Abolish ineffective subsidy

It is touted as a solution to Malawi’s chronic food security.

It is funded in millions every financial year.

However, the Affordable Input Programme (AIP) has proved a fruitless burden to the country’s ailing economy.

Despite all the funds it gets, there has been little to show for as the country remains food insecure.

Now, the International Monetary Fund and World Bank want it abolished.

There are political reasons why government maintains the programme despite its ineffectiveness.

The political machinery is afraid of a possible backlash from farmers who are possible voters. But the farm inputs subsidy should not be treated as a popularity contest, but public spending that requires a clinical cost-benefit analysis.

Our governors might also be clinging to AIP as a cash cow of their private businesses and corrupt cronies, who frown upon better alternative pathways.

Clearly, the programme must be replaced by an effective and robust model.

In its current state, the subsidy is simply not attainable and sustainable.

The country’s weak economy cannot continue to give its people handouts by funding a subsidy that does not pay back the funds invested.

Such an unsound fiscal policy only drags the country into its drastic decline.

AIP, formerly Farm Input Subsidy Programme, was introduced to help poor people access seed and fertiliser at a cheaper price.

However, it no longer serves that purpose as it now benefits the rich and political elites through dubious and corrupt means.

It also drains billions through corrupt and bureaucratic practices.

The bizarre tales of suspicious procurement of fertiliser from butcheries and drugstores show that AIP’s original goal has been abandoned in favour of proceeds of corruption.

Government’s decision to keep buying farm inputs from middlemen is a cause for worry. Billions are being lost through quirky fertiliser deals that exemplify how not to do government business.

The intermediaries’ involvement in any transaction increases the price of a commodity. As such, Malawians are not getting the best possible deal at an affordable price.

Malawians would have been paying less for a bag of fertiliser had the government cut its spending by kicking middlepersons from the procurement of subsidised inputs.

In his October 25 2023 State of the Nation Address, President Lazarus Chakwera promised that from next financial year the government will stop using middlemen.

This is a solace, but the nation can’t bank on words from a politician. Only action matters.

Politics aside, Malawi should invest the AIP billions in the much-touted mega-farms, which could help end hunger and poverty by boosting commercial farming.

Investing in well-mechanised irrigation agriculture can also bring better returns to the fragile economy.

Spending billions in a programme that will enable the country stop relying on rain-feed agriculture and get three harvests a year is surely a game changer.

It also spurs value addition. Processing such products will help create jobs and generate forex for the landlocked country.

It begins with simple initiatives like Malawi exporting tonnes of rice, manufacturing tomato sauce.

But first things first: An ineffective AIP programme must be abandoned and replaced by a winning idea.

I agree with fallen president Bingu wa Mutharika that Malawi is not poor, but the people are. Our poverty does is not about lack of vital resources but failure to put great ideas to good use.