1

Long term agricultural strategy:

The Role of the FISP

July 2014

Andrew Dorward

2

Overarching objective

‘The reduction of poverty through sustainable economic growth and infrastructure development’

Malawi Growth and Development Strategy II 2012-16 (MGDS II)

3

Challenges: •low productivity, •over dependence on rain-fed farming with limited irrigation development, •low uptake of improved farm inputs, •weak private sector participation, •low investment in mechanization. Associated with

• high transport costs, • inadequate farmer organizations, • insufficient extension services, • inadequate markets and market information, • limited access to agricultural credit, • inefficient input and output markets • low technology development and transfer

MGDS II: Agriculture and Food Security a key priority area

4

overall agriculture & food security goals •“to increase agriculture productivity and diversification” •“to ensure sustained availability and accessibility of food to all Malawians at all times at affordable prices”.

Malawi Growth and Development Strategy II 2012-16 (MGDS II)

5

Aims:•increase agricultural productivity, •contribute to 6% growth annually in the agricultural sector, •improve food security, •diversify food production to improve nutrition at household level, and •increase agricultural incomes of the rural people Focus areas:

Food Security and Risk Management; Commercial Agriculture, Agro-processing and Market Development; Sustainable Agricultural Land and Water management.

Key support services: Technology Generation and Dissemination; Institutional Strengthening and Capacity Building

Cross-cutting issues: HIV Prevention and AIDS Impact Mitigation; Gender Equity and Empowerment

Agricultural Sector Wide Approach (ASWAp)

6

Proposed agricultural sector aim

To increase labour and land productivity for national food security and agricultural and

non- agricultural growth.

7

• Variety of different agro-ecological conditions & soil types etc• Range of different crops for both domestic & export markets. • Relatively favourable rainfall & rivers & lake water for

irrigation. • Strong social, political & technical commitment to agriculture • Low cost labour• Experience & capacity in different aspects of agriculture

(farmers, private companies, NGOS & government)• Good but below potential agriculture performance with

macroeconomic stability & favourable rains.

Malawi agriculture: strengths

8

• Lack of consistent & coordinated strategic policy & programme design & implementation

• Lack of consensus on critical growth strategies • Government, politicians & donors: different & changing

interests • Limited civil service capacity, resources , lesson learning &

evidence based policy (lack of critical agricultural statistics)• Weak inter-sectoral coordination• Large financial flows attract politicisation & fraud • Poor infrastructure (roads & irrigation)• Weak business environment & changing policies inhibit private

sector • Low levels of literacy & education • Imports & exports inhibited by high road & port costs, delays • Dependence on maize & tobacco• Small domestic markets & small player in international

markets

Malawi agriculture: weaknesses / challenges

9

Farmers•Roads•Markets•Poverty•Low literacy & education•Lack of financial resources•Small fragmented holdings•Seasonal pressures (hungry gap, prices, sickness….)•Low maize productivity trap•Women face particular difficulties (multiple responsibilities, limited access to & control of resources, early marriages…. )•Poverty & child nutrition: ‘life course’ & inter-generational traps

Malawi agriculture: weaknesses / challenges (cont.)

10

High poverty rates (50% <$0.40 in 2004)

Small holdings (50% < 1.0ha)

Continuous maize cultivation

Declining soil fertility

Recurring food insecurity

Highly variable maize prices

97% farmers grow maize (half also buyers)

>70% cultivated land & under maize

Malawi rural economy: poverty & the low maize productivity trap

Low producer investment

Unstable maize prices

Low maize & agric productivity

Consumer ‘lock in’ to low productivity maize

Low & vulnerable real incomes

Low demand & for non-agric goods &

services

Limited agric. credit

11

• Current weaknesses also pose opportunities for improvement

• Local economy multipliers • Investment opportunities in agro-processing industries• High International prices of some exports. attracting

private investors (funds & technical & market expertise).• New domestic & regional market opportunities. • Mobile phone spread for service access• Potential mineral earnings• Relatively low agricultural growth rates have high

potential to promote wider pro-poor growth• Climate change funds? • Post election opportunities?

Malawi agriculture: opportunities

12

• Continuation & potential worsening of current processes • population growth; • land degradation; • forest, soil & fisheries loss,

• Continued ‘weaknesses ‘• continued dependence on but reduced aid inflows; • economic instability;

• Potential new emergent changes• Climate change (temperature, rainfall, evapo-

transpiration & water, global food prices)• Negative changes in regional markets,

Malawi agriculture: threats

13

FISP input purchase

Input market development

Incremental input purchase

Legume productivity

Incremental input use

SOIL FERTILITY

Maize productivity

INCOMES

LABOUR & LAND

PRODUCTIVITY

FOOD SECURITY

MAIZE PRICES

COSTSSCALE

LOGISTICSFINANCE

PPPAGRONOMY

COMMITMENTCONSISTENCY

COORDINATIONCOMPLEMENTARITY

SEQUENCING

RESEARCH

EXTENSION

ROADSEDUCATION

HEALTHMARKETS

…………

GRADUATION

MAIZE MARKET

Release

Non-maize production

Non-maize demand

EXPORTS & IMPORT

SUBSTITUTION

DOMESTIC AG & NON AG

GROWTH

PROCUREMENT

TIMING

TARGETING

PRIVATE SECTOR

CASH TRANSFERS

FARMER CONTRIBUTIONS

SECURITY

INPUT PACKAGES

14

Long term agricultural strategy:

The Role of the FISP

July 2014

Andrew Dorward