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IdentifierCreatedClassificationOrigin
04LILONGWE741 2004-08-06 10:00:00 UNCLASSIFIED Embassy Lilongwe
Cable title:  

SITREP 29: DISASTER ALERT FOR EMERGING HUMANITARIAN ASSISTANCE NEEDS IN MALAWI

Tags:   EAID EAGR MI 
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					  UNCLAS SECTION 01 OF 04 LILONGWE 000741 

SIPDIS

AIDAC

USAID FOR DCHA/FFP LANDIS, WELLER, MUTAMBA, SKORIC,
PETERSEN AND BERGMAN

USAID FOR DCHA/OFDA HALMRAST-SANCHEZ, BORNS, MARX,
PRATT,AUSTRENG, KHANDAGLE AND BARTON

USAID FOR AFR/DP WARREN, KNEPP

USAID FOR AFR/SD WHELAN

USAID FOR AFR/SA COOKE, HAGELMAN, LOKEN

DEPT FOR AF/S, INR/GGI, PM/ISP

NCS FOR DWORKEN

NAIROBI FOR PUTNAM, ESTES, AND DEPREZ

MAPUTO FOR BLISS AND POLAND

LUANDA FOR LYVERS

HARARE FOR ATWOOD AND REED

PRETORIA FOR DISKIN, KHANDAGLE, PRATT, HALE, SINK, AND
FAS HELM

GABORONE FOR KHUPE

ROME FOR FODAG


E.O. 12958: N/A
TAGS: EAID EAGR MI
SUBJECT: SITREP 29: DISASTER ALERT FOR EMERGING HUMANITARIAN ASSISTANCE NEEDS IN MALAWI



1. Summary: Many of the same conditions that sparked the
2001-2003 food crisis are emerging again this year in
Malawi. The recently concluded harvest was slightly below
the ten year average and below the 2001 harvest volume
that presaged the 2001-2003 food crisis. Government maize
stocks, which last year were at record highs, are
depleted. Humanitarian stocks are also low with few
donors having made formal food aid pledges to World Food
Program (WFP) emergency operations in Malawi.
Furthermore, uncertainty about Government maize imports
may create disincentives for private sector imports. A
lack of leadership in the Ministry of Agriculture has
resulted in Government inaction and conflicting messages
regarding the likely Government response. Lastly, a
devaluation of the Malawian kwacha seems possible. Such
devaluation would raise the Malawian kwacha price of
imported maize for those households dependent on market
purchases. Post request is contained in paragraph 14.



--------------------------


FINAL RESULTS FROM FOOD PRODUCTION SURVEYS


--------------------------




2. Several districts in Malawi received below average
rainfall and experienced periodic dry spells during the
2003/04 cropping season, resulting in a decline in
agricultural production. According to recent assessments,
districts in the Southern Region of the country were the
most affected. Severely affected districts (40-50 percent
decline in production relative to last year) are Machinga
(eastern part), Phalombe, Chikwawa and Nsanje. Other
affected districts (30-35 percent decline) include
Chikwawa, Blantyre, Chiradzulu, parts of Thyolo, Mwanza,
Balaka, parts of Zomba, Mangochi, Salima and Karonga.



3. Final crop estimates by the Ministry of Agriculture,
Irrigation and Food Security (MOAIFS) have put national
maize production at 1.69 million (metric) tons, 15
percent below the 1.98 million tons reported last year
and slightly below the ten year national maize production
average of 1.73 million tons. Results of a Food and
Agricultural Organization (FAO) also put the maize
harvest at 1.7 million tons. Annual consumption
requirements for maize are thought to be in the
neighborhood of 2 million tons. Rice production declined
25 percent from 88,000 tons last year to 66,000 tons this
year. Cassava production has increased from 1.74 million
tons to 2.5 million tons due to area expansion.



--------------------------


MALAWI VULNERABILITY ASSESSMENT COMMITTEE (VAC) RESULTS


--------------------------




4. The independent, multi-agency Vulnerability Assessment
Committee (VAC) report was completed late last month. The
VAC report estimates that between 1.34 million and 1.68
million people will require humanitarian food assistance
in Malawi between June 2004 and March 2005.



5. The Malawi VAC report presents two scenarios for
humanitarian food needs in Malawi, ranging from 56,030
tons (scenario 1) to 83,550 tons (scenario 2) in the 12
most affected zones. Scenario 1 assumes that food prices
will remain relatively constant, while scenario 2 assumes
that food prices rise 30 percent by end of the year. Post
believes that the more pessimistic scenario 2 is more
probable. WFP is gearing up to expand food distribution
through a well-managed NGO consortium, but the WFP food
pipeline remains severely constrained. WFP is making a
strong appeal for donor pledges for Malawi.



--------------------------



--------------------------


LACK OF PURCHASING POWER AND LIMITED MAIZE STOCKS
INCREASE FOOD NEEDS


--------------------------



--------------------------




6. Malawi faces a set of structural problems that mean a
significant portion of the population are vulnerable to
increasingly smaller shocks. This is especially true
during the "hungry season" when most households have run
out of maize and are dependent on the market. Reliable
maize trade links with Mozambique and Tanzania have
enhanced food security in Malawi, but only for those with
significant purchasing power.



7. Households in Malawi's Southern Region will need the
most food aid this year, with needs already emerging in
some districts (particularly Machinga, Phalombe, Nsanje
and Chikwawa districts). The majority of relief
assistance will be required during the hungry season
beginning in October 2004 until the next harvest in April


2005.



8. Given the improved methods used by the VAC assessment
this year, improved geographical targeting of food
assistance will be possible. For example, with current
VAC data, it will be possible to target assistance down
to the Extension Planning Area (EPA) level rather than
just the district level. Use of sorghum instead of maize
in food aid programs will also reduce the likelihood of
disrupting the important cross-border trade between
Southern Malawi and Northern Mozambique.



9. In the aftermath of the pre-election maize sell-off,
the Strategic Grain Reserve (SGR) silos are nearly empty.
Only some 7,000 MT of maize remains and most of this
maize is of poor quality and not fit for human
consumption. The European Union has committed to help
restock the SGR and is tendering for 28,000 tons. The
Government of Malawi has promised to replace the 30,000
tons that were sold from the SGR in breach of agreed-upon
procedures, but whether the Government will be able to do
so remains to be seen.



--------------------------



--------------------------


GOVERNMENT ACTIONS MAY CREATE DISINCENTIVES FOR
COMMERCIAL IMPORTS


--------------------------



--------------------------




10. In past years, the bulk of Malawi's maize deficit has
been met through formal and informal private sector
imports. The year's maize deficit is estimated by the FAO
to be 408,000 tons. Evidence from past years suggests
that the informal cross-border trade could bring as much
as 350,000 MT from Mozambique, Zambia and Tanzania this
season.



11. However, the volume of private sector trade is
dependent on the right price signals. That is, private
traders need profit opportunities and information about
likely Government of Malawi interventions in the maize
market. In past years, Government importation and sales
of maize at subsidized prices has discouraged the private
sector maize trade while doing little to assist the most
vulnerable populations.



12. Thus, recent reports that the Government of Malawi is
planning to import 160,000 tons of maize could damage
private sector incentives, actually reducing the total
maize available in Malawi. Government officials have been
tight-lipped about maize import plans. Furthermore, the
Government of Malawi has not made it clear whether the
maize sales will be continue at subsidized prices in
light of the conversion of ADMARC into a limited
liability company.



13. There is no indication that the Government of Malawi
is planning to make a disaster declaration in the coming
days. Yet, Post believes that such silence reflects the
current lack of leadership within the Ministry of
Agriculture rather than any firm belief that no
assistance is needed.



14. Post request: USAID's Food for Peace (FFP) office
has been working closely with Post to plan for the
upcoming hungry season. Current FFP plans include
diverting up to 5000 tons of food to Malawi. FFP
recognizes that this will be insufficient, but faces
tight FY 2004 budgets and high demand. As a result, Post
strongly urges AID/W to consider a total food allocation
to WFP/Malawi of 30,000 tons during the July 2004 to
April 2005 period. Sorghum would be more appropriate than
maize this year in Malawi. While the situation in Malawi
is not yet at crisis stage, relatively small price shocks
coupled with unmet humanitarian needs could quickly
trigger a crisis later this year.

RASPOLIC