FOOD CRISIS RESPONSE BUDGET SUPPORT PROGRAMME
- Reference: P-MW-A00-006
- Approval date: 11/11/2016
- Start date: 29/12/2016
- Appraisal Date: 19/07/2016
- Status: OngoingOnGo
- Implementing Agency: MINISTRY OF FINANCE
- Location: Nationwide
Components/Activities: The Bank's Support (UA 12 million) to the Programme will specifically contribute to addressing the immediate interventions envisaged under the programme. The components to be supported are as follows:
(i) Direct Maize Purchases for the Strategic Grain Reserve (UA 6 million); and
(ii) Purchases form Local Commercial farmers (Winter Crop) (UA 6 million).
Component 1: Direct Maize Purchases: Government through National Food Reserve Agency (NFRA) will buy maize from the local suppliers that have stocks within the country as well as import. These suppliers will include those that have shown interest in supplying maize to the NFRA. NFRA currently have stock levels of about 6,800 mt instead of the optimal levels of 75,000 mt. The Bank resources will enable Government procure about 16,800 mt of maize.
Component 2 - Purchases from Local Commercial farmers (Winter Crop): The Government will purchase maize from large-scale commercial producers and estate owners such as Illovo and Malawi Mangoes who will be commissioned to use their existing spare irrigation capacities to increase output from the second crop - maize. It is estimated that about 18,400 MT of maize can be produced under this component.
The programme objectives are as follows:
"The programme objective is to contribute to the replenishment the Strategic Grain Reserve (maize stocks) of the country
Malawi has had devastating impacts of weather-related disasters that resulted in negative effects on food production and productivity. These effects have been quite significant on maize, the country's main staple, rice and to some extent some cash crops such as groundnuts and soy beans. Although the country produces diverse food crops, maize has remained the central crop in the food security basket for Malawi. It is therefore no surprise that maize continues to feature as the focus of food security and agriculture policy in Malawi; for example it is a priority commodity in both the Malawi Growth and Development Strategy (MGDS) and the Agriculture Sector wide Approach (ASWAp). Henceforth, a number of programmes have been implemented to promote maize production, key among them is the Farm Input Subsidy Programme (FISP) that was introduced in the 2005/06 cropping season and continues to date, whilst having undergone various reforms to improve programme impact.
Despite these initiatives, maize productivity has remained low over the years, averaging about 2.3 mt per ha. This is far below the potential estimated to be as high as 10-12 tonnes per ha. In part, this is due to weather variability including dry spells, droughts and floods, which the existing programmes have not managed to address. There is evidence that productivity of maize will increase by 1.1 mt per ha if irrigated under smallholder farming. With medium- and large-scale irrigation the incremental yield is relatively high with an additional 2.0 mt per ha. In this respect, investing in irrigation, where environmentally sustainable, would boost productivity and complement rain-fed food production for the country.
It is also important to note that persistent occurrence of weather shocks in Malawi has led to expensive humanitarian response involving government and development partners. Available records indicate that the previous four occurrences of droughts and floods have cost the country close to US$1.0 billion. This cost is likely going to continue rising due to the forecasted need for humanitarian assistance, as climate change shocks persist, unless investment in medium to long-term resilience of the food production system is made.
The Bank's current intervention therefore proposes to address the fundamental and immediate challenge by procuring maize from the market to replenish the Strategic Grain Reserve (SGR) from the open market, and commissioned large/medium scale commercial through the production of a winter crop (maize). This is to form part of the Government's Overall Response Plan to the Malawi Vulnerability Assessment Committee Report.
The following are the expected programme outcomes and benefits:
"Replenish the SGR with about 36,100 mt of maize purchased; "Increased food and nutrition security at national level.
KISYOMBE Vinda Highson Lutamyo - RDGS4