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GOVT COULD SAVE K22BN ON FISP—ECAMA

Ecama proposes government and beneficiaries to  equally bear the cost of Fisp
Ecama proposes government and beneficiaries to equally bear the cost of Fisp

Government could save a whopping K22.4 billion (US$54 368 932) in the implementation of the Farm Input Subsidy Programme (Fisp) if the cost of purchasing fertiliser could be equally shared with beneficiaries, the Economics Association of Malawi (Ecama) has calculated.

The proposal by Ecama, seen by Business News yesterday, is part of Ecama’s submission into the 2014/15 national budget.

Currently, Government buys 160 000 metric tonnes of both Urea and NPK and spends K46.4 billion at a cost of K14 500 per bag for 3.2 million bags weighing 50 kilogrammes.

But according to Ecama proposal, going by the current cost of fertiliser of K15 000, it means government would pay K7 500 and the beneficiary would pay K7 500, unlike the current K500.

“From the calculation, government would save roughly K22.4 billion which is enough to construct the 60 kilometre Lirangwe-Chingale-Machinga road projects to class a bitumen or the part of the Lilongwe old airport Kasiya-Santhe Road project. Money enough to build Phalombe District Hospital,” argues Ecama in the proposal.

The association also said with this proposal, government would save a lot of money that can be used for other equally important development projects like improving extension, buying teaching and learning materials.

During a pre-budget consultation meeting in Lilongwe, Ecama president Henry Kachaje noted that there is no doubt that the Fisp has had a positive impact on food security but said it is an open secret that the burden on the national budget is unsustainable.

Kachaje said there is need for government to systematically start reducing the level of subsidies and seeking a higher contribution from the beneficiaries.

Reacting to Ecama input, Secretary to the Treasury Newby Kumwembe assured that the proposals by the economic think-tank and others from the Civil Society Organisations (CSOs) would form an important input into the budget proposal which is set to be presented before parliament in September 2014.

“The government believes in the inclusion of all stakeholders in the formulation of policies that should translate into sustainable growth and development of our county,” he said.

In his State of the Nation Address, President Peter Mutharika explained that government will continue to implement Fisp to support maize production by subsistence maize farmers.

“Government will abolish the coupon system and put in place measures to ensure that the subsidised inputs are made available to subsistence maize farmers who deserve it,” said Mutharika.

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