SFFRFM wants K90 billion for recapitalisation
Demands 89,000mt of fertiliser
Smallholder Farmers Fertiliser Revolving Fund of Malawi (SFFRFM), which is a public body, has disclosed that it needs K90 billion for recapitalisation.
The government created SFFRFM in April 1988 by way of setting aside funds worth 89,000 metric tonnes of fertiliser to cater for the fertiliser requirements of smallholder farmers across the country.
The fund has been playing a key role in the distribution and supply of commodities under the Affordable Inputs Programme (AIP).
SFFRFM Chief Executive Officer (CEO) Richard Chikunkhuzeni told members of the Agriculture and Natural Resources Budget Cluster of Parliament, which is scrutinising budget allocations, that the funds would go a long way in capacitating the institution.
“Instead of growing the fund, the opposite happened between 1999 and 2004, when the fund was depleted due to a change in the operating model of SFFRFM from a reserve agency to a trading company, leaving the institution with no working capital.
“So the recapitalisation proposal is [meant] to restore this original position so that SFFRFM can again start to fulfill its mandate of ensuring the availability of fertiliser to all smallholder farmers across the country,” Chikunkhuzeni said.
He said K90 billion is an approximation of the required amount for the restoration of the 89,000 metric tonnes as a re-starting point for the fund.
The CEO said the metric tonnes are in “no” way related to the AIP.
Chikunkhuzeni, however, said AIP can benefit from the recapitalisation money on a need basis.
“In other words, the 89,000 metric tonnes are commercial fertiliser stocks open to all smallholder farmers,” he said.
Commenting on the matter, co-chairperson for the Agriculture and Natural Resources Cluster Sameer Suleman said SFFRFM should be given the money to buy fertiliser, and not the Ministry of Agriculture, saying officials at the fund know how the fertiliser market operates.
“If you go to SFFRFM today, you’ll not be able to buy fertiliser because they don’t have the money to buy stocks. Where has their fertiliser gone? Government took their fertiliser and never paid them.
“But, you see, this is a revolving fund; you give them the K90 billion and you are done with them. They will revolve it, they will make profits and, in the long run, the fund will start doing well. If we can’t fund these institutions then forget it; we will be buying expensive fertiliser,” he said.
Agriculture policy expert Tamani Nkhono Mvula described the issue as tricky but said the government should provide funds for recapitalisation.
“It is necessary. SFFRFM should be able to recapitalise and have as many markets as possible. This year, we have had issues with AIP because most SFFRFM and Admarc markets were not in good shape. So, I believe that these resources can also be used to address such [problems],” Nkhono Mvula said.
But Finance Minister Sosten Gwengwe has advised SFFRFM to submit its request through the Ministry of Agriculture.
“They need to put up a formal case for that through their parent ministry,” Gwengwe said.