Malawi

FEWS Malawi Food Security Report mid-July to mid-Aug 2003 - Increased concern over depreciation of Kwacha

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Situation Report
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EXECUTIVE SUMMARY

Dry conditions persist throughout Malawi.

The Targeted Input Programme reduced its assistance from around 3.2 million households to 1.7 million this season.

Land preparation and procurement of inputs in readiness for the coming main growing season is in progress.

The government is about to begin exporting 100,000 MT of maize from its carryover stock.

ADMARC maize sales and maize prices in the local markets remain low. Prices ranged from about MK8.00/kg to MK14.00/kg.

The rapid depreciation of the local currency is increasing fears that commodity prices, including food, may increase. The local currency was trading at an average of about MK105/US$ by the third week of August 2003, down from MK89/US$ in mid-July.

1. FACTORS AFFECTING CROP PRODUCTION

a. Agro-climatic Conditions

Most parts of the country continued to experience dry conditions.

As reported last month, the country continues to experience dry conditions broken up with intermittent showers in some parts of the country, particularly the southern highlands and lakeshore areas. These showers are normally a result of moist southeasterly winds blowing over Malawi from the Indian Ocean coast of Mozambique. The cold temperatures that characterized the past three months are now coming to an end. Normally the temperatures warm up just before the start of the main rainfall season in October.

b. Inputs Availability

Inputs are readily available but purchasing power remains the biggest limiting factor for a majority of the households.

The Targeted Input Programme is meant to benefit 1.7 million households this season, less than last season.

Increased agricultural production in Malawi depends on smallholder use of fertilizer and improved seed. However the majority of poor households can not afford to buy sufficient inputs. The farmers that have cash are now buying these inputs for use in the coming agricultural season. In recent years, the majority of the poor households have had access to these inputs through government and NGO-sponsored intervention programs. Most notable of these is the Targeted Input Programme (TIP). Under this program, smallholders received a pack containing enough fertilizers, improved maize seed and seed for one of the legumes (beans, groundnuts or soya beans) to plant 0.1 hectares.

The program, known as the Starter Pack Program, began in the 1998/99 season, targeting all smallholder farmers (2.8 million households). In part because of the program, and in part because of favorable weather, the country registered record crop production that year, with over 2.0 million MT of maize produced. Since the program was costly and mainly dependent on donor funding, the number of beneficiaries was cut to about 1.5 million in the following season (2000/01), and further reduced in the 2001/02 season to about 1.0 million beneficiaries. This reduction was followed by, although not entirely responsible for, the country's worst food shortage problems in recent history and forced the government to lobby for an increase in the number of beneficiaries in the 2002/03 season. The new program, known now as the Expanded Targeted Input Programme, targeted around 3.2 million households, and was followed by an improvement in crop production. There is no doubt, therefore, that input support contributes to increased agricultural production.

Due to limited resources, however, the government will again reduce the number of beneficiaries this season to 1.7 million. Plans for distribution are already well advanced to ensure that farmers can derive maximum benefit from the timely application of the inputs. The program in its current form is difficult to sustain and the government and other stakeholders should work hard to find long term solutions to the input access problem. Solving this problem will require addressing the complex issues of rural income enhancement, interest rates, and subsidies among others.

Inputs are currently available; however, as the peak period of input purchases (September/October) is still around a month away, it may be too early to predict whether overall supplies will be sufficient to meet the demand. Last season the country experienced shortages of maize seed forcing some of the farmers to plant less preferred varieties.

2. AGRICULTURAL ACTIVITIES

Land preparation for planting of the main (summer) season begins in most parts of the country.

Planting of the first winter crop continues.

Farmers are now beginning to prepare their fields for the main agricultural season (October to March). The main activities include clearing, ridging and manure application to allow for planting as soon as the planting rains start. Planting rains normally start around the end of October or early-November. Because prices are currently so high for inorganic fertilizers, the government has been encouraging farmers to use compost manure. Last year the government embarked on an intensive campaign, training farmers how to make and apply compost manure. Anecdotal information indicates that the results are encouraging, with many farmers adopting the approach, resulting in improvement in crop yields.


Figure 1. Winter Maize Production in Malawi by Region: 1998/99 - 2002/03

FEWS NET/Malawi
Source: MoAIFS


With respect to dimba (winter) crops, maize planting continue. As reported last month, cultivation of winter crops varies from one area to another, depending on residual moisture levels and farmers' traditions. In some places residual moisture allows for two to three plantings, whereas in other areas farmers have not traditionally planted at all. However, due to deliberate government efforts to increase winter crop production as one way of improving the national food security situation, a lot of farmers are now growing winter crops, resulting in a steady increase in winter crop production over the past three years as illustrated in Figure 1. The figure shows that the central region has overtaken the southern region to become the major producer of winter maize. Other crops grown in the winter include rice, beans, sweet potatoes, Irish potatoes and vegetables.

3. MAIZE AVAILABILITY AND ACCESS

a. Maize Availability

The government continues to hold large stocks of maize as ADMARC sales remain low. Maize readily available in local markets.

Government ready to export 100,000 MT of maize.

Maize continues to be readily available in both local and ADMARC markets. This is mainly attributed to the improved maize production this year and huge carryover stocks from government-imported maize last season. As previously reported, the government imported a lot of maize last season to address the country's food shortage problem. At the same time food aid from various donors was distributed free to food insecure households in the country. As a result, the government maize did not sell as expected, resulting in over 250,000 MT of carryover stocks.

Improved maize production this season, coupled with the reluctance by some households to sell their maize, has meant that government maize is still not selling very quickly on the markets. ADMARC, the government's maize marketing agent, recorded 41,534 MT of maize sales by 25th July 2003, representing only around 65% of last year's sales of 63,594 MT at the same time. As expected, most of these sales were in the southern region, where the average land holding size is lowest and where many households can not produce enough of their own maize to last them the whole year. Figure 2 shows the distribution of ADMARC maize sales by region as of 25th July.


Figure 2: Distribution of ADMARC maize sales by region

FEWSNet/Malawi
Source: ADMARC


As reported in previous months, the government is planning to export 100,000 MT of maize as one way of disposing of its large maize stocks. The government opened an international tender for sale of the maize and the successful bidders have been identified. Maize should start flowing out of the country very soon. However, the government has indicated that it will reserve 100,000 MT for the Strategic Grain Reserve to hedge against possible maize shortages on the domestic market as the season progresses. This is important because market conditions can suddenly change as was the case in December 2001.

As reported last month, cross-border trade may increase in the coming months, and there are already indications that maize from Malawi is reaching Kenya through Tanzania. According to the Food Trade Bulletin for East Africa, 12 August 2003, central and southeastern Kenya and northwestern and coastal parts of Tanzania are experiencing maize shortages and provide a ready market for Malawian maize. It is reported that in some parts of Kenya, a 90kg bag is selling at Kshs 1460 (about MK2,044 or MK22.71/kg). This is almost double the prevailing price in most local markets in Malawi. Zimbabwe is another potential market for Malawian maize.

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