Household maize harvest. Photo © FAO/ Bennie Khanyizira

4 November 2015, Lilongwe, Malawi - There is need to reduce ad hoc policy interventions in the maize market and instead develop long-term strategies for stable markets in which the Government intervenes according to clearly defined and predictable ground rules, the Food and Agriculture Organization of the United Nation (FAO) has said.

Making a presentation on “Incentives for staple food production: a regional perspective” in Malawi on October 1, 2015 during a National Symposium for Maize Markets, Christian Derlagen - Policy Adviser and Advocacy Coordinator for FAO’s Monitoring Food and Agricultural Policies Programme (MAFAP), suggested that Government intervention can make prices and production of maize more predictable.

“This [intervention] will make it more attractive for farmers to invest in maize production and lead to development of increased commercial maize production that can be traded within Malawi and with her neighbouring countries,” he said.

The theme of the symposium was: “Making Maize Markets Work for All Malawians,” coming against a backdrop of prevailing dysfunctional maize market system.

Derlagen’s presentation examined whether public policies and the structures of the Malawi maize market were providing price incentives to farmers. It also zeroed in on evidence-based results from other countries, according to MAFAP’s analysis, to be able to compare the levels of price incentives for maize production in Malawi with those in other countries within the region.

He said there is need to systematically monitor the effects of policies on the food and agricultural sector in Malawi, as structural policy analysis will help the Government in creating a more enabling environment for agricultural growth and food security. 

Maize as a strategic crop and its impact on economy

Maize is a strategic commodity in Malawi because it is a staple food crop with enormous influence on the economy owing to its inescapable influence on inflation, interest rates, and exchange rate. The critical role of maize is evident in times of importation after severe shortages.

Government of Malawi says it contributes one-third to the country’s Gross Domestic Product (GDP) and is responsible for 60 percent calorie consumption in the country, largely produced by 84 percent of poor rural people who depend on subsistence agriculture for their livelihoods.

In his remarks during the official opening of the symposium, Malawi’s Vice President Dr. Saulos Chilima highlighted the critical role maize production plays to the country’s economy.

“It is imperative to underscore that maize market, like any other agricultural crop, is a haphazard market with high levels of uncertainty or predictability because its production is largely rain-fed,” he said.

He added: “When weather patterns are favourable, there is excess and therefore prices slump. When weather patterns are unfavourable, there is shortage of the commodity ad prices boom.”

Dr Chilima, thus, noted that the maize market and market structure were a blessing to a producer in times of a curse and vice versa, underlining the economic push and pull factors of supply and demand in a perfect market system.

Malawi, ranked 174 on the UNDP Human Development report (2014), declared a State of Disaster on January 13, 2015 after severe flooding hit 15 of the country’s 28 districts, destroying infrastructure, washing away 64, 000 hectares of crop fields, livestock, and affected 1.1 million people in total, killing 101 people with 172 others reported missing.

The situation was further compounded by a month-long dry spell that followed the floods when maize was at tussling stage and this affected total yield, resulting in the country registering a crushing crop deficit of 30 percent, against the national maize food requirement of 2.4 metric tonnes to feed an estimated 16 million population.

According to the July 2015 Malawi Vulnerability Assessment Committee (MVAC) report, 2.8 million people in Malawi will have no food until the next crop harvest, representing 17 percent of the total population. The country now requires 124, 183 metric tonnes of maize costing $146.378 million, forcing President Peter Mutharika to appeal for international assistance to avert a food insecurity crisis.

Translating SDGs into national outcomes to end hunger

Making his statement, Director General of the International Food Policy Research Institute (IFPRI), Dr Shenggen Fan, called for government intervention to help markets work for all, saying when markets have failed subsidies are needed to protect the poor.

He also reminded participants on the need to integrate nutrition access into agricultural production, adding it was not enough to simply focus on producing more without looking quality of output.

“We should make sure our agriculture production sector produces the nutrition outcome,” he appealed.

Commenting on Goal 2 of the recently adopted 17 Sustainable Development Goals (SDGs) which aims at ending hunger, food insecurity and promote sustainable agriculture by 2030, Dr Fan said the global blue-print should be translated into national development outcomes, with the civil society working collaboratively with everyone in ending hunger.

On their part, the civil society agriculture organizations – represented by the Farmers Union of Malawi (FUM), Civil Society Agriculture Network (CISANET) and Farm Radio Trust (FRT) – demanded the abolition of export and import bans, support towards contract farming, management of speculation on the maize market which tend to heighten inflation, improved information system in the maize market and political will to make maize markets work for all Malawians.

The symposium was organized by IFPRI in collaboration with FAO, Lilongwe University of Agriculture and Natural Resources, Indaba Agricultural Policy Research Institute of Zambia (ISPRI), World Bank, the Government of the Flanders, the European Union, the United Kingdom’s Department for International Development (DFID) and the United States Agency for International Development (USAID).

Contact:

Mike Chipalasa | Communications Officer - FAO Malawi | Tel. (+265) 888 715 385 | Email - [email protected]