Malawi

FEWS Malawi Food Security Report mid-Aug to mid-Sep 2003

Format
Situation Report
Source
Posted
Originally published


EXECUTIVE SUMMARY

Seasonably dry and warm conditions persist over Malawi in the period before the main season rains begin in mid-October.

The Southern Africa Regional forecast for the first half of the October- March rainy season shows that northern Malawi is likely to receive normal to below-normal rainfall while the rest of the country can expect normal to above-normal rainfall. The Malawi Meteorological Department will release this year’s seasonal forecast soon.

A survey by the International Center for Soil Fertility Development (IFDC) shows that fertilizer prices have gone up sharply, mainly due to the depreciation of the Malawi Kwacha against the U.S. dollar. Without outside help, the cost of fertilizer is beyond the reach of most smallholder maize farmers.

The winter crop harvest is helping to improve household food security but conditions are not as bright in the Lower Shire Valley where water logging may reduce maize production by half and where the ban on livestock movement reduces options for earning income.

Out of the 100,000 planned maize exports by the National Food Reserve Agency (NFRA) during 2003-04, about 4,000 MT had been exported by the second week of September.

Maize sales by the Agricultural Development and Marketing Corporation (ADMARC) remain low due to ample private sector supplies. Maize prices in the local markets are also low, ranging from about MK8/kg to MK13/kg.

1. FACTORS AFFECTING CROP PRODUCTION

a. Agro-climatic Conditions

The Southern Africa Regional Climate Outlook Forum issues mixed rainfall prediction for Malawi.

Malawi continues to experience dry and warm conditions, typical of the weather pattern just before the start of the main rainy season in October. Temperatures usually increase two to three months before the start of the rains, accompanied by widespread light to heavy rains towards the end of September that last for a very short period, normally one to two weeks. These pre-season rains, locally known as Chizimalupsa, normally encourage farmers to finish their land preparations as the main season rains are imminent. Farming households expect these rains any time now.

Meanwhile, the SADC level seasonal rainfall forecast was developed at the Southern Africa Regional Outlook Forum (SARCOF) held in Zambia from 3rd to 4th September 2003. According to this forecast, the south-western and eastern parts of the region, including the northern parts of Malawi, are likely to receive normal to below-normal rainfall in the first half of the rainfall season (October to December 2003) while the rest of the region will receive normal to above-normal rainfall. In the second half of the season (January to March 2004), the forecast predicts normal conditions over much of the southern Africa region. Along with as the DRC, most of Angola, northern Mozambique, Zambia, and much of Tanzania, Malawi is expected to experience normal to above-normal rainfall. SARCOF climatologists caution that these forecasts are valid over large areas and seasonal time scales and that local variations may often occur. Users are advised to consult national meteorological services for more detailed and up to date forecasts.

The Malawi Meteorological Department will soon release this year’s rainy season forecast for October 2003 to March 2004, based on the SARCOF forecast and other factors that affect rainfall in Malawi. This national forecast will allow farmers and other stakeholders to plan their agricultural activities better. Once the Malawispecific forecast is known, it will be possible to assess the implications of the forecast on crop production in the coming agricultural season.

b. Agricultural Inputs Availability

Fertilizer prices go up due to the depreciation of the Malawi Kwacha against the United States Dollar.

Inputs are readily available in the various outlets for farmers who have the cash to pay for them. However, lack of purchasing power is the major factor limiting farmer access to these inputs. The recent depreciation of the Malawi Kwacha against the U.S. dollar, especially in the past two months, has already increased fertilizer prices, all of which is imported. This makes access to fertilizer more difficult than before.


Table1: Average Retail Fertilizer Price Ranges (MK/50kg bag)
Fertilizer Type
Mzimba
Kasungu
Mid-June
Mid-August
percent Increase
Mid-June
Mid-August
percent Increase
Urea
1,465-1,660
1,940-1,950
24
1,530-1,544
1,826-1,880
20
23:21:0+4s
1,660-1,760
2,000-2,010
17
1,525-1,540
1,925-2,100
31
CAN
1,350-1,365
1,690-1,700
25
1,255-1,480
1,600-1,820
25
D Compound
1,695-1,695
2,065-2,070
21
1,570-1,784
1,940-2,100
20
Percent increase calculated from the midpoint of each range.
Source: IFDC/Malawi

Table 1, comparing fertilizer prices between mid-June and mid-August this year in Mzimba and Kasungu Districts (the only ones for which prices were available, shows that urea increased about 20-24 percent during this period and basal dressing by about 17-31 percent.

Indeed, the majority of the smallholder farmers cannot afford to buy fertilizer at all and must rely on the fertilizer issued by government and non-governmental organizations when available. Table 2 shows that the recommended application of basal dressing (23:21:0+4s) and urea is not financially attractive, given rising fertilizer prices and prevailing low maize prices.

A maize farmer has to sell more maize this year than she did last year to buy the same amount of fertilizer. For instance, the Guide to Agricultural Production by the Ministry of Agriculture, Irrigation and Food Security (MoAIFS) recommends 100 kgs of basal dressing fertilizer (23:21:0+4s) and 150 kgs of top dressing fertilizer (Urea) per one hectare of maize.

Based on last year’s average price of MK1,500 per 50kg bag of basal dressing fertilizer and MK1,300 per 50kg bag of Urea, the total fertilizer cost per hectare reaches MK6,900. Dividing by last year’s ADMARC maize price of MK17/kg, the farmer would have to sell about 8 50 kg bags of maize to buy the recommended application of fertilizer per hectare of maize. This is equivalent to 27 percent of her harvest, assuming an average yield of 1,500 kgs (or 30 50-kg bags) per hectare for hybrid maize.

This year’s rising fertilizer prices (about MK2,000 per bag of basal dressing and MK1,900 per bag of urea, Table 1) raises the fertilizer cost per hectare from the MK6,900 to MK9,700. Dividing this fertilizer cost by the currently lower ADMARC maize price of MK10/kg, the farmer will have to sell more than 19 bags (50 kg each) to buy enough fertilizer per hectare of maize for next year, about 66 percent of the current harvest - nearly two-thirds, leaving little for consumption or other expenses. Unless these relative prices are reversed, small holders in Malawi will buy less and less fertilizer or grow less and less hybrid maize.


Table 2: Financial Disincentive of Applying Fertilizer on Maize
Price (MK)
2002-03
mid-August
2003-04
1.
Price per 50 kg bag (MK) Urea
1,300
1,900
2.
Basal Dressing
1,500
2,000
3.
Cost of recommended application per hectare (1. @ 3 bags) and (2.@ 2 bags) 3 bags Urea
3,900
5,700
4.
2 bags Basal Dressing
3,000
4,000
5.
Sum (3. + 4.)
6,900
9,700
6.
ADMARC price per kg of maize (MK)
17
10
7.
Kg of maize to pay for fertilizer (5. ÷ 6.)
405.9
970
8
Average hybrid maize yield (kg per ha)
1,500
1,500
9.
Percent of average maize production to pay for fertilizers (8. ÷7.)
27
66
10.
Balance of maize production per hectare after fertilizer purchase (kg) (8. - 7.)
1,094.1
530.0
Source: IFDC, Malawi


Working with the lower yields for local maize (<1,000 kg/ha), the financial returns become even less attractive. Applying fertilizer would require more than 90 percent of the harvest equivalent to buy enough fertilizer per hectare.

2. AGRICULTURAL ACTIVITIES

Land preparation for planting of the main summer production season intensifies as the rainy season draws near.

Harvesting of the first mature winter crop continues while planting a second crop gets underway.

Most farmers are now preoccupied with land preparation -- garden clearing, ridging and manure spreading -- in readiness for planting as soon as the rains startaround mid October to March.

The winter maize crop is at varying stages of growth and development, but most of the first crop has now matured and is being harvested. Most of the winter maize is harvested while still green, mostly for sale as a source of income for buying dry maize grain and other goods on the market. In a few cases, farmers wait for the maize to dry and then harvest.

Even as some farmers are harvesting the first winter crop, other farmers are planting their second winter crop. Most of this crop will be harvested in December/January. Availability of this maize helps farmers at the critical period when the majority of farming households has run out of their own-produced maize. While winter maize cultivation used to be largely limited to the Lower Shire Valley, a growing number of households have access to winter cultivation in wetlands or areas with residual moisture (dimbas) after the rains. Households with access to irrigation facilities also grow winter maize. Given these expanded possibilities, the government has intensified its efforts to ensure that farmers have treadle pumps for irrigation as one way of improving crop production, incomes and food security.

3. MAIZE AVAILABILITY AND ACCESS

a. Maize Availability

Maize is readily available in both ADMARC and local markets, but demand for maize remains low.

Through the National Food Reserve Agency the Government exports 4,000 MT of maize by 22nd August since April.

The Agricultural Development and Marketing Corporation (ADMARC) has not bought maize from farmers so far this 2003-04 (April-March) season, as it has often in the past. Instead, ADMARC buy its maize from the government’s National Food Reserve Agency (NFRA). The recent field trip conducted by FEWS Net showed that maize was readily available in all ADMARC markets, where retail prices are fixed at MK 10/kg. In the few cases where one market runs short of maize, ADMARC is able to shift maize stocks from other nearby ADMARC markets within the district to cater for the shortfall.

Although maize is readily available in local markets where prices are flexible, there are fewer traders this year than at the same time last season because the drop in maize prices this year has rendered the maize business unattractive. Demand is also not high at the moment, but traders are optimistic that demand will rise from October as more and more households run out of their homegrown food and turn to the market for supplies.

ADMARC maize sales remain low compared with sales the same time last year, largely due to the 27 percent increase in maize production in 2002/03 over 2001/02 and ample supplies on local markets. As at 22nd August 2003, ADMARC maize sales since April amounted to 48,214 MT, about 31 percent less than the amount (70,274 MT) sold during the same period last year. Most of the sales this year were made in the Southern Region (28,659 MT, or 59 percent), where the population density is greatest, farm sizes smallest and market demand highest. The Central Region accounted for 35 percent (16,659 MT) of total sales and the Northern Region 6 percent (2,962 MT). The biggest drops in absolute and percentage terms occurred in the Southern and Northern Regions, as shown in Figure 1.



The public sector continues to hold large maize supplies but is actively seeking to reduce them. Recall that the government imported 235,000 MT for sale through ADMARC in 2002-03. When adding 16,000 MT carryover stocks, official marketable maize stocks amount to 251,000 MT. ADMARC’s lower maize sales this year have prompted the government to look for alternative ways to dispose of the remaining maize.

ADMARC is supposed to buy the maize from the NFRA whenever their markets need more maize. However, because of ADMARC’s low sales, the NFRA had only sold 58,500 MT to ADMARC by 22nd August. The NFRA opened a tender to the general public for sale of the commercial maize (50,000 MT) in February 2003 but only 3,658 MT were sold by 22nd August. The NFRA then opened a tender for export of some of the maize (100,000 MT) and as of mid September, about 4,000 MT had been sold and exported. Using USAID funds for balance of payments support, the government, bought 44,706 MT of maize from the NFRA to replenish the Strategic Grain Reserve (SGR). The amount of the NFRA commercial maize remaining as at 22nd August, therefore, stood at 143,136 MT.

The volume of maize in the SGR nearly reaches its target level of 100,000 MT as a hedge against any unforeseen food shortages. As of 22nd August, the SGR amounted to 95,706 MT, comprising 11,000 MT NFRA carryover stocks, a 40,000 MT contribution from the European Union (including a 22,000 MT pledge) and the 44,706 MT bought using USAID funds.

b. Maize Prices

Local market maize prices remained stable around MK10/kg as of the end of August 2003.

Maize prices in the local markets remained stable at around the ADMARC fixed price of MK10/kg, as depicted in Figure 2.



Local market prices ranged from MK8.37/kg at Liwonde market in Machinga District and MK12.61/kg at Namwera market in Mangochi District, both in the Southern Regions. As found out from the recent field trip by FEWS Net, adequate supplies of maize at the prevailing price is the key factor holding local market prices stable.

Prices may therefore not rise to last year’s levels when some markets recorded prices above MK40/kg.

4. FOOD SECURITY: FOCUS ON THE LOWER SHIRE VALLEY

Failure of winter maize crops and the continued ban on livestock movement threaten food security in the Shire Valley.

The national food security situation is generally favorable at the moment. In some areas the situation has improved with the current winter maize harvest. However, the situation requires close monitoring in the critical months ahead.




The food security outlook is not as bright for Chikwawa and Nsanje districts in the Lower Shire Valley due to water logging in areas where winter crops are grown. Winter crops contribute significantly to food security in the Lower Shire Valley in terms of food availability as well as access, making the failure of the winter crops this season cause for concern.

Figure 3 shows the percentage contribution of winter and summer maize in Nsanje and Chikwawa districts. In Nsanje District, the winter maize sometimes accounts for over 50 percent of total maize production, as was the case in 2000-01 and 2001-02, the highest among all districts in the country. In general, winter maize accounts for over 40 percent of total maize produced in the Lower Shire Valley while in Chikwawa District, it accounts for 20-30 percent. During a recent FEWS Net field trip to the Valley, the District Agricultural Development Office in Nsanje indicated that the current winter maize production forecast was an overestimate, in view of the current water logging, and should probably be reduced by half. Similar sentiments were expressed in Chikwawa District.

The ban on livestock movement from the Lower Shire Valley, imposed by MoAIFS about five months ago after an outbreak of foot and mouth disease, remains in place. This ban limits marketing options for livestock, one of the major sources of income in the area. Nsanje and Chikwawa districts are among the few districts in the country with a high population of cattle and goats. Most of these are sold to livestock traders from the neighboring city of Blantyre. The ban on livestock movement therefore has jeopardized the ability of households to generate income, some of which is used to buy food.

For both reasons - expected lower winter maize production and loss of household income from livestock sales - FEWS NET intends to closely watch the key food security indicators in the Lower Shire Valley, with the help from local partners.

FEWS NET Project
Off Chilambula Road, Old Town, P.O. Box 30455, Lilongwe 3. Malawi.
Telephone and Fax: +265 754892
E-mail: fewsmw@malawi.net