Upcoming Malawi Country Report: MAFAP analysis to support policy dialogue and decision-making in Malawi
The report will be presented for discussion to the Ministry of Agriculture and Food Security (MoAFS) and other relevant stakeholders in April 2015. Information on the effects of policies and public expenditure supports policy makers and governments in identifying, articulating and assessing options for reforming food and agricultural policies and making informed agricultural investment decisions.
This report provides an in-depth analysis of the effects of food and agricultural policies in Malawi over the period 2005-2013, and carefully examines: (i) the effects of policies and market performance on price incentives for producers, consumers and other agents in six key agricultural value chains (maize, sugar, groundnuts, tea, tobacco, and cotton); (ii) the level and composition of public expenditure in support of the food and agricultural sector; and (iii) the degree of coherence between governments’ stated policy objectives, the policy measures implemented to achieve those objectives, and the effects they generate.
The analysis identified several policy and market factors that created disincentives to maize production despite the commodity’s key role in national food security and largest share of budgetary support provided in the framework of the Farm input Subsidy Programme (FISP). The fixed exchange rate policy (until 2012), poor infrastructure, limited storage and credit facilities and lack of a market information system are among the main factors affecting maize farmers and their capacity to market their produce and take advantage of higher off-season prices. Although the current policy strategies aim to diversify and boost agricultural exports, similar constrains affected incentives to production of key export commodities; namely, cotton, groundnuts, tobacco, tea and sugar.
Despite the predominant role of agriculture in the Malawi economy, budgetary support to the sector has increased at a rate significantly lower than the total national budget. This is also due to the repeated suspension of development aid since 2010. Furthermore, the bulk of public expenditure in support of food and agriculture is spent on input subsidies in favour of maize producers, neglecting longer term collective investments, such as agricultural research or rural infrastructure, with a potential greater impact on agricultural production diversification and rural development.
Data and information used to draft the country report have been drawn from the value-chains analyses and the public expenditure review prepared by the MAFAP secretariat with support from the Centre for Agricultural and Rural Development (CARD) of the Lilongwe University of Agriculture and Natural Resources (LUANAR) in Malawi.
The report is available here.