Introduced in 2005 in the wake of the worst hunger period in a decade – which affected some 5 million people in 2003 – the Malawi government’s farm input subsidy programme helps small-scale vulnerable farmers to access fertiliser and seeds at heavily subsidised prices. The beneficiaries are issued with coupons which they take to designated selling points so that, for example, they can buy a 50 kg bag of fertiliser that would normally cost $37 for a mere $2.
Since its introduction, Malawi has been harvesting between 500,000 and 1 million tonnes of surplus maize every year, well above the national requirement of 2.3 million tonnes. The government has had to build significant new storage facilities to hold the surplus.
But public policy analyst Blessings Chinsinga and other critics have blamed the programme for bankrupting Malawi. In some years it may have absorbed up to 10 percent of the national budget. Chinsinga said the total spent on the programme over the past five years was in the region of $370 million, and noted that it benefits a crop that is mostly consumed locally instead of being exported to replenish the foreign exchange it is draining.
The programme, questioned from the outset by donor agencies, has also been beset by examples of massive fraud and corruption, so that many of the registered beneficiaries have been unable to access the inputs at the official price. Nevertheless, US development economist Jeffrey Sachs said the programme showed African nations how they can feed their people.
The late president Bingu wa Mutharika used its success to champion an agriculture-led growth plan for the continent that was named the ‘African Food Basket’, when he launched it during his time as chairman of the African Union in 2010. Mutharika justified the plan by arguing that Africa needed to adopt its own subsidy programmes to match those awarded by Western governments to their own farmers. The new government of Joyce Banda has said it will continue with the programme.
