Policy lessons from Malawi

Summary of report¹

In May 2002, ActionAid commissioned a piece of field research as a contribution to the debate in Malawi about the ongoing food crisis. The research aimed to contribute to a dialogue among stakeholders around interventions that will protect Malawian lives and livelihoods. Both short-term initiatives, specifically in the context of another poor harvest in 2002 and the possibility of an El Niño event in 2003, and longer-term strategies to generate sustainable livelihoods and reduced vulnerability to production shocks², were considered. The research team included staff from the Institute for Development Studies (IDS) Sussex, ActionAid, the Agricultural Policy Research Unit at the University of Malawi, Concern Universal, and the Malawian CISANET (Civil Society Agriculture Network).

From January to April 2002, between 500 and 1,000 people died of hunger or hunger related diseases in southern and central Malawi. As with all famines, the explanations fell into two clusters: 'trigger factors' (livelihood shocks and response failures) and 'underlying causes' (factors that create vulnerability to livelihood shocks). Similarly, the famine, like others, may be viewed as the product of 'technical' and 'political' factors combined.

Trigger factors

The 'technical' explanation: The famine followed a sequence of unfortunate events, namely production failure, information constraints, a depleted food reserve, import bottlenecks and unaffordable high food prices. During February and March 2001, localised flooding in the central and southern regions triggered a food production shock. This reduced maize production from 2.5 million metric tons (MT) in 1999/2000, to 1.7 million MT in 2000/01, and created a national maize deficit of 273,000 MT. The magnitude of the food gap was underestimated by both the government and donors, primarily due to methodological errors (exaggerated forecasts of roots and tubers production) which over-compensated for the maize gap.

The Strategic Grain Reserve (SGR) had been sold, leaving the government and donors unable to implement food distribution programmes in good time. Transport bottlenecks caused fatal delays in the arrival of food imports, in particular, congested roads, the diversion of food trucks to Zimbabwe and Zambia, a train derailment at Beit Bridge and capacity constraints at Nacala and Beira ports in Mozambique. Because of limited supplies and food marketing liberalisation, maize prices rose from MK4/kg at harvest time (June 2001) to over MK40/kg (January 2002).

The 'political' explanation: The famine was caused by negative synergies between government and donor policies and practices. The International Monetary Fund (IMF) instructed the Government of Malawi to sell the SGR, in order to repay a debt of MK1 billion incurred by the National Food Reserve Agency during set up as a quasi-independent agency. The IMF insists, however, that it advised the government to reduce the SGR from 165,000 MT to 60,000 MTnot to sell it all.

Private traders profiteered from the sale of the grain reserve, by buying maize cheaply and hoarding it until prices rose, before reselling it for exorbitant profits. Donor-government relations were strained at this crucial time, because of donor allegations of economic mismanagement and governance failures. The donors delayed responding to the food crisis while they obsessed with finding out what had happened to the SGR. If the grain was still incountry, it could be released onto the market. If politicians had profiteered from its sale, however, they should own up to this.

Underlying Causes

The underlying cause of the current food crisis in Malawi is the steadily increasing livelihood vulnerability of this predominantly rural population. Contributing factors include:

• intensifying pressure on land, accelerated by rapid population growth
• declining soil fertility associated with falling application of agricultural inputs
• strictly limited off-farm and non-agricultural income generating opportunities
• the HIV/AIDS pandemic, which is decimating the labour force and raising household dependency ratios
• government policies that favour urban populations and the business sector, including the commercial estates, to the relative neglect of smallholder agriculture
• economic liberalisation measures that have undermined farmers' access to inputs and eliminated consumer subsidies and food price stabilisation interventions.

The year 2002 was widely perceived as worse than the more severe drought of 1991/92, mainly because ten years ago, the agricultural marketing parastatal (ADMARC) had depots in the most inaccessible rural communities and made food available at affordable prices. Malawi has entered an extremely vulnerable 'transition' phase between state regulation -when ADMARC controlled agricultural marketing, input supply, and food prices, and full liberalisation - where food supplies and prices are wholly marketdetermined.

Lessons learned

Two sets of factors intersected to produce the 2002 famine, vulnerable livelihoods and weak institutions.

Livelihood vulnerability can only be addressed through socio-economic development. In particular this requires pursuing policies that, directly or indirectly, raise the incomes of poor households and diversify or stabilise their food sources, to reduce food security risks. Direct measures include employment creation programmes and enhancing access to agricultural inputs (one example, which achieves both objectives, is inputs-for-work). Indirect measures include education to improve the prospects of young Malawians finding non-farm employment, thus reducing their dependence on rain-fed agriculture.

Institutional vulnerability can best be addressed through institution-building and strengthening government capacity to design and implement sound, pro-poor policies. However these are longer-term measures. The immediate priority facing Malawi is to prevent a similar catastrophe in the coming agricultural year, which again is predicted to be a deficit year. Three key policy areas to target are the management of the SGR, the future of the Starter Pack programme, and the right to food.

Strategic Grain Reserve

The appropriate functions and stock level of the SGR must be negotiated and agreed between the Government of Malawi and its donor partners. Three key questions remain unresolved:

• What is the appropriate stock level for the SGR in order to meet national food security objectives at reasonable cost? Opinions range from 60,000 MT to 180,000 MT, or enough grain to meet 3-9 months of national consumption needs.
• Should the SGR be used to intervene in the market, e.g. to stabilise prices counter-seasonally, by buying grain at harvest and selling this grain during the 'hungry season' at cost - or should it function purely as an emergency buffer stock?
• If the SGR is to fulfil food security functions, it must be adequately capitalised. But should it be subsidised or should it be used for cost recovery?

However these issues are resolved, there is little disagreement that the SGR must be managed in a transparent manner and be subjected to regular independent audit.

Starter Packs

Since the early 1990's, the main constraint on agricultural production in Malawi has been limited access to inputs (fertiliser, seeds, credit). In this context, the Starter Pack - or Targeted Inputs Programme - makes an important contribution to the national harvest and household food security. Distribution of Starter Packs was restricted to 1 million households last year, but this year will be expanded up to 2.5 million households. However, the Starter Pack cannot be seen as a substitute for a more holistic agriculture and food security policy. The long-term solution lies in promoting production through extending access to inputs.

The Right to Food

The right to food means making adequate food available and affordable to all Malawians at all times. The allegation that private traders deliberately purchased SGR maize cheaply, to then resell it at excessively high prices during the food shortage, is an extremely serious accusation. Profiteering from hunger violates the basic human right to food, as well as the constitutional provision to guarantee access to adequate food for all Malawian citizens. Civil society must be involved in any future policy decisions that impact directly on household food security. A sensitisation campaign is needed to inform people about their right to food, and their right to hold politicians accountable if the right to food is violated.

It is hoped that the lessons learned from this research will assist in identifying more appropriate and timely interventions in the future, as well as reducing vulnerability to future food crises.

For further information, contact Sakou Jobe Country Director, ActionAid Malawi, email: sakouj@actionaidmalawi.net, or Edson Musopole, Africa Policy Co-ordinator, ActionAid Regional Office, email: edsonm@actionaidmalawi.net. The author of the report, Stephen Devereux, can be contacted at the Institute for Development Studies, Sussex, UK, email: S.G.Devereux@ids.ac.uk

¹State of Disaster: Causes, Consequences and Policy Lessons from Malawi. ActionAid report, commissioned by ActionAid Malawi and written by Stephen Devereux, June 2002

²A 'shock' is a term often used in food security analysis which describes factors or events that may affect sources or influences of household income and food supply