reforming Admarc to ensure they provide aggregation centres. It is a well-structured market – starting this year,” she said.
Fisp, allocated K111.45 billion this year, has been marred by irregular targeting as some beneficiaries with no land to grow crops and those with no food or with many pressing economic issues could only sell the fertiliser and later need food relief during lean season.
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Meanwhile, Ministry of Finance, Economic Planning and Decentralisation is working with Reserve Bank of Malawi (RBM) to set up framework for national commodities exchange that will provide the structure of the commodities market in the agriculture sector and according to the Finance Minister, this will be a gateway for the country’s commodity exports.
The latest commentary by the Centre for Agriculture Research and Development has since urged authorities to put stronger market interventions through Admarc, and invest in storage, warehouse receipt systems, and market information systems to reduce panic sales.
“”Additionally, the government must ensure that smallholder farmers are adequately protected from adverse market conditions and price fluctuations,” the commentary says.
For non-staple crops, it suggests the pricing regime should prioritize market development, enhancing value chains, improving export competitiveness, and increasing price transparency, rather than enforcing some rigid minimum prices.
