Most parts of the country experienced dry conditions and cold nightly temperatures, typical of the winter season in Malawi.
The Ministry of Agriculture, Irrigation and Food Security released its final round of crop production estimates for 2003 on June 23. Production has increased over last season for most crops. Maize production is currently estimated at 1,983,440 MT, up by 27 percent from last year's 1,556,975 MT.
This year's national food security prospects are more favorable than last year's, due to the increase in crop production and the government's large carryover stocks.
Government maize stocks were at 212,936 MT as of June 30, 2003. Of this total, 95,706 MT is for the SGR and 117,936 MT is for commercial use.
Government has advised ADMARC to reduce its maize price from MK17/kg to MK10/kg, in order to compete with local market prices, which have continued to drop in June and boost maize sales. Also, the government is allowing the National Food Reserve Agency to sell and export 100,000 MT of maize.
The emergency operation under which WFP and other NGOs were distributing free food to households affected by the food shortage last season came to an end in June 2003.
Most livestock have increased in number over last season, according to Ministry of Agriculture, Food Security and Irrigation figures released the same day as the crop production figures.
The drop in food prices has strengthened the downward trend in the inflation rate. The national inflation rate reached 9 percent by May 2003.
1. FACTORS AFFECTING CROP PRODUCTION
a. Agro-climatic Conditions
Most parts of the country are now experiencing dry conditions with cold temperatures, especially at night.
Intermittent rainfall showers are occurring in some parts, particularly the southern highlands and lakeshore areas. While the dry conditions have benefited the main season (summer) harvest, still occurring in some parts of the country, the showers have supported winter crop cultivation.
2. CROP PRODUCTION PROSPECTS
The Ministry of Agriculture, Irrigation and Food Security released the final round of crop estimates for 2003 on June 23. Maize production is estimated at 1,983,440 MT, representing a 27 percent increase over last year's production of 1,556,975 MT.
As reported in the March to April report, the crop production estimation exercise is conducted in three phases; an estimate is released at each phase, with the first occurring around January/February, the second in March/April and the final round in June/July. The first two rounds are preliminary while the third is final. During the first round, estimates are done based on the farmers' planting intentions as most of them will not yet have planted by the time the actual exercise is being done. The second round is based on the actual area planted, crop condition and other factors affecting crop production at that time. The final crop estimates are based on an actual weighing of the crop to determine the yields. The following paragraphs provide a brief review and discussion of the final figures for some of the major food crops.
Maize is the country's main staple food, grown and consumed everywhere in the country. Maize, therefore, is one of the main determinants of food security at the national level. The final figures for this year put maize production at 1,983,440 MT, up by 27 percent from last year's production of 1,556,975 MT. The increase is due to a 5 percent increase in overall yield, attributed to an increase in the uptake of fertilizer, and a 21 percent increase in area planted, attributed to an increase in seed availability. The government scaled up its free input distribution program from 1 million beneficiaries in the 2001/02 season to around 3 million beneficiaries in the 2002/03 season. In addition, the government intensified free input distribution to farmers for winter maize and other crops. The number of beneficiaries was scaled up from about 300,000 beneficiaries to 400,000 in the same period. Winter maize production is steadily increasing in response to the government's efforts to increase winter crop production as shown in Figure 1.
Of this year's estimated maize production, 82 percent comes from the smallholder summer crop, 11 percent from winter and 7 percent from the estate sector. While the estate sector's relative contribution to total maize production has not changed significantly over the past five years, the proportion of winter maize to total maize production has increased steadily over the past three years, as shown in Figure 2.
The estate sector mainly concentrates on growing commercial crops, especially tobacco, tea and sugar. Maize is a relatively minor crop in the estates and is produced mainly for consumption by estate workers. This is why the estate workers are also vulnerable to drops in maize production, as are smallholders.
The increase in maize production is good news for Malawi after the past two years of food security problems and subsequent reliance on food aid. However, given that last year was a bad production season, an increase in production over last year does not necessarily indicate that this is a particularly good year. Comparing with average or normal production provides a better reference point. Since production during the past five years has not been entirely normal, however, it is more appropriate to use the past 20 years, up through the present year. The abnormal years will be taken out of the equation; in other words, the time frame will be 1982/83 to 2002/03 agricultural seasons, leaving out 1991/92 and 1993/94, when maize production was unusually low (below 1,000,000 MT) and 1992/93, 1998/99 and 1999/00, when maize production was abnormally high (above 2,000,000 MT). Using this time frame and set of assumptions, average national production (including only smallholders) for Malawi is 1,425,236 MT.
This national average does not include winter maize or estate farm estimates. Winter maize production estimates only became part of the national calculation from 1998/99 on. Winter maize production figures have shown a steady increase since with a big jump this season. The average winter maize production excluding this year is 92,585 MT. If we also consider estate maize production, the figure changes again. Although estate maize production estimates were provided as early as 1997/98, the forecasts in the first two to three years were just based on models; since then, the estate production estimate has been based on the same kind of surveys that determine smallholder production estimates. These have shown that estate maize production is just above 100,000 MT from above 200,000 MT prior to that. The average for the past three years, including this year, is 125,863 MT. Adding all these together gives a national average or 'normal production' of 1,643,685 MT. This year's maize production, therefore, is 21 percent above this normal maize production figure.
This year's rice production is down from 92,097 MT last year to 88,184 MT this year, a drop of around 4 percent. Most of this crop is grown by smallholder farmers during the main rain season. Generally Malawi does not produce enough rice to meet its domestic requirements and relies on imports to the meet the gap, especially in the urban centers. Unlike maize, however, rice growing is mainly concentrated in Karonga ADD in the north, Salima ADD in the center and Machinga ADD in the south. In addition, most of it is consumed in the urban centers, where it is sold in the retail outlets. Ironically, some of the rice grown in Karonga, which borders Tanzania, is exported through informal trade to Tanzanians, who come during harvest time to buy rice using cash or barter. However, this year rice production in Karonga ADD dropped by close to 50 percent, from about 16,000 MT last year to 8,000 MT this year. This is mainly attributed to a prolonged dry spell in the area which resulted in a 45 percent decrease in area planted and a 10 percent drop in yield. This will likely affect the food security situation in the area as rice is one of local households' staple foods, along with maize, cassava and plantains. Karonga is one of the very few areas in the country where food production and consumption is diversified.
Cassava production is around 1,735,065 MT (fresh weight) this year, up 13 percent from 1,540,183 MT last year. As with rice, cassava production is localized especially in areas along the northern lakeshore (Karonga and Nkhatabay districts), Nkhotakota and Lilongwe districts in the central region and Zomba and Mulanje districts in the southern region. Of late though, farmers have increasingly taken on cassava as both a food and a cash crop. However there are a few areas that regard cassava as a staple food crop; in most parts of the country it is regarded as a snack. Experience has also shown that movement of cassava from surplus to deficit areas is limited compared to maize, which partly explains why some areas can still suffer from local food shortages despite high national cassava production figures.
Implications on Food Security
FEWS NET, in conjunction with the Ministry of Agriculture, Irrigation and Food Security, will prepare a food balance sheet based on the final production figures as soon as possible to determine whether the country has a food surplus or deficit. However, the increase in production combined with large maize carryover stocks by government suggests that the country most likely has a surplus this year.
3. FOOD AVAILABILITY AND ACCESS
a. Official Maize Stocks and Sales
Government maize stocks reached 212,936 MT by June 30, 2003, of which 95,706 MT is for the SGR and the balance, 117,936 MT, is for commercial purposes.
The government has given the green light for the National Food Reserve Agency to export up to 100,000 MT of maize.
The government maize stock position at the end of June 2003 remained high at 212,936 MT. Of this total, 95,706 MT (including 22,000 MT pledged by the EU) is for the SGR and the remaining 117,936 MT is for commercial purposes.
The government has been selling this maize mainly through ADMARC, but the sales rate has been very low due to several factors including: the improved household food security situation as a result of the free food distribution that was going on across the country; increased winter maize production: the availability of maize in local markets at cheaper prices than ADMARC sells, etc. ADMARC maize sales amounted to 41,434 MT by June 20, 2003. This is 44 percent lower than the 62,589 MT sold by the same time last year, despite the fact that most of the ADMARC markets did not have adequate maize stocks last year. Government funds are locked in maize stocks, and these low sales put pressure on the government budget; as the quality of the maize deteriorates over time, the government stands to lose even more. In order to increase sales, the government has advised ADMARC to reduce the maize selling price from MK17/kg to MK10/kg; the government also recently told the National Food Reserve Agency that it can sell and/or export up to 100,000 MT of maize. By reducing the price, the government will be losing about 2 billion Malawi Kwacha, according to some experts. However, others feel that the government could lose even more if the maize ends up rotting.
b. Local Market Conditions and Prices
Maize prices continued to fall in most local markets as harvesting of maize reached the peak. Average local market maize prices in June 2003 ranged from as low as MK6.45/kg to MK15.58/kg compared to a range of MK11.65/kg to MK25.03/kg at the same time last season.
ADMARC has been forced to reduce its maize price to MK10/kg from MK17/kg in order to boost sales that have remained low this season.
The maize harvest is complete in most parts of the country, resulting in increased supply and reduced demand for maize in both ADMARC and local markets. Local market maize prices, therefore, continued to drop in June, as shown in Figure 3.
Maize prices in local markets ranged between MK6.45/kg at Dowa market in Dowa District, to MK15.58/kg at Dwangwa market in Nkhotakota District, both in the central region. These prices are about 50 percent lower than those at the same time last season, indicating an improvement in the food security situation this year. The drop in the local market prices has made it even more difficult for ADMARC to sell its maize at its established price of MK17/kg. As such, as mentioned above, ADMARC, under instructions from the government, has lowered its maize price from MK17/kg to MK10/kg in order to compete with the local markets and boost sales. Figure 4 shows that ADMARC, by bringing down its price to MK10/kg, will be more in line with prices in most of the local markets.
4. VULNERABILITY UPDATE AND INTERVENTIONS
Free food distribution came to an end in June 2003.
WFP and the NGO free food distribution ended in June. The household food security situation has improved with the current harvest, and most households now have food from their own production. However, there are a few pockets where production has not done well that require close monitoring. Following two consecutive bad years, it is expected that some households will not have recovered fully and might still experience problems in accessing food later in the year once their own stocks are depleted.
5. PASTURE AND LIVESTOCK
The Ministry of Agriculture and Irrigation released its livestock estimates on June 23. The figures show that, nationally, there are 781,747 cattle, 1,716,822 goats, 104,450 sheep, 435,257 pigs, 8,871,625 chickens, 168,140 rabbits, 254,537 guinea fowls and 8,596 turkeys.
Livestock plays an important role as a source of food, but more importantly, as a source of cash for most of households in rural areas. Selling livestock to buy food is one of a household's main response options during the hunger season. The Ministry of Agriculture, Food Security and Irrigation released this year's livestock estimates together with the crop production figures. The figures show that households are rebuilding their stocks, having sold a lot of them during the hunger period of 2001/02.
The figures show that at the time of the census there were 781,747 cattle, 4 percent up from last season's figure of 753,075. This is attributed to intensified extension campaigns against the slaughter of young and breed-able stock and improved disease control programs.
Meanwhile, foot and mouth vaccinations in the lower Shire Valley are under way and the ban against movement of meat and animals from the area is still in place to keep the disease from spreading to other regions. The lower Shire is the major supplier of cattle and beef to urban areas in the southern region and the ban has been most felt in that area. According to the Ministry, the estimated cattle population could potentially produce 22,807 MT of beef, 19,278,000 liters of milk and 210,657 hides. Of late there has been an increase in the importation of meat and meat products, indicating that the current production is insufficient to meet domestic demand.
Goats are perhaps the most important source of income from livestock for a majority of middle income rural households. The Ministry estimates a 3 percent increase in the number of goats from 1,659,966 to 1,716,822 from last year to this with a potential meat production of 465 MT and 45,295 skins.
Sheep, unlike goats and cattle, have decreased by 5 percent from 109,438 last year to 104,450 this year. This is attributed to high off-take compared to adoption rate. There is almost no change in the number of pigs, estimated at 435,257.
Chickens are the most important source of livestock-related income for a majority of the poor households in rural areas. The government and other stakeholders have intensified their efforts to promote poultry farming, including chickens and guinea fowls. Guinea fowl rearing is relatively new, but farmers are adopting it very fast. The number of chickens is up by 21 percent, from 7,348,450 last season to 8,871,625 this season, with a potential egg production of 2,629 MT. The number of guinea fowls has more than doubled (177 percent) in the same period to 254,537. Rabbits and turkey are also some of the animals that are being promoted, currently estimated at 168,140 and 8,596 respectively.
6. MACRO-ECONOMIC ENVIRONMENT
The national inflation rate continues to drop and by May 20003, the rate of inflation was at 9 percent.
The national inflation rate continued to drop in May. At 9 percent, it was at its lowest level since 1998. This downward trend has been strengthened by the drop in food prices. The food index declined by 6.2 percent in May compared to a 1.5 percent drop at the same time last season. The declining rate has been further supported by the stable exchange rate (Malawi Kwacha against the USD). The inflation rates in both urban and rural areas show similar trends, as illustrated in Figure 5.