Government has announced that the 2016/2017 Budget has allocated K35. 5 billion for the purchase of food response.
Minister of Finance and Economic Planning, Goodall Gondwe has announced today when presenting the 2016/2017 Budget estimates.
"Of this amount, MK6.0 billion is in support of the winter cropping initiative to purchase maize from large scale farmers through contract farming." He indicated
"The total allocation for maize procurement is additional be pleased to note that development partners cooperating under the Multi-Donor Trust Fund in Agriculture have indicated that they may provide additional resources specifically in support of winter cropping." Said Gondwe
He said ADMARC is also purchasing local maize for immediate sales with support provided through Government guarantees for ADMARC to borrow from commercial banks to purchase food for sales to the public.
Hon. Gondwe mentioned that the U.K. and the ADB already pledged their support in response to President Peter Mutharika's disaster call and that United States Government has already pledged support amounting to about US$63 million for humanitarian food assistance, which will be managed by the World Food Program (WFP). In addition he said the ADB has also pledged US$18 million.
He said other support for food crisis will come from Chinese Government who pledged over US$9 million and from the Japanese Government of US$7 million.
But he noted that the IMF has also provided support amounting to US$49 million through the Augmentation of Access facility, which allows the Government to borrow more money from the Reserve Bank of Malawi specifically for this purpose. He added that the World Bank currently conducting a post disaster needs assessment in the country, to determine their level of support through the Crisis Response Window facility a facility that was used by the World Bank to provide support amounting to US$80 million in response to the flood disaster of 2014/15.
Gondewe also mentioned that through resource support from European Union and the World Bank, each district has been allocated with K500 million in this financial year towards Public Works Programme in order to boost rural income among smallholder farmers in rural areas to enable the buy food. He noted that it is clear that people in rural areas have had drastically reduced agricultural production due to the drought, and that their incomes have also been reduced.
The second round crop estimates recently released by the Ministry of Agriculture, Irrigation and Water Development showed that maize production during the 2015/16 growing season has declined by an estimated 12.4 percent relative to production in 2014/15.
Maize production has been estimated at 2.4 million metric tons. It is estimated that the country requires an additional 790,000 metric tons of relief food to support an estimated 8.4 million people. An additional 250,000 metric tons is required for sale in ADMARC markets, while another 250,000 metric tons is required to restock the strategic grain reserves.
Get 2016-2017 Budget Statement here
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