From a rather small and sluggish start, the Affordable Inputs Programme (AIP) is now akin to a train that has gathered pace.
For instance, from challenges such as late delivery of inputs in the 2022-23 agricultural season, this year’s programme seems to have taken the right pace.
President Lazarus Chakwera launched this year’s AIP in Kasungu District on October 20 2023, when he gave Agriculture Minister Sam Kawale 40 days to deliver the goods. That is, ensure that all targeted beneficiaries have received inputs.
The 2023-24 programme is targeting 1.5 million farmers, who will get a 50 kilogramme bag of Urea and another of NPK. 149,025 metric tonnes (mt) of fertilizer are to be supplied to beneficiaries this year, with the government setting aside K102 billion for that.
And Kawale has indicated that he has no problem with the 40-day ultimatum, saying he is up to the task.
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The minister explained that, unlike in previous years, the only problem that has beset the programme this year is easy to correct.
“The biggest problem we have faced is misspelling of beneficiaries’ names. This has caused a delay in about four districts.
“However, we are working towards completely dealing with this issue,” he pointed out.
Kawale said, as at Tuesday last week, over 19,728 beneficiaries had been served, with fertiliser being redeemed in districts such as Zomba, Balaka, Chiradzulu, Chitipa and Karonga.
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“More agriculture districts started on Wednesday [last week] after sensitisation meetings with members of councils, area stakeholder panels and village stakeholder panels on selection criteria and the number of beneficiaries in their areas.
“As of October 28 2023, we had 108,035.80 metric tonnes of AIP fertiliser in the country, and more [tonnes of fertiliser] are coming. A total of 140,796mt are available in total, AIP and commercial, with more coming into the country,” he said.
One of the decisions that may have contributed to this is the government’s decision to put some fertiliser under collateral.
As a result, the country had, as of Thursday last week, about 14,500mt of fertiliser that were available for distribution, but AIP beneficiaries cannot access the same because the soil-enriching substance is under collateral.
Under the collateral agreement, the government is keeping the fertiliser in its warehouses but cannot access it unless it pays suppliers, who are keeping keys for the warehouses and are demanding that they be paid in United States dollars.
This came to the fore during a meeting that the Agriculture Committee of Parliament had with officials from the Ministry of Agriculture on progress of this year’s AIP.
Smallholder Farmers Fertiliser Revolving Fund of Malawi Chief Executive Officer Richard Chikunkhuzeni told committee members that there is fertiliser being held in government warehouses but was quick to say the storage facilities cannot be unlocked unless the fertiliser is paid for.
“This is fertiliser that contracted suppliers, on our encouragement, placed in our warehouses in Blantyre, Lilongwe and Mzuzu. To us, this was like security. Whenever we saw the fertiliser, we knew we could access it the moment we paid for it.
“We had over 31,000 metric tonnes placed in our warehouses and, last week with support of $15 million from the Reserve Bank of Malawi (RBM), we managed to unlock 16,500 metric tonnes of the collateral fertiliser, which is under distribution,” Chikunkhuzeni indicated.
Chikunkhuzeni added that the government is banking on $33 million that would come from Ecobank if the Letter of Credit (LCs) is confirmed.
“This is what is giving us the [sense of] relief that we will be able to unlock close to 36,000 metric tonnes for distribution immediately the LCs are confirmed,” he said.
Chikunkhuzeni pointed out that RBM has supported them with $20 million, out of which $15 million has been received, and that they are also banking on a facility, worth $100 million, with Ecobank, out of which $33 million is being processed.
Principal Secretary for Agriculture Dickxie Kampani is equally hopeful that other problems, notably that of forex shortage, would be addressed as the authorities are working on the same.
“The problem of forex [shortage] is being dealt with by the Ministry of Agriculture, Finance and the Treasury,” Kampani said.
According to Kampani, at the moment there is about 36,000mt that are readily available for distribution.
Meanwhile, Vice Chairperson for the Agriculture Committee of Parliament Ulemu Chilapondwa has said they are hopeful that the ministry will be helped with forex to have the fertiliser unlocked.
“Our wish is that they should work quickly with the banks to get the forex so that the fertiliser that is under collateral can be released in good time so that they should meet the deadline as ordered by the President [Lazarus Chakwera],” Chilapondwa explained.
Another area that has been putting the government at loggerheads with institutions such as the World Bank is the number of beneficiaries and amount of money spent on AIP, which they regard as a drain on public resources.
For instance, on December 8 2022, the World Bank indicated, in the 16th Edition of the Malawi Economic Monitor (Mem), titled ‘Planning Beyond the Next Harvest: Advancing Economic Stability and Agricultural Commercialisation’, that higher government spending on initiatives such as AIP continued to widen the fiscal deficit, exerting pressure on the government’s fiscal consolidation plans.
“The Mem calls for accelerating these efforts by implementing the macroeconomic reforms the government has announced, which include building up foreign reserves, achieving fiscal consolidation and returning debt to a sustainable path; advancing agricultural commercialisation, improving the productivity of firms, and increasing and diversifying exports; protecting the poor and strengthening their resilience by expanding the Social Cash Transfer Programme and prioritising the delivery of social services to the most vulnerable,” it said.
World Bank Country Manager for Malawi Hugh Riddell reiterated that call.
“While some of the prospects for Malawi’s economy are conditional on an improvement in external conditions, the measures taken by the government to reduce the fiscal and external deficits— including progressing discussions on debt restructuring and the announcement of a less expensive and better targeted Affordable Inputs Programme—are steps in the right direction and will help address the ongoing crisis,” Hugh pointed out.
This year, the government seems to have heeded that call. This is because it has reduced the number of AIP beneficiaries from 2.5 million to 1.5 million households.
This is a marked reduction as the Tonse Alliance administration’s inaugural AIP [in 2020-21 fiscal year] targeted 3.7 million beneficiaries, which was almost thrice the 950,000 beneficiaries that were earmarked for the Farm Input Subsidy Programme in the 2019-20 fiscal year.
In terms of reduced costs, this year’s AIP has been allocated K109 billion, down from K117 billion last year.
Meanwhile, Neno District beneficiary Andrew Chatata said he hopes that the fertiliser that has arrived in Neno will be enough for the beneficiaries.
“I am happy that AIP fertiliser has arrived here because rains come earlier than in other areas here. I hope the fertiliser that has arrived will be enough for all targeted beneficiaries.
“Last year, we struggled because inputs arrived late and it became difficult for beneficiaries to redeem inputs because the rains made roads impassable,” Chatata pointed out.
Group Village Head Phombeya of Balaka District, on the other hand, indicates that only four people from his area, which is under Traditional Authority Phalula, have benefited from the 2023-2024 AIP.
“This is despite that there are 3,400 households in my area.
“Four people have been earmarked for AIP and, as a leader, I am very disappointed with the number of people who have benefitted from this year’s AIP. I do not think the rest of the population can afford to buy fertiliser due to financial problems,” he explained.
One of the villagers, 75-year-old widow Namasina Chimdzakazi, who stays with six grand-children, is equally worried.
“I think I wasted energy and time preparing my 1 acre field for this year’s farming season. I cannot afford to buy a bag of fertiliser at K75,000,” she lamented.
For her, changes to this year’s AIP are a pain in the flesh.
To development partners such as the World Bank, they represent a move in the right direction.
In the end, the best determinant of success or failure of the 2023- 24 AIP season will be yields in the field.
