I hate to burst the bubble, but AIP is a colossal failure

The Tonse administration believes it has pulled off a joker with the Affordable Inputs Programme (AIP), touting it as its single most successfully executed campaign promise that catapulted the alliance and its leader Lazarus Chakwera into State House and the levers of government power.

Even yesterday, President Chakwera, speaking during the State Opening of the Third Meeting in the 49th Session of Parliament and the 2021/22 Budget Meeting in Lilongwe yesterday, could not help, but gush and self-congratulate.

“Agriculture remains the main driver of the projected growth in 2021 on account of the rolling out of the Affordable Inputs Programme [AIP]. Crop production, which grew by only 3.4 percent in 2020, is expected to accelerate to 7.1 percent in 2021, reflecting the level of success brought about by the AIP, a success, which every well-meaning Malawian ought to applaud.”

It is true that AIP is the most radical reform of agricultural subsidies in Malawi since the introduction of the Farm Input Subsidy Programme (Fisp) in 2005/06. Sure, more people cultivated more maize on their land this year than ever before.

With well distributed rainfall, very little fall army worms and locusts visiting fields coupled by minimal droughts and flooding, aggregate national crop output, especially maize, has been great.

Malawi is expected to produce around four million metric tonnes of maize, surpassing the 3.7 million metric tonnes outturn for last year.

But guess what?

In percentage terms, that is an increase of just eight percent or a paltry 300 000 tonnes more than what Fisp produced in 2020.

But if you look at the numbers—both in terms of the cost of the programme and the beneficiaries, AIP is the most wasteful and most unproductive welfare programme ever in Malawi. At K160 billion, the AIP budget is 357 percent more than Fisp’s K35 billion.

You mean as a country, we spent 357 percent more of taxpayers’ money to increase yield by less than eight percent? And we call it success?

AIP reached 3.8 million faming households against Fisp’s 900 000, representing an increase of at least 322 percent. You mean the additional 2.9 million households that AIP added to the beneficiary list only added 300 0000 metric tonnes to the national maize output when just 900 000 in Fisp could produce 3.7 million?

I mean, has Tonse worsened governing mediocrity so much that such spending inefficiency can be touted as success by no less a person than the President of the Republic of Malawi?

Is that how Tonse will define its success on food security, wealth and job creation—the three focus areas for the administration over the next four years?

Government quadrupled the inputs subsidy budget and doubled the country’s agriculture budget just to add a measly eight percent to crop output and then proceeded to celebrate this mediocrity endlessly?

Are we, as a people, so cursed that we believe handclapping—even for the most bizarre of success claims—can rid us of the spell we are under?

If you look at how these a g r i c u l t u r a l s u b s i d i e s , especially AIP this year, have worsened budget deficits as a ratio of gross domestic product (GDP) over the past 15 years; if you look at the fraction of the budget that AIP has grabbed compared to output, you wouldn’t be celebrating.

Ironically, the President himself acknowledges that some of this expenditure cannot be sustained and are worsening budget deficits.

He said in Parliament on Wednesday: “Madam Speaker, during the past three years, fiscal deficits have been widening, from 4.6 percent of GDP during the 2018/19 fiscal year to 8.8 percent of GDP during the 2020/21 fiscal year, resulting in the rise of the public debt stock. The widening fiscal deficit is largely attributed to growth in expenditure that is beyond available resources, which has forced government to turn to domestic borrowing, with consequences for the real sector in the form of crowding out effects and higher interest rates.”

Meanwhile, President Chakwera is relying on AIP—consumption spending to produce maize, most of which is consumed by the producing households anyway—to return the economy to growth rates that are high enough to make Malawi a middle income country by 2030.

Some jokes are really mirthless. n

With Ephraim Munthali

‘…if you look at the numbers— both in terms the cost of the programme and the beneficiaries, AIP is the most wasteful and most unproductive welfare programme ever in Malawi. At K160 billion, the AIP budget is 357 percent more than Fisp’s K35 billion’ Feedback: emunthali@mwnation.com