Food security is important for any country as hunger and malnutrition are enemies of development of any nation. It is for this reason that the Malawi Government has all along been investing in agricultural subsidies to enable smallholder farmers produce adequate food crops especially maize which is the country’s major staple crop.

But as reported in our lead article, the huge budget for maize subsidies is weighing heavily on allocations to development of potential agricultural commercialization and diversification areas such as production of legumes for export.

In the Country Private Sector Diagnostic Report dubbed Creating Markets in Malawi, the World Bank urges Government to increase resource allocation for productive investments in the agricultural sector, including by reviewing and adjusting the AIP to improve efficiency in terms of distribution, targeted farmers most likely to benefit from the subsidy, and fiscal sustainability.
It says though the roll out of AIP and beneficial weather conditions have resulted in bumper harvest, the longer term effects and implications of the AIP need to be closely monitored.

The Bretton Wood institution laments that the budget allocation for the AIP absorbs nearly half of the overall agricultural budget crowding out productive investments in the sector that could promote commercialization and more sustainable farming practices.

It says Malawi already suffers from an overdependence on maize, which drives soil degradation and increases vulnerability to climate shocks and pests, like the fall army worm.

The Bank also points out that continued focus on maize input subsidies reduces fiscal space to invest in other important sector priorities, such as irrigation and extension services.

We agree with the World Bank in urging the government to work on finding an exit strategy for the AIP as it moves to commercialise and mechanise the agricultural sector to support industrialisation as reflected in Malawi 2063.

We feel it is high time government concentrated on assisting farmers to form cooperatives and acquire loans to procure improved seeds, fertiliser and machinery for their agricultural activities.

As stated in the World Bank report, years of subsidizing peasant farmers have not benefited the country as yields have largely stagnated over the last decade despite the subsidy programme.
Just as the report says, it is also imperative for the Malawi Government to channel a percentage of the funds going to maize subsidies to irrigation infrastructure and extension services to improve climate-smart agricultural practices which would help to boost resilience to shocks.

It is high time government assisted more subsistence farmers to graduate into commercial agriculture other than continuing to subsidise their production at peasant level.