Malawi’s agriculture sector will remain critical to the government’s Economic Recovery Plan (ERP) and the wider economic growth and development, an economist has said.
The agriculture sector has over the years been enjoying one of the largest allocations in the national budget.
For instance, in the 2012/13 budget, government allocated K68 billion, about 16 percent of the total budget, to the agriculture sector.
Finance Minister Dr. Ken Lipenga noted that this doubling of resources was done in recognition of the central role the sector plays in the economy.
According to the breakdown of the allocations, the seven-year-old Farm Inputs Subsidy Programme (Fisp), which has enjoyed the lion’s share, was allocated K40.6 billion for the purchase of 150 000 metric tonnes of fertiliser comprising 75 000 metric tonnes of Urea and 75 000 metric tonnes of NPK which will be distributed to 1.5 million farming families at a price of K500 per bag.
Within the provision of Fisp, K7.6 billion was for the buying of maize and legume seeds for distribution to smallholder farmers across the country.
But last week, in a statement outlining the achievements of ERP signed by Lipenga, government provided new figures which indicated the subsidy budget has been increased to K57 billion, a 40.3 percent jump, to cater for the additional tonnage bought.
The allocation for the vote also included K1.3 billion for the purchase of maize from farmers for the Strategic Grain Reserve (SGR).
In the budget, government expressed its desire to promote livestock farming with an allocation of K900 million under the Presidential Initiative on Livestock (K900 million) to promote the sector.
Additionally, there was an allocation of K1.5 billion specifically for the development and promotion of special crops for the export market.
Under the special crops, government is targeting crops such as beans, pigeon peas, sugar beans, groundnuts and rice to upscale their production particularly for the export market.
Experts believe that these crops have the potential to bring in substantial amount of foreign exchange to supplement tobacco.
Tobacco accounts for more than half of the country’s total export earnings. But last year, the earnings dropped to $177 million (K60 billion) from the previous year’s $293 million (K100 billion, at the current exchange rate).
The drop in earnings was on account of low output because growers had been discouraged the previous year due to depressed prices. Output dropped to just under 80 million kilogrammes (kg) from 230 million kg the year before.
Industry experts have predicted a jump in output this year and improved prices.
Tobacco Control Commission (TCC) chief executive officer Dr. Bruce Munthali earlier said the tobacco industry will be one of the pillars that will help recover the economy.
Economist Dr. Colleen Kaluwa, a lecturer at University of Livingstonia, said in an interview that agriculture, which roughly contributes about 30 percent to gross domestic product (GDP) and 90 percent of export revenue, will remain key to economic recovery.
“Malawi’s economy is propelled by the agriculture sector. The years when agriculture performance has been well, the economic growth has been robust,” he said.
According to the government’s annual economic report 2012, Malawi’s economy grew, on average by 7.5 percent between 2005 and 2011 largely propelled by the good performance in the agriculture sector, thanks to good rains and Fisp.
But Kaluwa said the country has the potential to upscale its agriculture production by fully engaging in irrigation farming.
“The Green Belt irrigation initiative is a sure way to help the country realise its potential in the agriculture sector,” he said.
In the current budget, the initiative was allocated K1.0 billion and the construction of multipurpose dams was allocated K500 million whereas the Malawi Irrigation Development Programme received K200 million.
In a recent interview, Farmers Union of Malawi (FUM) president Felix Jumbe while hailing the initiative, warned that without sound objectives and strategies for implementation, it could be a failure.
“We have big rice schemes such as Hara, Wovwe, Lufila, Chonanga, Bua, Bwanje, Domasi and those in the Lower Shire that are unable to produce for export market. This is because smallholder farmers have been left to do things on their own without organised financial support for their inputs,” he said.