Bravo Chakwera on mega farms

President Lazarus Chakwera has gotten it right. Mega farms are the way to go. Malawi’s economic transformation requires robust investment in high productivity areas. Mega farms will turn the country from being a largely importing and consuming, to a predominantly exporting nation. Mega farms are a grand idea, sustainable source of forex and platforms for ending hunger.

For many years, agriculture has been said to be the backbone of Malawi’s economy. Development plans and poverty reduction strategies have been premised on the need to improve agricultural productivity, introducing agri-business and embracing technologies designed to increase gains in agricultural commercialisation.

During the Bingu wa Mutharika presidency, Malawi defeated hunger and registered food surplus between 2005 and 2010. The Malawi model for food production was admired and emulated by the African Union as a shining example.

Sadly, the story is now different. Malawi suffers perpetual food shortages with some sectors of the population categorized as hunger-stricken for consecutive years.  National Food Reserve Agency (NFRA) has been stocking inadequate maize recently. Maize prices have skyrocketed to over K40 000 a bag of 50 kilogrammes. With the El Nino weather pattern, the threat for hunger crisis is real.           

The 44 percent devaluation has wiped off purchasing power for the budget money allocated to government for buying maize. This is against the backdrop of a total of 4.4 million people that are threatened with hunger and in urgent need of food aid. Malawi is a perfect paradox of an agricultural country that suffers perpetual food shortages.

A myriad of policy plunders account for the biggest part of Malawi’s food security paradox. Misconceived subsidies and badly implemented Agricultural Inputs Programme (AIP) stand top of the list. Government spends billions of kwacha on fertiliser subsidies which do not seem to solve the food shortage challenges. A sum of K109 billion will be spent this year on AIP alone. The other year, AIP budget was K120 billion, representing over 50 percent of the total agricultural budget.

According to the International Food Policy Research Institute (Ifpri), Malawi’s agricultural subsidy programme is not cost effective. Ifpri observes that for every kwacha spent on subsiding fertiliser, less than 8 tambala of maize is produced. This is a 92 percent loss, high level economic inefficiency and sheer wastage of scarce budget resources. Before the 44 percent devaluation, K3 236 worth of fertiliser produced only 1Kg of maize.

Corruption worsens the situation. Every year, Anti-Corruption Bureau handles cases relating to AIP. The subsidy program is captured by corrupt elites and cartels that are driven by conniving state-business relations. AIP money is actively subsidising corruption. However, billions spent on AIP could be diverted and invested in mega farms which make more sense than the corruption-infested AIP.

Mega farms can in turn produce cheaper maize to feed the nation and rescue hungry populations from starvation. Mega farms can also anchor rural industrialisation. Mega farms opened recently by Chakwera need to be supported and promoted.

Malawi’s food crises are also driven by institutional politics that are misaligned to the objectives of improving agricultural productivity.  Agricultural Development and Marketing Corporation is trapped in an arena for plunder, politics of patronage, and a playground for rewarding party loyalists.

Similarly, NFRA often suffers political capture through appointment of boards based on political appeasement.  Maize sellers can only access the grain silos if they bribe NFRA officials. Ministry of Agriculture appears helpless in the face of these powerful political forces. Even the best Minister of Agriculture soon gets torpedoed by AIP politics of corruption. 

Meanwhile, Malawi continues on the downward path as an agricultural economy with no meaningful agriculture taking place. If Chakwera’s mega farms are supported, Malawi will end hunger and become the bread basket in this part of Africa.