Malawi

The impact of food aid on food markets and food security in Malawi

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EQUINET discussion paper No. 45

Executive summary

In 2006 the Regional Network for Equity in Health in east and southern Africa (EQUINET) and the Health Systems Research Unit of Medical Research Council (MRC), South Africa commissioned a series of country case studies on existing food security and nutrition programmes in the region that demonstrate good practice in health systems promotion of food sovereignty and equity. This report outlines one of the case studies.

Malawi's greatest developmental challenges over the past 10 years have been its high levels of poverty, recurring food insecurity and widespread malnutrition. All three of these social phenomena are linked because poorer households cannot buy sufficient food for their needs, cannot get a suitable income from their own agricultural production, and suffer from malnutrition as a result. In response to the crisis, levels of global food aid to Malawi have increased and food aid has become a key way to address food insecurity and malnutrition in the country.

Food aid takes one of several forms: programme food aid, non-project food aid, project food aid and relief food aid. Historically, relief food aid has made up the largest proportion of food aid. Food aid has been mostly imported, with small amounts being procured from domestic markets. In this minor way, it has affected how domestic food markets operate, depending on the type of food aid and the mode of delivery. This paper explores the effect of food aid on Malawi's food security and its domestic market. Our main concern is to highlight the fact that food aid interventions also impact on domestic food markets. In other words, future interventions must be designed and implemented in a way that takes domestic market operations into account.

According to various studies, the impact of food aid and food imports on domestic markets (in terms of market prices and private sector participation) varies from year to year, depending on the size of the food gap, the involvement of the government and the timing of imports and food aid. In some years, the level of private sector participation in supplying domestic food demands through importation increased, while in other years, direct government importation and large inflows of food aid limited private sector involvement and distorted market prices.

Some studies found evidence of market distortions arising from increasing food aid. For example, freely available humanitarian food aid has been found to reduce the demand for commercial maize, resulting in unintended excess stocks of commercial maize in government outlets (Agricultural Development and Marketing Corporation and Strategic Grain Reserves). This dampened consumer prices for the year and also lowered producer prices for the next maize harvest.

The increasing importance of food aid in promoting food security in Malawi means that the government needs to take a more cautious approach: it should ensure that food aid brings the needed benefits, without compromising the domestic food market at the same time. This paper offers recommendations for future policies and programmes, which are summarised below:

  • The need for a food aid policy: Although a lot of food aid has been received over the years for relief and development activities, Malawi has no explicit policy for food aid, except for some key national policy frameworks. There is need for this food aid policy, which should take into consideration the significant role of food aid and the need to have a functioning domestic market.

  • Moving towards social protection: The chronic nature of food insecurity calls for more than just relief food aid. Malawi needs a social protection programme that can respond to both transitory and chronic food insecurity, especially for the most vulnerable population groups. This social protection programme needs to be an integral part of Malawi's development strategies and poverty reduction programme. It could help with the implementation of alternatives to food aid such as cash-based transfers and input programmes.

  • Moving towards social protection: The chronic nature of food insecurity calls for more than just relief food aid. Malawi needs a social protection programme that can respond to both transitory and chronic food insecurity, especially for the most vulnerable population groups. This social protection programme needs to be an integral part of Malawi's development strategies and poverty reduction programme. It could help with the implementation of alternatives to food aid such as cash-based transfers and input programmes.

  • Using food aid to improve household food security: Food aid in Malawi has been used to respond to food crises that have affected the country in recent years, such as those in 2002/2003 and 2005/2006. Food aid in these particular instances was used to meet the affected people's food security requirements. Food aid has also been used to address the needs of food insecure households, even in years of no national deficit. While the government and donors may manage to identify which food must be distributed to whom, they still need to use aid sustainably and efficiently in order to improve household food security and reduce market distortions. Information about who is most affected, where they are located, their numbers and the extent of the disaster or food crisis is crucial in the targeting process. For food aid to be provided only to those most in need, there is need for proper targeting using appropriate national and international standards and practices. The Malawi Vulnerability Assessment Committee (MVAC) has proven to be most useful in providing analytical information that can be used to identify vulnerable populations that need to be targeted. The MVAC should be strengthened so that its activities are implemented on time in order to ensure synchrony with the national planning or budgeting process so that appropriate food security interventions are systematically planned.