|Written by Charles Mpaka|
|Monday, 11 January 2010|
For a country whose lifeblood is agriculture, the cost of droughts and
floods does not end with the wilting or washing away of crops. It also
hits the national economy. CHARLES MPAKA writes
As Frackson Saidi accounts for his desperation now that his maize has wilted under the Neno dry spell, communities that are receiving good rains and have a promising crop may not think that the effects of that drought will reach them.
Saidi, 61, told Malawi News last week he had never seen such a drought in Neno since. To underline the tragic scale of the problem, he said the crop was beyond redemption.
“Even if the rains were to come, the crop is unlikely to survive. Government must assist us [with fertilisers and seeds] to replant. Otherwise, it will be forced to provide us with relief food next year,” he said.
This is more than an individual problem. UNDP indicates in its 2008 Human Development Report that effects of these natural disasters spiral beyond the fields and locations where the droughts and floods have happened. They affect the national economy.
“When rains fail, the ripple effects are transmitted across many areas. Losses in production can create food shortages, push up prices, undermine employment and depress agriculture wages,” says UNDP.
K3 billion loss
Illustrative details have emerged through a study conducted late last year by the International Food Policy Research Institute (IFPRI) together with Ministry of Agriculture and Food Security.
Droughts and floods combined cost Malawi economy about K3 billion [US$22 million] of its total aggregated wealth.
The two factors affect Malawi’s Gross Domestic Product (GDP), particularly because they hit the main maker of Malawi’s economy, namely agriculture.
Agriculture in Malawi accounts for 35 to 40 percent of GDP. It provides employment to 85 percent of the workforce in Malawi.
The sector also contributes between 85 to 90 percent of foreign exchange earnings and 60 to 70 percent of raw materials for the manufacturing sector.
In a policy brief titled “Economic losses and poverty of droughts and floods in Malawi” released on December 28, 2009, IFPRI says reliance on maize and tobacco is specifically the reason Malawi’s fragile economy is vulnerable to drought and flood related shocks.
Tobacco is the single major forex earner for Malawi. On the other hand, maize, Malawi’s staple crop, influences strongly the food inflation which claims a large share of the country’s Consumer Price Index.
The maize abundance and surpluses realised over the years have thus helped to hold down inflation and stabilise the economy.
The impact starts at a small scale hitting places like Neno and people like Saidi and their immediate families and communities.
In the 2001/02 drought, when Malawi suffered one of the worst famines in recent times, between 500 and 1,000 people were reported to have died as a result.
The effects of the drought rippled on to 2005 at which point 5 million people were affected by famine. An estimated 20,000 people died from malnutrition and diseases associated with the famine.
In the case of floods, the past four years of generally good rains in Malawi have seen thousands of people being displaced and losing their crops, property, farm land and personal productivity due to floods in the Lower Shire and other parts of the country.
But the devastation from either disaster actually goes beyond what is seen because Malawi’s economy relies on agriculture.
Small and medium scale farmers are the most affected when these calamities happen. They constitute over 80 percent of farmers in Malawi and they suffer larger losses than large-scale farmers because they often rely on local maize varieties that cannot stand severe and prolonged droughts.
farmers are without adequate financial and material resources to
sustain and regenerate themselves through periods of floods and
“Given the importance of agriculture in the rural economy, it is not surprising that the rural poor are found to be more sensitive to droughts. Small and medium scale farming households are particularly vulnerable,” says IFPRI.
The disasters reduce production locally which in turn increases demand for maize imports and affects Malawi’s exchange rates. When demand for maize imports rises and tobacco production and exports fall, Malawi’s exchange rates also falls.
Related industries down the chain are hardly safe.
“Households engaged in downstream food processing are adversely affected by rising agricultural prices. Similarly, poultry is hurt because maize is an important animal feed. Many services are also closely linked to agriculture, such as trade and transport, and so this sector also contracts during droughts,” IFPRI reports.
Industrial production faces relatively low risk during droughts as it may grow taking advantage of the declining exchange rate and the lower wages accepted by workers some of whom have lost employment in the failed mainstream agriculture production.
Overall, Malawi loses an average K1.8 billion of its GDP each year due to droughts, according to IFPRI.
The impact of floods at national level is often less than that of droughts because floods happen in particular areas. But the damage is considerable. Losses in agriculture during floods range from 3.5 to 8.2 percent depending on the periods between one flooding and another.
Because of floods, most of which occur in the Southern Region, Malawi loses an average K1.2 billion of its GDP each year.
He would have to come up with ways of generating cash with which to buy food: he may have to sell his chickens and ducks if he has some, send his children to look for money in Blantyre or Lilongwe and sell some of his farm implements, his bicycle and clothes.
Also, his productivity and that of his family will fall. Economic policy analyst Mavuto Bamusi says emergencies such as droughts and disasters erode or reduce the capacity of both the land and people to be productive, hence weighing in heavily on aggregate national economic wealth.
“When capacity to produce is reduced to the minimum, the price is very high because it means weak or declined economic growth,” he says.
Weaker economic growth may lead to cuts in government revenues, eventually affecting government’s ability to invest in health, agriculture, education and infrastructure development.
Not only Neno would be affected with reduced government investment.
The organisation adds that Malawian farmers should adopt more drought-resistant maize varieties as local maize varieties have shown to be worst hit by droughts as compared to composite varieties.
Bamusi says the call for crop diversification is an overused argument that now needs full scale implementation.
That is apart from ensuring that the national budget is fiscally ready for a comprehensive disaster management.
“Much if what we have in our national budget is for operational expenditures. We need to invest in forecasting and in income generating activities for the people affected,” he says.
National Coordinator for Civil Society Agriculture Network (Cisanet) Victor Mhoni says Malawi has appropriate strategies in place to respond to such risks but the country falls critically short on implementation.
“We spent a lot of time developing food and nutrition policy in mid 2000. How the country can protect the economy and buoy agriculture in the event of floods and drought are issues that were included in that policy. But, as a country, we are hopeless on implementation: it is sporadic and fragmented,” says Mhoni.
Solutions are there in different government departments but there is no coordination on their implementation, he says.
Mhoni further argues that Malawi’s agriculture investment should be based on what is grown where, not what government wants to be grown.
For example, in Karonga, people traditionally grow and eat more rice than maize. If government gives maize subsidies to the rice growing community there, that would kill the rice production and the maize production would run at a loss because that is not what farmers are interested in and they do not have skills in that area.
“Our investment ought to be agro-ecological based and that could help the nation deal with the impacts of droughts. The green belt could support Malawi’s economy over drought and flood crises but only if it also takes into account what is grown where and support production on that basis,” Mhoni says.
Deputy Minister of Agriculture and Food Security Margaret Roka Mauwa says a loss of K3 billion in a year is huge to a small economy like Malawi’s that needs every single kwacha for development.
But she says her ministry, through the land resources department, has been promoting agricultural practices that would contribute to enabling Malawi’s economy remain robust in events of climatic disasters.
These are natural disasters, she says, and no one can construct a policy to stop them from happening.
“But we can mitigate their impact. Basic agricultural practices such as use of manure and construction of box ridges help to retain the moisture. We have also been encouraging mixed farming and pitting for water conservation apart from discouraging farming close to river banks to prevent flooding,” says Mauwa.
These messages have been going to farmers for a long time. Is anything working?
are dealing with people’s attitudes that take time to adopt certain
technologies being advanced. What we need is a coordinated effort from
all the departments concerned because dealing with droughts and floods
is not the job of the department of agriculture alone,” she says.
The subsidies have been hailed across the world as an initiative that stemmed the tide of the impacts of the floods and droughts of 1999 and 2001/02. But, alone, they will not bring a lasting solution.
Economists tip social cash transfer programmes as essential in making rural farmers respond to drought and flood outcomes through, for example, being able to acquire farm inputs for replanting and purchasing food supplies.
Bamusi says such measures cushion those people that are directly affected from the effects and make them productive during the emergences, thereby keeping economic growth on its path.
He observes there has also been lack of honesty in the management of resources for investment in agriculture and relief in disasters.
“We need accountability in some of the coping mechanisms,” he says.
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