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Malawi's Agriculture Minister:  Market Forces Not Sufficient to Improve Food Production - 2002-12-21

Malawi's minister of agriculture says he disagrees with some foreign donors who say market forces are sufficient to improve food production. Malawi is one of 14 southern African countries at risk of hunger, in part, due to mismanagement and two consecutive years of poor weather.

Malawi's Minister of Agriculture, Aleka Banda, says subsidies of maize and other crops are temporary. They will last until the government can convince donors to support alternatives, like rural credit schemes, and until the government can help more farmers adopt simple irrigation techniques, such as the use of water pumps.

The government has borrowed money from the World Bank and others to help lower the cost of fertilizer and seed to subsistence farmers and to subsidize the current cost of maize at about 28 cents per kilogram.

Maize accounts for nearly 80 percent of a Malawian family's diet. Maize meal is in high demand for making a familiar staple called nsima a starchy paste used like bread to handle pieces of meat and fish, or dip in various sauces.

In the past, donors have encouraged Malawi and other developing countries to reduce government subsidies in food production - and to rely more on private business to distribute fertilizers and seeds, and to market crops. But Mr. Banda says most industrial nations still subsidize their own farmers.

"Regarding the debate [over] subsidies, the donors are being unfair - they preach no subsidies, yet the Americans and Europeans subsidize their own [farmers] heavily," he said. "The only reason we pay attention to what they say is [that] ...they say if you are going to subsidize your people, do it yourselves. But as a philosophy, it does not make sense, because the United States farmers are sometimes paid money not to produce. We do not intend to keep subsidies forever because we simply do not have the money."

On the other hand, he says, it is much cheaper for donors to help Malawi subsidize production, like the distribution of fertilizer, than it is to subsidize consumption or the price of maize. He says the government is temporarily subsidizing production this year with so-called "starter packs" for farmers that include low-cost seeds and fertilizer. The starter packs were also credited with a boom in maize production a few years ago - just before Malawi was hit by drought and flooding.

The failure of food crops during the past two years has been blamed on flooding and drought, as well as government mismanagement. For example, the National Food Reserve Agency was criticized for selling maize reserves, some to neighboring countries, rather than saving them for emergencies.

For the past eight years, the government has pursued market reforms in agriculture such as an effort to make the Agricultural Development and Marketing Corporation, called ADMARC, operate along free-market lines.

Malawi's agriculture minister says he's against shutting down the agency.

"There are no plans to privatize ADMARC, if that means selling it off to a private operator, because of the crucial role in plays economically and socially," he said. "We have cited to the donors the example of Zambia: they had an institution called ZIMBOARD, the equivalent of ADMARC, that was closed overnight under pressure from donors with the premise that [private] traders would take over [its role]. But they did not take over."

Aleke Banda say the problem is that traders often operate along rail and road lines, but have no incentive to go into rural areas to buy and sell produce. He says ADMARC should do the job in hard to reach areas where traders refuse to go.

Some complain that Malawi was better able to feed itself under the rule of long-time leader Hastings Kamuzu Banda. He came to power shortly after independence in the 1960s and ruled until popular dissatisfaction and multi-party elections ousted him in 1994.

Under his government, state monopolies helped farmers grow and market food in contrast to the current government's adherence to free-market principles.

Agriculture Minister Banda is not related to the former president, but served in his government 30 years ago. The minister denies that food production was higher when Malawi was under authoritarian rule.

"What is true is that the donors were much [easier] on Dr. Banda than on current president Bakili Muluzi," he said. "Dr. Banda ruled during the Cold War and as an ally of the West against the communists in Africa. Because of that Dr. Banda could get away with lots of things which are not possible today. [In fact], liberal economics was strengthened in this part of the world by [the influence of former British Prime Minister] Margaret Thatcher and intensified after the collapse of the Eastern European economic [socialist and state controlled] systems. So were [then] working under very different economic systems."

Minister Banda says when the new government took over in 1994, Malawi was producing only 800,000 metric tons out of a demand for 1.8 million metric tons. He says during the next few years, the democratically elected administration tripled production until weather conditions and an end to subsidized fertilizer contributed to the recent food shortages.

To make matters worse, he said the new government had to take drastic action to reverse the economic problems it inherited, such as the devaluation of the currency, making fertilizer more expensive.

Mr. Banda says there are other differences between then and now. He says people were not allowed to complain under the authoritarian government. Even when there was hunger, he says people were supposed to praise the government. Now, he says, people complain and make demands on the government because they are free to do so.