Local maize production expensive, shows report
The International Food Policy Research Institute (Ifpri) says for every kwacha spent on fertiliser, less than eight tambala worth of maize is produced.
In its June 2022 policy note titled Are Fertiliser Subsidies in Malawi Value for Money?, Ifpri said that it costs K3 236 to turn fertiliser into a kilogramme (kg) of maize while that same kg of maize can be imported five times more cheaply at K600.
Reads the policy note in part: “If given the choice between receiving a fertiliser subsidy or a cash transfer, productive farmers will choose the former while the unproductive ones will choose the latter.
“By giving farmers this choice and ensuring that contracts to import the resulting shortfall of maize are in place, the government would spend less money on ensuring the country’s food security than by subsidising inputs for everyone.”
However, Ifpri said government would be better off securing future contracts for maize imports and giving people cash to buy imported maize to reduce the cost of ensuring a sufficient supply of maize in the country three to five-fold.
Yet Ifpri warns that continued reliance on imported food is not a sound strategic and sustainable long-term solution for an agriculture-based economy.
“In the medium-term, it will be important for Malawian farmers to improve the response of their yields to fertiliser. In the long-term, it will be necessary for productive farmers to move from subsistence to commercial agriculture, and for unproductive ones to move out of agriculture altogether,” reads the policy note in part.
Last year, government spent K120 billion or over 50 percent of the agricultural budget on subsidising fertiliser where each beneficiary paid K7 500 per 50 kg bag of NPK and Urea, with the government’s contribution set at K19 500 per 50kg bag.
In the current financial year, AIP has claimed K109.5 billion, representing 85 percent of the agriculture sector budget.
Minister of Agriculture Lobin Lowe is on record as having said AIP will this year take into account the rising fertiliser prices and the 25 percent devaluation of the kwacha when determining the number of beneficiaries and prices.
