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Fertilizer subsidies overwhelm agriculture ministry

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By Charles Mpaka

For 17 years now, politicians have systemically destroyed Malawi’s agriculture by reducing the lead ministry into a “fertiliser distribution unit”, officials in the ministry have complained.

And while politicians have poured money into fertiliser subsidy, they have literally emasculated the department by underfunding its core pillars, budget details show.

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In that period, they have allocated over K708 billion towards maize fertiliser subsidy alone, according to figures we have collected from budget analyses and statements covering the past 17 years from 2005 when the programme started.

Since 2006, the programme has gobbled up between 30 and 59 percent of agriculture budget in over 12 of the 17 years, effectively condemning all the ministry’s components to survive on crumbs falling from the fertiliser subsidies table.

Interestingly, coming in amid long-standing calls for the government to start scaling down the programme to free up resources for the ministry’s core functions, the Lazarus Chakwera administration has instead dramatically pushed up subsidy spending.

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Of that estimated K708 billion, the new administration’s subsidy share constitutes 40 percent in just two seasons.

The ministry is structured to develop Malawi’s agriculture through the following technical departments: animal health and livestock development, agriculture planning services, agriculture research services, crops development, fisheries, irrigation development, land resources conservation and agricultural extension services.

But with politicians favouring fertiliser subsidy, these core components have had to survive on leftovers of public funding.

All along, politicians have said their objective is to ensure food self-sufficiency, hence the lion’s share in funding. However, the driving motive – election votes – reflected from the statement by Minister of Finance, Felix Mlusu, recently.

At a post-budget meeting with Economics Association of Malawi in Blantyre two weeks ago, he indicated that politicians do know that the programme exerts enormous pressure on the public purse, hence the need to exit it.

But he also suggested it is an election votes project.

“Obviously, this was a campaign promise we made. We have done this in one year…, it cannot make sense for us to scrap it come second year,” Mlusu was quoted in The Nation as having said.

Spokesperson for the department, Gracian Lungu, admitted the funding prioritisation of subsidies.

“It is indeed true that for some good years, a good chunk of agriculture budget goes to subsidy. The status has remained like this for a reason that [ministries, departments and agencies] basically follow what the governing leader sees in their vision of transforming the country,” he told The Sunday Times.

And a senior ranking official at Capital Hill told us that politicians have put the ministry in their vote-buying clamps, overwhelming technocratic common sense and stifling the ministry from its principal objectives.

He said subsidies have constrained agriculture development in Malawi because “focus has been on production with nothing on processing and marketing which could have spurred development and growth through increased income and further investment.”

He added: “Focus on subsidies has also been done at the expense of investments in research and extension [and] no substantial changes in technologies farmers have been using over the years.”

This, said the source, has led to slow growth of agriculture in Malawi against a background of emerging challenges such as climate change.

He further said subsidies – which some see as a political financing and appeasement mechanism owing to politically-linked firms that line the supply chain — have not only crowded out public spending but also charmed private sector out of participation in agro-industrial development activities in favour of quick fertiliser subsidy windfall.

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