Agriculture subsidies have, in Malawi, been dispersed under several names such as Targeted Inputs Programme (TIP), Starter Pack and Affordable Inputs Programme (AIP), among others. Analysis of agricultural programmes depends on the party carrying out such an analysis. There can be political analysis, economic analysis, technical analysis, among others. Researchers have been arguing on whether to continue with agriculture subsidies or not.
Economic experts are saying the programmes are not benefitting the country simply because, despite government’s promotion of agricultural subsidies, there has been an increase of food imports in the last two decades in the country. Their reasoning is that agricultural subsidies have not reduced the money government has been spending on feeding the hungry.
The experts expected sustainability of the programme and it was their hope that, one day, beneficiaries of the programme would graduate and buy fertiliser on their own without relying on subsidised fertiliser.
Continual cultivation of maize on land without organic or inorganic fertilisers leads to low yields and consequent inability to afford input purchases. Most farmers also cannot buy inputs on credit because of underdeveloped credit markets and high costs of credit administration, high borrower and lender risks, consumption rather than sale of produce (with lack of cash for repayment), and high input prices and access costs due to low input demand, poor infrastructure and high transport costs. In short, using chemical fertilisers is a must for farmers in the country.
Should the government abandon subsidies and go for buying relief food each year? Certainly No. Subsidies have been there for some time now. With so many researchers working on it, we can learn some important lessons and work on the weaknesses rather than abandoning the programme completely.
There are technical as well as political objectives for the programme. Unfortunately, the political objectives may overshadow the technical ones. The technical objective of the subsidy programme is to target the poor. But this is the time to reflect on this objective: Are the very poor productive? If they are given the commodity to use in their fields, do they really use?
Poor people need food and not something to invest in. They need today’s food. It is very likely that such people may be attempted to sell the cheaper farm inputs. Instead of helping Malawian farmers, our fertiliser will be all over, even in our neighbourhood. The right people should be targeted in the programme, otherwise people who have sold all their land may benefit from such a programme and, as for the consequences, your guess is as good as mine.
Malawi relies mostly on rainfed agriculture, and very little is being done to upscale it. Relying on rain-fed agriculture is a big risk, yet we continue heaping all those billions of Kwacha on that risk.
This is the time to rethink our subsidies and see if some of the money can be spent on irrigated agriculture while some can be spent on the rain-fed one. If we were to produce a lot of maize under irrigation, this would help reduce cases of hunger in the months of December and March, when hunger strikes most in Malawi.
There has been research that recommends the use of both organic and inorganic fertilisers. Such research findings should be made available to the Malawi farming community so that the farmers can stop depending on chemical fertilisers one hundred percent.
After producing, the farmers have cried over lack of good markets. This is another area to look at when restructuring the subsidy programme.
It is suicide to abandon the programme. Even bigger economies do provide subsidies to the citizenry in one way or the other. They just target the right class of people for the programme to work.
Should the country go for agricultural subsidy or relief food? The donors and experts in agriculture are asking. The experts are correct; it does not make much sense to target the same people with both subsidy and food relief programmes. We need to continue with the subsidy programme but we have to go back to the drawing table and plan well for the programme, basing on the lessons learnt.