Malawi's new president Joyce Banda sees the value of continuing the Farm Input Subsidy Programme begun under Mutharika, but now is the time to make much-needed improvements.
The sudden death of President Bingu wa Mutharika on 5 April brought about an unexpected change of government in Malawi. Joyce Banda, who was Mutharika's estranged vice president, is now the new head of state and her People's Party has replaced Mutharika's Democratic Progressive Party as the governing party.
One of the key questions being asked is whether the change in government will also bring a change to the major policies of the previous administration. President Mutharika died at a time when Malawi's economy was tottering on the brink of collapse. Some donors had suspended aid as a result of the government's failure to secure a programme with the International Monetary Fund (IMF), and there were serious concerns about the governance situation in the country.
Frankly speaking, Malawi was headed for a complete economic meltdown. Already, parallels were being drawn with Zimbabwe's experience.
There is now a renewed sense of hope for a swift turnaround in Malawi's economic fortunes following the change of government. The resumption of aid, which constitutes about 40% of the budget, is expected to ease Malawi's economic circumstances, which were further worsened by the implementation of a zero-deficit budget.
What is the future of the Farm Input Subsidy Programme (FISP)? This was President Mutharika's flagship programme, which put Malawi on the forefront of international development debates and provided subsidies for seeds and fertiliser. Through the FISP, which was implemented against fierce donor resistance, Malawi was able to break free from a vicious cycle of hunger and food insecurity.
Since the 2005/2006 growing season, Malawi has been able to produce a maize surplus above annual food requirements, estimated at 2.8m tn. For this season, the FISP was touted as a model for other countries across the African continent to emulate for the effective implementation of smart subsidies and to kick-start agricultural production in line with the Comprehensive Africa Agricultural Development Programme.
Malawi will continue to implement the FISP, and President Banda has already expressed her commitment to continuing with the subsidy programme. This is not surprising, for two main reasons. Malawi's agricultural production cannot maintain this level of production without some form of subsidy to smallholder farmers, since most of them are too poor to afford improved inputs. Subsidies have become more or less an integral part of the social contract between the government and citizens. A government that discontinues the FISP risks voter backlash. In other words, maize subsidies are at the core of Malawi's politics.
There have been winners and losers in the implementation of the food security programme. Beneficiary farmers have gained in terms of improved yields due to access to fertiliser and improved seed. There is a huge price differential between subsidised and unsubsidised fertiliser. Many farmers, however, feel excluded and believe the subsidy programme has either been captured by local elites or exploited as a source of political patronage. Other major beneficiaries are the agro-dealers and contract seed growers. They are mostly male and are the fairly rich members of the farming community.
However, the change of government provides an opportunity to improve on the design, implementation and management of the FISP. While willing to continue supporting the FISP, most development partners had several issues that they wanted addressed through the development of a medium-term plan. It was not possible for technocrats to address concerns by development partners, however constructive, because of Mutharika's heavy and direct involvement in the programme. It was more or less a personalised presidential programme, kept that way by the numerous awards that were conferred on the president in recognition of the FISP's achievements. No major changes could be made without his endorsement. He condemned the medium-term plan as a strategic ploy for development partners to force the government into an exit strategy for the FISP.
Development partners were concerned with statistical disparities in the size of farming families produced by the ministry of agriculture and the national statistics office. They also talked about the printing of too many vouchers, the lack of transparency in the cost of the FISP, especially in relation to overheads, and excessive interference in the award of FISP contracts. They worried that the FISP had become more or less a means for settling political debts, since preference in the award of the contracts was given to those with very close ties to the government, whether their bids were competitive or not.
The implementation of the FISP will continue, but perhaps the technocrats will now have space to address outstanding concerns to enhance the programme's efficiency and effectiveness. Most development partners have expressed commitment to continued support of the FISP as long as the question of a medium-term plan is addressed●
Blessings Chinsinga is Associate professor, department of political and administrative studies at Chancellor College, University of Malawi
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