Tag Archives: Farm Input Subsidy Programme (Fisp)

Can Malawi learn from China’s transformation agriculture development?

modern agriculture machinery

By Joseph Mizimbe, Contributor

Malawi Government has ‘good’ agricultural policies attracting dust in the shelves at Capital Hill in Lilongwe. These policies could transform the agriculture sector and improve the livelihood of rural farmers if they were adopted. Some social commentators attribute lack of political will as the reason for the sector’s loss of vibrancy.

Malawi had vibrant support services for farmers in rural areas namely agricultural extension services, livestock dipping centres and markets. Currently Government is not offering these services despite many young people graduating with agricultural related qualifications.

Farm Input Subsidy Programme (FISP) has become a political campaign gimmick as a result it only benefits politicians and not the poor farmers. Malawi is a landlocked country blessed with huge bodies of water (lakes) and rivers that flow throughout the year, yet its people are affected by perennial food shortage because farmers only depend on rainy fed agriculture.

On the contrary China which was as poor like Malawi some decades ago, is doing fine in all sectors including agriculture, and is the world’s second largest economy. What is it that China is doing to develop its agricultural sector, Malawi should learn from it?

According to a book- China in transition: Agriculture, Rural Areas and Farmers by Jian Changyun, the Chinese Government has identified the three agro-related issues as top priorities and has policies that enhance its preference on agriculture, rural areas and farmers, to elevate the level of agricultural modernization and rural living standards, which secures happy life for farmers.

Increasingly favourable policy environment and maturing institutional mechanisms shape sound conditions for the transformation development of agriculture, rural areas and farmers in China.

China focuses on transformation development and adjust the target positioning and strategic thinking to promote the development of agriculture, rural areas and farmers towards a better future.

The country ensures basic supply of major agricultural produce, steadily raising farmers’ income, and enhance basic public services for farmers and migrant rural workers, which run parallel to the top of the Government’s agenda of addressing possible problems in the ‘three agro-related issues’ namely agriculture, rural areas and farmers.

“The Government guides urban enterprises, industry associations or industry leaders to play a leading role in the rural enterprise development and industrial upgrading. It encourages collaborative ties of urban and rural enterprises on the basis of labour division and expand urban services to the rural areas, so that the urban producer service industry can drive the development and upgrade rural leading industries,” Zhang Tianxin, a Chinese national who works for Salima Cotton Factory said.

The Chinese Government prioritizes infrastructure development covering in accordance with local conditions, roads, markets, education and training, healthcare, water supply pipe network, communications and information.

To improve efficiency, the strategic and practical needs of the financial input are taken into consideration. Such financial input give priority to critical fields, weak links and key regions, thereby enhancing development capacities.

In this regard, the demand is clarified, with preference to agricultural production areas, poverty stricken areas and vulnerable groups, to strengthen guidance and support for migrant workers, integrating into the city.

Training ideas are expanded to supply professional farmers and agricultural entrepreneurs with modern agricultural development agreeable to citizens and industrial works for the smooth advance of industrialization and urbanization.

Like Malawi, China also introduced agricultural subsidy policies whose focus is support building facilities in major fields and critical weak links of agricultural and rural development.

The country has developed small and medium sized banks, micro finance institutions and rural cooperative financial organizations, which are prudent and active relaxation of access threshold on private finance identified as the focus of rural financial organizational innovation.

The difference between China and Malawi’s subsidy programmes is that China improves its agricultural subsidy policies and implements farmers- specific income subsidy system.

“Agriculture subsidy policies are improved primarily to enhance agricultural competitiveness, coupled with farmers-specific income subsidy policies which provide appropriate income subsidies for producers in the declining traditional agriculture in the process of economic transformation,” Jian Changyun wrote in his book.

He added: “Agricultural subsidies are provided, with respect to the market mechanism, to guide the agricultural sector to enhance self-development capacity, rather than at the expense of agricultural self-development capacity and prioritize more externally significant issues, such as the severe shortage of agricultural supply.”

Chinese agricultural subsidy programmes are linked with competitiveness to prevent over-reliance on subsidies or misuse, and harm to the normal agricultural demand and supply. Chinese income subsidies cover areas facing severe difficulties in agricultural transformation and heavy pressure in income increase and market competition, represented by major production areas, and expand to farmers engaged in agricultural business and reliant on agriculture for employment and income.

If Malawi is to be at par with China in terms of agriculture, it should strategically consider promoting the transformation of agricultural development pattern and the innovation in the concept of development, and accelerate the formation of an industrial organization system for household management-based modern agriculture.

Learning from China, agricultural organizations are encouraged to be more innovative to come up with standardized operation and enhance sustainable development capacity, such as economic and technological research associations of farmers, specialized cooperative organizations, agricultural industry associations, rural labour dispatch organizations, agriculture produce-specific markets, rural specialized households, large farming and breeding households, and technological demonstration households.

Another area for Malawi to learn is that, China has leading demonstration projects and major projects with breakthroughs for conducive circular economic development in the agricultural sector, as well as energy conservation, consumption reduction, and efficient and sustainable use of agricultural resources.

 

Malawi’s Finance Minister Gondwe says 2018-2019 FISP budget is for DPP campaign

Minister of Finance, Economic Planning and Development Goodall Gondwe has admitted that government’s increase of the Farm Input Subsidy Programme (Fisp) allocation is to win votes in the 2019 Tripartite Elections and achieve food security.

In an interview on Monday, Gondwe said there was nothing wrong in seeking votes from the people.

He said: “If it’s a campaign year and we give people more to eat, what is wrong with that? We want both the votes and at the same time after crops were attacked by fall armyworms in the last growing season, we want people to have food and if we don’t give farmers enough fertiliser, there will be less food.”

The minister added that while most stakeholders suggest long-term approaches such as development of irrigation systems, Fisp is addressing food security challenges in the short-term for the underprivileged.

Said Gondwe: “For the long-term they are right, we should channel more funds towards irrigation and resilience.”

He further conceded that government will at some stage need to abolish the programme.

In the proposed 2018/19 National Budget, the Ministry of Agriculture, Irrigation and Water Development has been allocated K151.9 billion, K41.5 billion of which is for Fisp, representing 27.3 percent of the ministry’s total budget allocation.

This is an increase from the 2017/18 revised allocation of K33.2 billion for 900 000 beneficiaries.

This year’s Fisp is also targeting one million beneficiaries.

This has not gone down well with some stakeholders who have been asking government to abolish Fisp and channel the funds towards irrigation development and promotion of medium and large-scale farming.

According to Farmers Union of Malawi (FUM) president Alfred Kapichira Banda, government has increased the Fisp allocation to raise funds for the campaign period.

“Fisp is for government and not us farmers. It is clear that funds from this year’s programme will be used to fund the campaign and not to benefit the farmers.

This is why they have increased the number of beneficiaries and the money,” said Kapichira.

According to him, Fisp has not achieved its intended purpose of benefitting smallholder farmers as they still sell crops at low prices.