Over the past 50 years since Malawi became an independent nation, agriculture has remained the main stay of the economy and the likelihood of the state of affairs remaining the same in the next 20 years or so is very high.
Over the years, agriculture has been the major employer, employing about 80% of the workforce, highest contributor to the GDP at 39% and account for about 80% of all export earnings, contributing more than 70% of all the manufacturing sector raw materials and about 60% of the total income of the rural communities, CISANET National Director Tamani Nkhono-Mvula shares his views.
However, before giving a highlight of the successes and challenges we have encountered over the past 50 years let me give a small overview of the agriculture sector since independence. It has to be noted that the Malawi’s agriculture sector has basically undergone three phases of transformation. With reference to the reforms that have taken place over these years, I will categories them as Pre-reform period (1964 – 1979), Reform period (1980 -1993) and also the post reform period (1993- today).
It has to be noted that before the attainment of multiparty democracy much of the decisions in as far as policy is concerned were very much vested in the executive and in most cases the Legislature was being used to endorse what the executive has decided upon.
The one party system between 1964 and 1979 was characterized by an extensive system of patronage and neutralization of any interest group perceived to be a potential source of political dissent. During this period, agricultural policies were guided by well-articulated documents containing statements of development policies.
These documents were the Development Plan of 1965 – 1969 and the Statement of Development Policies 1971 – 1980. These policies were a prescription of the Executive arm of government and all development programmes were expected to align with these development policies. The agricultural policy focus during this period was promotion of import-substitution industrialization and the increasing role of the agricultural sector in economic development.
This being the case, agricultural policy revolved around the promotion of large scale farming which grew at 17% per annum as opposed to smallholder sub sector which grew at 3% per annum. Export crops such as tea, sugar and coffee were all dominated by commercial estate sector while smallholder farmers’ participation in export crop production was restricted to cotton and groundnuts, through a coordinated system of state marketing and state administered credit system.
There was also a system of control of agricultural produce prices and subsidization of agricultural inputs. The agricultural sector was under the direct control of the President who acted as Minister of Agriculture for almost the entire period. It also has to be noted that some of the policy decisions that were made during this period have tremendously contributed to the trends of agricultural production today.
The heavy investments that were made on research and extension development of maize as a food crop and tobacco as a cash crop have contributed to the polarization of the sector that we are experience today where these two crops are the two major crops, as a food crop and also a cash crop respectively.
However the interest that Government put on agriculture, contributed greatly to agriculture infrastructure development, for instance, much of the irrigation infrastructure today was developed during the period 1965 and 1980. This is also the case with most ADMARC warehouses and much of the agricultural infrastructure.
REFORM PERIOD, CHANGE IN ECONOMIC POLICIES
The reform period of the agricultural sector in Malawi started in around 1980. This was a period of change in economic policies which followed the adoption of structural adjustment policies under the auspices of the World Bank and International Monetary Fund. The policy making process during this phase was largely driven by the Bretton Wood Institutions.
The Government reviewed its role from being a policy formulator and implementer to a policy initiator and regulator. There was very little voice from stakeholders to influence the policy directions as well as no real participation of stakeholder groups such as the legislature, farmer groups, the civil society and the private sector in shaping the policies and agricultural policies in particular.
Through the Structural Adjustment Programs (SAPs), restrictions on production of some strategic commodities like burley tobacco by smallholder farmers were removed under the Smallholder Burley Scheme which allocated licenses to smallholder farmers to grow burley tobacco on customary land. The objective of the scheme was to enhance smallholder access to diverse sources of income generating activities as a way of reducing poverty. Other reforms that took place during this time include the removal of agricultural input and output marketing controls, price decontrols, and the privatization of state-owned enterprises amongst others.
This period brought about a major paradigm shift on how agriculture development was being perceived. The thinking was that the decline of Government directly participation in agriculture will bring about an increased participation of the private sector, which may improve efficiency in the agriculture sector. However the question that we need ask ourselves is whether this indeed took place, whether SAPs brought about the efficiency they were expected to bring.
The post reform period started in the mid 1990’s when the Government put in place various national frameworks to respond to the need to increase contribution of agricultural sector to national development. This included among others, the following interventions: Vision 2020, formation of the Malawi Rural Finance Company (MRFC) to provide agricultural credit to smallholder farmers replacing the Smallholder Agricultural Credit Administration (SACA) and the Poverty Alleviation Programme (PAP) which emphasized on the need to raise national productivity through sustainable broad-based economic growth and socio-cultural development.
Though the last subsidy on agriculture was removed in 1994 as part of the implementation of the SAPs, where agriculture received as low as 4% of the national budget, we saw some level of reversal to some of the policy changes that took place during the reform period being brought back. It has to be noted that Malawi’s agriculture has never survived without some level of subsidy and the complete removal of subsidies led to a low production resulting in the country experiencing about 200,000MT food deficit. To import food to cover this food deficit cost about three times the amount we would have used to subsidies production to produce it.
This brought about the logic of subsidies over food imports and also that subsidizing production has much more multiplier and knock-on effects on poverty as compared to food imports. From 1997, Government started again subsidizing production in form of Starter Packs which was later changed to Targeted Input Programme. These programmes were being supported also by other input programmes like the APIP program. The culture of subsidies increased until today we have the current form of subsidy called the Farm Input Subsidy Programme (FISP). Due to the subsidies we have also seen an increase in agriculture budget which went as high as 20% of the national budget in 2013.
Though the agriculture sector has of late received so much attention and massive financial investment through the national budget, donor projects and NGOs, the challenge of hunger is still far from being eliminated. In my view the challenge has not been the amount of resources going to the sector but how those resources are being utilized. Over the period the country has been implementing the FISP much of the resources have been channelled towards the programme, at times accounting for more than 50% of the agriculture budget.
The challenge that has faced the FISP has mainly been the management of the program starting from the identification of suppliers, procurement, targeting of beneficiaries and distribution of the inputs. At time the quality of the inputs left a lot to be desired. However, the major challenges facing the sector that need concerted efforts if we are to fight and eliminate hunger include; inadequate access to credit by the smallholder farmer.
Currently it is extremely difficult for most farmers to access credit from the Commercial Banks as agriculture is regarded as a high risk sector and also when farmers manage to get the loans the conditions that are set are not friendly to farming. Investments in agriculture take time to reap the benefits while Banks wants one to start repayment as soon as possible; The other challenge that is making most of our smallholder farmers to be stuck in poverty and subsistence farming are low output prices that are offered to the farmers.
Though the Government has in recent years been setting minimum prices to help the farmers breakeven but lack of farmer organization for collective bargaining has led to most of them been reaped off by the traders. This is also coupled with the fact that most of the crops are sold raw by the farmers; inadequate access to agricultural inputs and other improved technologies is also an issue that needs attention.
The FISP has shown us that an increased use of fertiliser and hybrid seed will lead to increased harvest, however most of our farmer are still not able to assess these: land degradations is probably the major disease that needs to be cured. It is said that Malawi soils are suffering from nitrogen deficiency. This needs all sorts of ways to be dealt with, which may include conservation agriculture, agroforestry and above all an increased use of fertilisers; inadequate extension and adoption of technologies is also one of the major challenges facing the sector.
There have been a lot of technologies that have been developed by research but the uptake of these is very low. The reasons for these are many and they may include high levels of illiteracy among the farming community, the cost of the technologies, at times it could be the complexity of the technology but on top of these I feel it is the quality of our extension services that are leading to low adoption; Weak intra and inter sectorial linkages is also another challenge that is frustrating the growth of the sector.
Agriculture is a sector that is very much dependent on other sectors for it to perform, that is why there is need for good intersectoral linkage with environment, water, education and others; Climate change and over dependency on rain fed agriculture is a challenge that also need much concerted efforts to be dealt with. Climate change will be the major challenge affecting the agriculture sector in the next 50 years. There is need therefore to come up with technologies that will foster adaptation of the Malawi's agriculture sector to climate change.
These may include increase investment is irrigation, drought resistant varieties and crop diversification. There is also need to increase investment in livestock production especially small ruminants that are very resilient to shocks and stresses that come a a result of climate change.
In conclusion, I may say that Malawi’s agriculture looking ahead has a high potential to contribute to contribute to economic growth and poverty reduction. An increased investment in agriculture has the highest potential to reduce poverty than any other sector. It is said that a 1% increase in agriculture GDP has the potential of contribute more than 3% reduction in poverty. On subsidies, I should say that Malawi’s agriculture still needs subsidies if we are to reap any benefits out of it.
Civil Society Agriculture Network