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January 27, 2009

Study claims Malawi maize harvest estimates inflated

Malawi sexed up its maize estimates for the 2007/08 and the 2008/09 season, a USA food security study has disclosed. The study has disclosed that following this sexing up of the estimates Malawi faces a food crisis between now and the start of the next harvest season.

The study done by USA’s Michigan State University (MSU) covering Eastern and Southern Africa revealed that Malawi, alongside Zambia, will be among the countries to be hit by a food crisis not because of the high world food prices but because of physical shortages of the grain.

“It is becoming increasingly clear that national crop estimates in some countries are unreliable. A clear example how inaccurate crop production estimates can exacerbate food insecurity is the case of Malawi in 2007/08,” said the study. It added: “It is widely believed that the 2007 Malawi harvest was overestimated by at least 25%. If the government had been able to produce a more accurate estimate of crop production, it might not have arranged to export maize, which in turn might have avoided the huge price surge in late 2007/early 2008 which caused great hardship for maize buying households.”

It indicated that on the basis of the Government’s forecast of a record maize harvest in 2007 of 3.4 million tons against a 2.0 million tons annual consumption, the government planned to export over 400,000 tons of maize. The study said against the perceived surplus of 1.2 million tons government authorised private traders to supply 450,000 tons for export to other countries. However, the private sector reported difficulties in sourcing this quantity of maize, and by late 2007 Malawi had only exported 283,000 tons.

“The government then suspended further exports due to a rapid escalation in domestic market prices. Within several months after the harvest, maize prices reached near record highs, exceeded only in the major crisis year of 2001/2 and the drought year of 2005/06,” said the study. It explained that by late 2007/early 2008, maize prices in Malawian markets were U$100 (K15,000) to $150 (K22,000) per ton higher than in other regional markets while the 2007/08 season was also characterized by reports of localized maize shortages, rationing of maize by ADMARC, and net maize imports of over 50,000 tons from neighbouring countries.

“These outcomes are difficult to reconcile with the official estimates of a record maize harvest of 3.4 million tons in 2007. There is a widespread perception that maize production estimates in Mozambique and Malawi are routinely overestimated and that political considerations may influence these estimates,” said the report on the study.

The study said in May 2008 again the Government of Malawi reported another major maize surplus, estimated at 500,000 tons. “There is increasing speculation that the official government maize production forecasts may have been overestimated. Reduced confidence in official crop forecasts creates difficulties in determining whether formal imports are required,” said the report.

The study said evidence of overestimated official crop estimates is that while national maize production estimates for the 2007 and 2008 harvests were both far above national consumption requirements, imports from Mozambique and Tanzania have been streaming into the country almost continuously since mid 2007. Quoting Femine Early Warnings Systems Network (FEWSNet), the study said Malawi imported 59,000 tons of maize in the 2007/08 season through informal cross-border trade flows and in the first 3 months of the 2008/09 season alone, Malawi has imported over 40,000 tons of maize.

The MSU study...was aimed at examining the impact of recent world food price changes on domestic maize and fertilizer prices in the region; assessing possible changes in cropping patterns, national food production, and consumers’ access to food in light of these price movements; and consider the implications for policy and program response by governments, donors, and the private sector. Its focus was on Kenya, Malawi, Mozambique, Zambia, and South Africa.

“There is some evidence of a potential food crisis emerging in Zambia and possibly Malawi in early 2009, not because of world food price levels, but because of potential physical shortages, which are likely to send maize prices sharply higher over the coming months. “In both countries, national maize supplies may be depleted before the 2009 harvest and maize imports may be required to avoid rationing of government stocks. However, neither the Zambian nor Malawian government has initiated plans to import maize, and both governments have directly or indirectly inhibited the private sector’s incentives to do so,” said the study.

The study also revealed that apart from the inaccurate crop estimates in the countries, slow recognition of deficits and the need to import are also the major causes of the food crisis. The study stressed that price stability requires accurate crop forecasts so that other plans, such as export volumes, quantities to be purchased by the World Food Programme (WFP) through local and regional purchase operations, and state marketing board purchases and stock releases, can be made without having unexpected effects on prices. It said at the moment non-governmental organisations (NGOs) and WFP have indicated that they are unable to source maize in Malawi for school feeding and relief operations because they are forced to tender at prices below 52 kwacha per kg, which both large traders and ADMARC are refusing to sell at.

The study also said without the formal recognition of a food problem, relief organizations cannot request financial support for relief food purchases thereby undermining social entitlement programs and impeding relief food operations. To avert a “potential catastrophe”, the MSU study called for coordination between the public and private sector over the quantities of maize to be imported and the price at which imported maize will be sold.

However, Deputy Minister of Agriculture Frank Mwenifumbo in an interview insisted that based on local studies Malawi has enough maize to last up to the coming harvesting period. “Our findings are based on established thresholds that we use and we have evidence that there is enough maize out there. Normally such studies are hypothetical, their findings are wrong,” said Mwenifumbo, while questioning why such a study was done without government knowledge.

The deputy minister said government was aware that there were some non-governmental organisations who would want to pressurise Malawi to declare that there is a food crisis in the country so that they can raise an alarm and use that to mobilise money for their own personal needs. “Why should we make such a declaration? Should it just be for the sake of declaring that there is a crisis. Some of these people just want to raise money to run their NGOs,” said Mwenifumbo.

According to a UN news agency (IRIN) report Zambia acknowledged the possibility of a shortage and has already announced it was importing 100,000 tons of maize as a pre-emptive measure. WFP office in Lilongwe declined to comment on the study saying the Ministry of Agriculture is best placed to comment on the issue because they have the most updated information on maize stocks in the country. Commenting on whether the WFP feels Malawi could make a declaration of an impending food crisis WFP Deputy Country Director and Head of Programme Karla Hershey said all unplanned relief activities require that a special request be made to WFP and it is only then that the organisation can work with donors to mobilise resources for a response.

“WFP has several ongoing Government approved activities that address the needs of malnourished children and those who are chronically ill. These activities are planned in advance and are carried out year around reaching the most vulnerable people of Malawi,” said Hershey.

The 2008/09 Food Price and Food Security Situation in Eastern and Southern Africa: Implications for Immediate and Longer Run Responses.

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