Malawi

FEWS Malawi Food Security Report mid-Apr to mid-May 2002

Format
Analysis
Source
Posted
Originally published


EXECUTIVE SUMMARY

Most parts of the country experienced dry conditions during the past month, which is good for harvesting of various crops. Harvesting of crops is currently underway and some farmers have already finished.

The Ministry of Agriculture and Irrigation plans to release the final-round crop production estimates for 2001/02 (April-March) on June 20. These final figures will allow the updating of various food security analyses based on the second-round estimates, including the food balance sheet, a critically useful planning tool at the national level.

Information from the field and other sources indicate that the country may face a more serious food security problem in 2002/03 than 2001/02 if appropriate measures are not taken immediately to improve availability and access. Anecdotal reports indicate that some rural households have already run out of crops from the recent harvest.

The National Food Reserve Agency (NFRA) received about 118,000 MT of the 150,000 MT of the planned maize imports from South Africa and Tanzania by mid- May. However, rising commodity costs are likely to reduce the final import tally to about 135,000 MT.

Local market maize prices continued to drop in April as market demand declined as households harvest maize and other food crops. This has made most households less dependent on the market for maize, at least for the next several months.

With external funding, the government has embarked on a winter cropping program, targeting some 300,000 households with various inputs for winter cultivation. This program is aimed at increasing winter food production as one way of alleviating the impending food shortage.

1. FACTORS AFFECTING CROP PRODUCTION

a. AGROCLIMATIC CONDITIONS

Most parts of the country experienced dry conditions, which are conducive for harvesting of crops. A few areas experienced light rains, which are good for cultivation of winter crops.

The 2001/02 rainfall season (October-April) has now come to an end. The main rainfallbearing systems, the Inter-Tropical Convergence Zone and the Congo Air mass, responsible for bringing rains over Malawi, have now moved from the country. Most parts of the country experienced dry conditions this past month. These dry conditions have generally provided favorable conditions for the harvesting of various crops. A few areas, particularly in the southern highlands and along the lakeshore, experienced light to moderate rainfall due to low-level cool moist southeasterly winds from the coast of Mozambique. Locally known as Chiperoni winds, they normally occur from May to August. These rains, which are good for winter crops, are associated with cold temperatures that characterize the country at this time of the year.

b. INPUT AVAILABILITY

The government has embarked on a winter cropping program to boost winter crop production as one way of improving food security in 2002/03.

As the main season harvesting is almost through, there is a window of opportunity for increasing this year’s crop production through winter cultivation. The government and NGOs are engaging in various activities to boost production of winter crops as one way of alleviating the impending household food insecurity. With funding from UK’s Department for International Development (DFID), the government has embarked on a program to boost winter crop production by distributing free inputs to some 300,000 households for winter cultivation. These inputs include 2 kg maize seed, 2 kg legume seed (groundnuts, soya beans, pigeon peas, or beans) and 5 kg basal dressing fertilizer (23:21:0). This package is for 0.1 hectare. While winter maize production depends on residual moisture in the soil, thus limiting the expansion of winter cropping, use of hybrid varieties and fertilizer are likely to boost yields. Winter maize production was projected at 141,479 MT, or 9 percent of the overall maize production during the second-round crop production estimation exercise.

Fortunately, there is a lot of enthusiasm among farmers for growing winter crops, including maize, to improve their own food security as almost everyone is aware that they may face another food shortage this year. Most of the eligible households are preparing their fields for planting and others have already started planting. The main planting period for winter crops extends from April to July in most parts of the country.

2. FOOD SECURITY PROPECTS

a. FOOD AVAILABILITY

The Ministry of Agriculture and Irrigation plans to release final round crop estimates on June 20.

Harvesting of the various crops, including maize, is underway in most parts of the country. However, the amount of the final maize harvest for storage at home has been adversely affected by the widespread consumption of premature crops due to the food availability and access problems experienced from January to March this year. Households with very small landholding sizes are at the greatest risk of food insecurity in the coming months.

Food security prospects for 2002/03 appear to be worse than what the country experienced in 2002/02, unless appropriate actions are taken in time to avert the looming humanitarian crisis. These actions include providing emergency relief food to those in need and ensuring the import of sufficient affordable maize.

The Ministry of Agriculture and Irrigation plans to release the final crop production estimates on 20th June. The final estimation exercise is done around this time to determine the actual yield by weighing samples of the harvested crop. As reported previously, prolonged dry spells, floods, and wash-aways in some areas and reduced input use adversely affected crop production in 2001/02.

The main agricultural activity is harvesting of various crops, including maize. Harvesting of crops started a month or two earlier than normal because desperately hungry households could not wait until their crops reached maturity. This early harvest reduced the amount of the final harvest taken home for storage and future consumption. In addition, increased cases of theft of crops in the field forced some farmers to harvest earlier for fear of losing their crops.

With regard to winter crops, the main agricultural activities are garden preparation and planting.

The food security situation has improved slightly, but remains worse than expected and worse than conditions at the same time last year. According to anecdotal reports, some rural households harvested nothing because they had no seed to plant, others have already run out of maize from the recent harvest, and many are expected to run out of maize by August/September, rather than November/December when the majority normally run out. These households have few options but to wait for emergency relief and other assistance.

b. MARKET CONDITIONS AND FOOD ACCESS

The long queues of maize buyers in front of ADMARC markets have now disappeared as most households are now consuming their own recently harvested crops.

Local market maize prices continue to fall as new supplies from the current harvest reach market, improving household food security. A number of markets reported maize prices below the ADMARC price of MK17/kg.

Maize imports continue to arrive from South Africa and Tanzania. Malawi received 118,000 MT of the 150,000 MT planned maize imports by mid-May.

Private traders have already started buying maize, although some farmers are reluctant to sell, fearing food shortages later in the marketing year (2002/03).

The maize that the government imported to avert the food crisis stemming from the below-average cereal harvest in April-May 2001 continues to arrive into the country. On behalf of the government, the National Food Reserve Agency (NFRA) had received 118,000 MT of the 150,000 MT of maize imports from South Africa and Tanzania by mid - May. It should be pointed out that the final import figure will be less than the full amount because the delivered price of maize has risen over the past several months and this will reduce the total tonnage, given the fixed budget. Final imports will probably be in the region of 135,000 MT.

Although most farmers have harvested and food availability and access have improved, the post-harvest abundance will be short-lived. Malawi will need to continue importing maize to ensure that it is readily available in the markets when households begin to run out of food. Reportedly, some households have already started running out of food as most of their crop was either consumed immature or early due to the food shortage a few months ago.

ADMARC has not yet started buying maize from the farmers. Usually ADMARC waits until July/August when the moisture content in the maize is low to avoid spoilage. However, farmers harvested one or two months earlier this year and by July there may be very little maize for sale as private traders will have bought the little that is available. ADMARC entered the market too late last year to buy very much maize. ADMARC may have to depend on imports for its planned purchase of maize this year. Alternatively, ADMARC will have to offer high prices to attract traders to sell to ADMARC and not vice-versa. Without an offsetting subsidy, however, this would translate into high consumer prices by ADMARC.

The long queues of maize customers at ADMARC markets have disappeared as the current harvest momentarily meets rural household needs. This is confirmed by low sales figures in ADMARC markets. On a field trip during the recent FAO/WFP assessment, FEWS NET observed that people were not buying ADMARC maize at MK17/kg because it was now considered expensive compared with market prices ranging between MK9 to MK 13/kg.

Most local markets have maize, but as reported last month, these markets are concentrated in the urban centers where purchasing power is better than in the rural areas. All 18 markets for which data are available show drops in maize prices between March and April this year. At the same time last year, some markets were still registering maize price increases. The situation is just another indication of the widespread early harvest.

Figure 1 shows the maize price trends in selected local markets since January last year. Local market maize prices in April this year ranged between MK13.73/kg at Mitundu and MK38.10/kg at Salima. Prices in these two markets ranged between MK5.00/kg and MK10.58/kg at the same time last year. In nearly all reporting markets, current prices are more than double the prevailing prices last year. April prices in Salima, the extreme case, were nearly 7 times (585 percent) higher in 2002 than in 2001. With these huge differences in market prices between last year and this year, this year’s prices are unlikely to fall to last year’s levels, which ranged between MK9 and MK18/kg, without any large-scale commercial and food aid imports.




While retail prices are still extremely high, they are coming down. These drops come as good news for Malawi’s beleaguered consumers, even for rural households who will have to turn to the markets later in the year. Prices dropped between 4 percent at Chitipa and 54 percent at Mitundu.

Figure 2 shows both absolute price levels and percent decreases between March and April. Markets where prices are low and slow to decrease - such as Nchalo - suggest that supply and demand are in reasonable equilibrium. In contrast, FEWS NET is concerned about market areas where prices are still high and slow to decrease - such as Salima, Ntchisi, and Chitipa. These price patterns reveal relative scarcities in terms of unmet market demand for those without access to their own crops.




With the cereal shortfall for 2002/03 estimated at about 600,000 MT (to be confirmed after release of final round estimates in June), which is more than twice last year’s shortfall, there are concerns that maize prices could rise to the high levels seen in January-February - or beyond. This would cause serious food access problems since most Malawians cannot afford to pay such high prices.

To avoid a situation similar or worse than that experienced in recent months, it is important to strike a balance between relief aid and commercial imports that consumers can afford.

For the first time in years, food security decision-makers are considering the possibility of private sector participation in large-scale commercial imports. Some donors currently think that the private sector needs protection from too much food aid. They see possible government imports and subsidies as a disincentive for private sector participation in maize imports; moreover, such subsidies would reinforce the dual price system whereby ADMARC sells at the subsidized price and others sell at the often higher free market price. However, there is a genuine concern, as Malawi alternates between years of surplus and deficit production, that the private sector might not have sufficient recent experience and access to finance, handling and storage capacity to import so much maize. With interest rates above 50 percent, it is doubtful that the private sector can borrow enough to import the required volumes. Delays due to logistical constraints also have to be taken into account.

If commercial maize is too costly, it will not be accessible to the majority, the main problem experienced in 2001/02, as rural households attest. Without large-scale food aid, it is difficult to imagine how the country can provide for its needy population in a second year of cereal deficits. Over the next year, as Malawi recovers from its current food insecurity, food aid has the potential benefits of reducing the demand on commercial imports and the private sector and moderating potentially huge price increases.

3. VULNERABILITY UPDATE

FEWS NET and its partners plan to conduct a subnational (EPA-level) food security analysis once the final crop production estimates are released.

The country may face more serious food shortage problems this year than last year if appropriate steps to address the situation are not taken.

The joint WFP/FAO crop production and food assessment mission, in which FEWS NET participated, has just finished its exercise and is producing its report. The mission’s preliminary findings agree with previous FEWS NET assessments that the food security situation this marketing year (April 2002-March 2003) may be worse than last year (2001/02) unless appropriate actions are taken. The numbers of food insecure people will rise steadily through March next year, reaching as many as 3.2 million who will require emergency food assistance.

Together with its partners, especially the Ministry of Agriculture and Irrigation, FEWS NET will work out the final food balance sheet after the release of the final crop production estimates figures scheduled for June 20. In addition, FEWS NET will conduct its annual food security analysis to determine which Extension Planning Areas (EPAs) are at risk of food insecurity and the level of food insecurity. This analysis will supplement the other assessments that have been conducted recently, such as the WFP/FAO food assessment and the Save the Children (SC/UK) food assessment. Most importantly, FEWS NET in collaboration with its partners intends to intensify monitoring of the food security situation across the country with its partners and alert all stakeholders of any developments affecting food security and access at both national and household levels.

Discussions with some rural households indicate that children, the elderly, sick, disabled, and female-headed households are the most affected during times of food shortages, a problem exacerbated by the HIV/AIDS epidemic. These groups are often unable to engage in activities that would help them obtain food. Large family sizes and the increasing number of orphans, some of whom are too young to help obtain food for the family, simply compound the problem of poor food access

The big shortfall in cereal production in April-May will have grave consequences for rural household food security during the rest of the marketing year. A significant, but unknown, portion of this year’s reduced harvest will be consumed on farm; a much smaller portion will be sold for cash income. Some households have already overstretched their coping mechanisms, such as the sale of livestock. A lot of households were forced to sell their livestock to buy food over the past several months and now have little or no livestock to fall back on. Wages for casual labor (ganyu), perhaps the most important coping mechanism for a majority of the households in the country, decline during periods of food shortages due to excess ganyu labor supply - many willing workers but fewer employers able to pay. The likelihood of rising food prices later in the year heightens the vulnerability of households to food insecurity. The food security assessment by FEWS NET and partners will bring into focus these blurred prospects for food security in 2002/03.

The elements for a continuing food crisis in 2002/03 are well known, if not yet quantified. Household resilience has been weakened following recent food shortages. Now Malawi faces a second year of worsening food availability and accessibility. Only a well-planned sequence of actions, starting immediately with outside help, can alleviate the situation. Malawians need emergency food relief now and assurances that the country will import sufficient and affordable maize over the next 10 months.

4. PASTURE AND LIVESTOCK CONDITIONS

Livestock sales have now declined.

With the recent harvest, livestock sales have declined because households no longer need to sell or exchange their livestock to obtain food. Few households, however, remain with any livestock after distress sales in recent months. Livestock prices are now picking up, but there is concern that they are still lower than usual. Livestock traders are also aware that the current harvest was far below average and that some farming households will become desperate to build their household stocks. Traders use this as a bargaining chip to buy livestock at low prices in some areas.

5. MACRO-ECONOMIC INDICATORS

The value of the Malawi Kwacha remains stable at an average of about MK76/US$.

The value of the Malawi Kwacha remained relatively stable at about MK76/US$ between mid-April and mid-May 2002. The effects of the ongoing tobacco auctions have not yet been felt by the value of the local currency. Normally, the local currency appreciates during this period as the revenue from tobacco sales boosts foreign exchange reserves, lowering the exchange rate. However, this appreciation may be offset by the slow inflow of donor funds. Recent newspaper reports indicate that the IMF is still withholding some funds under the $55 million poverty reduction and growth facility program until Malawi meets certain conditions, including control of government expenditures. The exchange rate is an important indicator to watch, especially now, as it determines the Kwacha cost of imports, including food and fuel.

USAID Famine Early Warning System Network - a CHEMONICS managed project

FEWS NET Project
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E-mail: fewsmw@malawi.net