Malawi, a small, poor state in sub-Saharan Africa has experienced numerous and severe famines for many years. So after the major crisis of 2005, the Malawi government decided to completely reform its agricultural policy. The objective? To protect its agriculture, considered to be one of its most strategic sectors.
At the heart of this new policy: a system of input subsidies for the country’s farmers to increase production. The symbol of a “renewed” African agricultural policy, Malawi is now a “star thanks to its massive growth in corn production”, the economist and agronomist Mathilde Douillet tells us.
In her latest communication "Boosting agricultural production in Malawi: success and limits"1, published by the FARM Foundation, that we recommend reading, she reports on the measures taken, their successes and their limits.
momagri editorial board
Undeniable success, obvious limits
Self-sufficiency is not food security
The growth of agricultural production in this country has been an ongoing success for several years. This is in contrast with the many food crises experienced by Malawi over the previous decade and has even enabled them to export corn. But caution is heeded when drawing lessons from their experience. Firstly, the success is partly due to favorable weather conditions and it is unclear whether crops will remain at an adequate level during heavy rain or excessive dryness.
Furthermore, Malawi illustrates a fact found elsewhere: national food self-sufficiency alone is not sufficient to ensure national household food security. One might expect that an increase in maize production by small producers leads to improved food security for households, but this does not yet appear in the data available. Access to food is crucial, as established by the recent distribution of food to 1.5 million needy families.
A success to be confirmed long-term
Input subsidies are the single most visible measure set up by the government, they are considered an innovative measure because they are based on a voucher system. Given the administrative burden of such a program, and given the volume of inputs concerned, the fact that they have been distributed in time for the crop is a major achievement. In theory, the voucher system is very efficient because it targets the beneficiaries, reinforces the private network of input supply and gradually reduces public aid.
The cost of fertilizer subsidies is often singled out. But its effectiveness in terms of increased production is well established. When channels remain poorly structured, encouraging the use of inputs can be a great way to get a quick increase in agricultural production. That is why this measure is highly valued by governments, particularly at election time. However, to be truly successful, it should also promote the structuring of the input distribution system and the creation of services to farmers. It is also essential that the state acts in time, so that its policy has an impact on supply chain organization. How can we ensure that public budget supports the cost of the program long-term?
An experience transferable to other countries?
A major lesson we can learn from the Malawi experience is that farmers are very responsive when given the means to increase their production. By removing the principal constraints to increasing yields, namely low input profitability because of their prohibitive cost, Malawi has shown that farmers were able to respond quickly to a changing economic environment. This reactivity can be generalized to almost all of sub-Saharan agriculture. The productive potential of African agriculture is considerable and may reach that of the best tropical regions. What is lacking are the means for production.
However, Malawi’s success does not mean that a policy for input subsidies, via a voucher system would be a remedy for development, a universal solution applicable to all countries.
In Malawi, assistance in the use of fertilizers has not eliminated the other constraints that prevent farmers from working to their full potential: particularly the lack of credit, inadequate marketing channels, lack of storage capacity and risk management tools.
Other states have embarked on a similar policy: Kenya in 2006, Ghana and Tanzania in 2008. Zambia is doing well. Following the 2008 food crisis, many countries in West Africa have also decided to subsidize fertilizer, particularly for rice production. Experience has shown that these incentives have had a fast, positive effect on production. However, all these countries face, in differing degrees the difficulties faced by Malawi: delays in input availability, removing private operators, problems with fraud. These problems could probably be reduced by improved program design more adapted to national specificities.
An exchange on experience in different countries is certainly needed. The fact remains that an input subsidies program – even if it includes private distributors, even if it targets farmers who, without it would not have access to seeds and fertilizers – only responds to short-term goals. Such a program is just one ingredient of a policy aimed at developing agriculture in a sustainable manner. It can not replace wider public intervention, focusing on public investment in research and infrastructure and to creating an environment favourable to private operators.
Malawi has understood this. That is why since 2009 the country entered into a massive investment program in agriculture, entitled the “the green belt initiative”. This initiative aims at significantly developing irrigation, developing storage and processing facilities and facilitating access to credit. Would this initiative have been developed without the success achieved through input subsidies?