FUM defers EDF due to export ban

The Farmers Union of Malawi (FUM) has deferred the use of the Export Development Fund (EDF) to the 2013/14 farming season because they could not get an export licence from the Ministry of Industry and Trade.

FUM president Felix Jumbe, in an interview last week, said the union needed the export permit in October last year, which would have enabled their offtaker, Senwes, a diversified agribusiness firm, to give farmers contracts.

But because of the export bans, this was not possible.

“We prepared to engage people in 2012/13 [farming season] to produce soya, groundnuts, rice and commercial maize destined for export and we had an undertaker to off take and issue contracts to farmers associations,” said Jumbe.

He said they had over 500 commercial farmers and associations including 97 from Mzimba and Chitipa, but the challenge was to get an export licence from the ministry to guarantee that all production from this arrangement is allowed for export.

EDF aims to improve access to finance for non-traditional crops such as soya, groundnuts, beans, pigeon peas and rice, but has export potential.

The initiative will encourage farmers to grow non-traditional export crops and be financed through guarantees to their banks provided they have an export order or have identified off takers to provide an order to buy from farmers.

But Ministry of Industry and Trade spokesperson Wiskes Nkombezi has assured FUM that no export restrictions will be issued, particularly on such crops as soya, beans, rice and other non traditional export crops.

He, however, said with regards to maize, where there is proof that a farmer produced maize on a commercial basis, the ministry will have to balance the commercial interests of the farmers and the food security interests of the country.

“We should all accept that maize is a very strategic crop as far as food security is concerned and, as such, government through the Ministry of Industry and Trade will also look at food security needs of the country,” said Nkombezi.

He said the ministry will, at all times, engage players in export trade to ensure that decisions reached on any export restriction are based on broad consensus from both government, the private sector, producers (such as farmers) and other players.

Nkombezi also said the ministry is looking at streamlining the export licensing regime

to make it easier and shorter for people to get an export licence to promote exports.