The on-going Affordable Inputs Program (AIP) is expected to be seriously hampered following the withdrawal of thirteen businesses – including the main distributors of agricultural inputs – which were to cover 400,000 beneficiary smallholder households.
Major suppliers cited the effects of Covid 19, rising fuel costs and fixed government purchase prices as some of the reasons.
While Agriculture Ministry spokesman Gracian Lungu ruled out adverse effects on program implementation, Nyasa Times learned that the move of suppliers could leave a shortfall of 800,000 bags of fertilizer.
Apparently, Lungu did not provide any reasons why the vendors turned down contract offers, saying the vendors are in a better position to explain.
Collectively, the 13 companies were to provide 40,000 metric tonnes (MT) to cover 400,000 households of the 3.7 million beneficiaries this year.
Suppliers include: Chipiku, Rab Processors, Kulima Gold, ETG, GYP Imports & Exports, Kelvam Enterprise, Tiwale Investments, Bakwena Investments, Milazi Holdings, Worldwide Wholesalers, Midima Holdings, Ellite Engineering Supplies Limited and Nellie Investment.
According to Lungu, the ministry is working to fill the void left by the 13 suppliers and has started the process of purchasing 150,000 tons of fertilizer expected in the country within a month.
“We are already working on the supply of a buffer stock which is around 150,000 tonnes and we are sure that in a month or a few weeks, the suppliers who have to be contracted to provide this buffer stock will start to provide these inputs.
“We will use Admarc and SFFRFM [Smallholder Farmers Fertiliser Fund of Malawi] to continue to operate in their depots to allow farmers to access these inputs on time and close to where they are, âone said in the press.
But Mbawaka Phiri, administrative officer of the Fertilizer Association of Malawi, suggested that suppliers could have avoided contracts because of the government’s decision to price fertilizer at K 27,000 per bag.
âThe suppliers may have boycotted the contracts because of the low prices,â said Phiri.
She said the government had to engage suppliers on the price because it was not just members of her association who were uncomfortable with the price offered.
According to her, even SMEs that are not members of the association are struggling to source this amount and have said there is a need to engage suppliers on the issue.
“The association is ready to work with the government on the issue,” she said.
Agricultural policy expert Tamani Nkhono Mvula said he was not surprised the suppliers turned down the contracts.
âThe fertilizer suppliers would like to do business. It is unfair for the government to dictate the prices. The cost of landing fertilizers is high. Selling the fertilizers at the price demanded by the government would mean that the suppliers would subsidize, which is not practical, âMvula said. noted.
Mvula also questioned whether the fertilizers purchased by the government will reach farmers on time, as the rains have started in some areas.
Initially, the government hired 164 suppliers, including small and medium-sized enterprises (SMEs) to manage the program.
However, press reports from last month indicated that there were new bottlenecks in the program, especially regarding SMEs that did not have access to financing from commercial banks.