The 2016/2017 agriculture budget is probably the most unique budget in the past 10 years, in its design and also priorities, writes CISANET National Director Tamani Nkhono-Mvula.
We have seen in this budget a reduction in allocation to the ‘sacred’ Farm Input Subsidy Program (FISP) as a percentage of the whole agriculture budget by about 50% from MK60 billion in the 2015/2016 budget to MK31 billion.
From the look of things, the 2016/17 budget is more of a crisis budget that is trying to respond to the food crisis the country is facing with increased funding to maize imports and promotion to large and small scale irrigation.
Again the allocation to the agriculture sector is by far the largest allocation in the national budget with MK198.5 billion representing 17% of the budget and if we add the resources going to the sector through the local government then agriculture will have resources in excess of well over MK200bn.
However, the figure may look big but if you compare it with the needs of the sector at the moment, what we have in the budget is a drop in the ocean. For instance, there are reports that the country will need to import about 1,000,000 MT of maize from as far as Brazil and Ukraine and to do that we will need over MK200 billion, which is way about the entire allocation to the agriculture sector.
One other striking thing about the agriculture budget is its continued neglect of vital sectors like extension, research, livestock and crop diversification. Our plea for a revised allocation to FISP over the past years was in the hope that allocations to these sub-sectors will be increased. We cannot neglect research in this era of climate change, we need drought resistant and early maturing varieties of cereals, we need to come up with climate smart and water harvesting technologies that are suited to our environment.
Though the budget may look unrealistic due to the needs compared to the allocation, one important thing is the general realisation by the framers of the budget that we cannot do things as usual. The environment has changed and our way of doing agriculture has to change. We also understand that Government is going through a hard time with the reduction of donor support towards the budget. The allocation to the FISP, which enjoyed so much political support needed to be revised downward as over the past two years, as there has been a very big mismatch between the cost of the program and its benefits. We understand that FISP was introduced to answer the challenges of soil health, which is still a very big problem, however we have a much bigger problem today, which is drought. We need measures that should make water available through irrigation. The reduction in the allocation to FISP is not because it has lost its relevance but because a much bigger challenge of drought has emerged and with the small purse that our country has, trimming the program was the necessary evil that needed to be done. The other thing that I pointed out was the meagre allocation of MK35bn towards food imports, we however believe that this is a starting point. Government has put on the table what it can manage and we hope the NGOs and the donor community will come in to support, otherwise, God forbids, this food crisis may lead to loss of life.
It is difficult to say if the allocation to the sector finally meets the needs of the people because what the people want at the end of the day is that they should have food on the table and money in their pockets. In this crisis budget, the necessary has to be done to prevent people from dying of hunger. However, people need access to inputs like seeds, fertiliser, irrigation equipment, good markets for their produce and others, this budget is by far coming anywhere close to guarantee these things. It may be argued that provision of these things is not the responsibility of Government and that private sector has to come in to support but it must be understood that Malawian agriculture for the past 50 years has never survived without a government subsidy in these areas. The only year there was a zero subsidy to agriculture was in 1994 and we all saw the consequences of that. The level of poverty in this country is deep and widespread and smallholder farmers need to be supported if we are to avert hunger.
On whether this budget is in tie with and promotes the national development plans, it is both yes and no but to a greater extent, no. A national budget in Malawi is developed to respond to the targets as set in the Malawi Growth and Development Strategy (MGDS). The MDGS 2 which has been the Medium Term Framework for Malawi in the past 4 years will be coming to an end on June 30th, after that we will be walking ‘aimlessly’.
The current budget was supposed to have been developed based on MDGS 3 targets but that document is not there. My question is; How have we developed this budget? It seems this budget has been developed haphazardly without following any medium term framework because we don’t have one and we can’t use the targets we had last year. In other words using the targets for MDGS 2 is wrong and must not be done. Probably we needed to develop an interim or transitional strategy but even that we don’t have.
The same goes for the Agriculture Sector wide Approach (ASWAp) which will also be coming to an end. Without the MDGS 3 in place and the revised ASWAp finalised, then it means we have taken a journey without a destination. This means that the budget is not addressing the agreed medium term goals as those goals currently do not exist. However for irrigation, the Master Plan is in force but still the Master Plan has to be aligned to the MGDS.
The budget cycle provides some space for civil society engagement through the Ministerial budget consultations, however these consultations have turned to be ceremonial activities as in most cases they don’t serve the purpose. A budget in most cases serves as a tool for the ruling part manifesto to be achieved, in that way whatever sensible thing you can say contrary to their desires will not be taken into consideration.
For instance, no amount of argument will change the Government stand on Malata subsidy, as nothing could have changed the mind of Joyce Banda on Mudzi Transformation and a cow a family program, Bingu on FISP and Shire-Zambezi, Bakili on Starter Pack and it doesn’t matter whether these are MGDS targets or not but the budget is always hijacked by political interests to the extent of diverting resources from other budget lines to support these. I would have loved if these consultations are really done in good faith.
The other issue is the disconnect between the budget and the implementation processes. Other sectors are perpetually underfunded even if the budget provides for a good allocation, they still don’t get as is stated in the budget, e.g. the GBI. While programs like FISP always get more than what was budgeted.
However if the ministerial consultations are anything to go by, I may say that there are some consultations that are done. Over the past five years our plea has been a revision on the FISP budget and implementation processes and also an increased funding to irrigated agriculture, research and extension services. We have however seen in the current budget some of these being taken into consideration, however we feel that the reforms in the FISP and interest in irrigated agriculture has come because of the current crisis.
CISANET has been involved in budget monitoring for the past 10 years and this year budget, is a bit different in terms of priority as food imports has taken a big chunk of money, something that has not happened in the past 10 years, mainly because the country had been be self-sufficient in food.
On the hand, there is also an increase in interest to irrigated agriculture and to whether this is an improvement is yet to be known as implementation of the budget is more important than the budget itself in the case of Malawi.
This article was first published by the Sunday Times newspaper in Malawi on 19th June 2016.
It was authored by Tamani Nkhono-Mvula, CISANET National Director.