Farmers Union of Malawi (Fum) has disclosed that its coordinated produce export venture by a consortium of local commercial farmers failed to take off this season due to government’s failure to guarantee that there would be no export bans during the marketing season.
Fum President Felix Jumbe told the media in Lilongwe yesterday that banks refused to finance the US$200 million venture unless there was an assurance from government that there would be no export bans in the year.
“But the Ministry of Trade gave us a vague response,” claimed Jumbe.
Secretary for Trade Nebert Nyirenda admitted in an earlier interview that government could not rule out any export bans, saying such decisions always depend on food security situation at a particular time.
“The fear of government was that produce grown with subsidies like maize could be among the exports, a scenario that could eventually create food shortage,” said Nyirenda.
He said, however, government would have worked on specific modalities to control exports under the initiative.
According to Jumbe, production and export of the crops under the initiative were to be done in line with government’s own National Export Strategy and financed through the Export Development Fund.
He said it was planned that exports under the project would start this harvest season to support government’s intentions of increasing foreign exchange earnings for the country as one way of addressing the economic problems prevailing in the country.
“The producers that were mobilised planned to produce 100, 000 tonnes each of crops such as soya beans, groundnuts, rice, red beans and maize with loans facilitated by the Export Development Fund,” said Jumbe.
He said Fum mobilised companies and commercial farmers, each with land of not less than 40 hectares, in districts such as Chitipa, Mzimba, Ntchisi and Mchinji to produce specified crops under contracts
He described the failure of the initiative as frustrating, saying government needs to put its house in order if the dreams of increasing export earnings for the country are to be realised.
“We have lost an opportunity. Government should quickly review the export policy and establish an export corridor through which commercial farmers should be allowed to produce for exports without any hurdles,” said Jumbe.
He also suggested that policies should ensure that companies that use farm produce as raw material should have their own contracted farmers to supply them with the crops instead of letting them buy from the open market.
“If they source, for example maize, from the market, it means they are benefitting from the social subsidy programme for commercial purposes,” said Jumbe.