Revitalizing Malawi’s Economy: Expert Insights on FISP’s Impact and Opportunities for Growth

Key Business Points

• Malawi’s Farm Inputs Subsidy Programme (Fisp) has limited impact on food security despite consuming over two-thirds of agriculture and food-sector spending, according to economist Marvin Banda.
• The programme’s contribution to national output remains marginal, with a value of only about 0.6 percent of GDP in the 2024-25 financial year, highlighting the need for a more effective approach to support smallholder farmers.
• Proper planning and timely delivery of farm inputs are crucial to the success of Fisp, with experts calling for a year-round, continuous subsidy to support smallholder farmers and address challenges such as poor timing and limited market influence.

The Malawian economy’s recovery this year is heavily reliant on a successful agricultural season, which is facing challenges due to the limited impact of Fisp. Despite being a crucial programme for supporting poor smallholder farmers, who make up the majority of Malawi’s food producers, Fisp’s benefits are being undermined by poor planning and timing. Economist Marvin Banda warns that continued reliance on the scheme could undermine the country’s economic rebound, emphasizing the need for a more effective approach to support smallholder farmers. The programme’s limited multiplier and value-added effects are also a concern, with national food availability unable to rely on a programme reaching roughly one million beneficiaries.

Agriculture policy analyst Tamani Nkhono Mvula agrees that Fisp is critical for supporting smallholder farmers, but notes that poor planning is a major challenge. He proposes a year-round, continuous subsidy rather than one tied to a single rainfall season or fiscal year cut-off, allowing farmers to use inputs for winter or irrigated crops if they miss the main planting season. This approach would help to support smallholder farmers and address challenges such as poor timing and limited market influence. Mvula also emphasizes the importance of "kugunda kwa mphepo" (farming with planning), highlighting the need for careful planning and timing in agricultural production.

The government has increased beneficiaries under Fisp from 528,020 to 1.1 million, resulting in the programme’s allocation ballooning by K129.6 billion to K260 billion. However, experts warn that adequate food supply is crucial to addressing many problems, including high cost of living and inflation. Consumers Association of Malawi Executive Director John Kapito concurs, blaming current challenges on failure to plan properly for farm inputs availability ahead of the season. With the government allocating K60 billion for maize purchases this fiscal year, and an extra K20 billion for maize purchase logistics in the revised budget, it is clear that "zachuma za kokwela" (farm inputs) are a critical component of Malawi’s agricultural sector. As the country looks to boost food supply, ease inflationary pressures, and support household incomes, it is essential to re-evaluate the effectiveness of Fisp and explore alternative approaches to support smallholder farmers and drive economic growth.

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