wikileaks ico  Home papers ico  Cables mirror and Afghan War Diary privacy policy Privacy
Identifier
Created
Classification
Origin
05LILONGWE143
2005-02-15 14:54:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Lilongwe
Cable title:  

MALAWI CROP ESTIMATE: SHORTAGE COMING

Tags:   KMCA  EAGR  ECON  EAID  PREL  MI 
pdf how-to read a cable
This record is a partial extract of the original cable. The full text of the original cable is not available.
						UNCLAS SECTION 01 OF 02 LILONGWE 000143 

SIPDIS

SENSITIVE

STATE FOR AF/S ADRIENNE GALANEK AND BRUCE NEULING
TREASURY FOR INTERNATIONAL AFFAIRS / AFRICA / LUKAS KOHLER

E.O. 12958: N/A
TAGS: KMCA EAGR ECON EAID PREL MI
SUBJECT: MALAWI CROP ESTIMATE: SHORTAGE COMING

REF: A. 2004 LILONGWE 1089

B. 2004 LILONGWE 1164

-------
SUMMARY
-------



1. (U) Malawi's first crop estimates show a shortage of over
20 percent in maize, due mainly to late distribution of
fertilizer and a developing dry spell. Grain stocks are
adequate for now, though the hunger season is now reaching
its peak. If the crop is seriously impaired, it may begin to
impact the budget by mid-year, and a poor crop will likely
weaken political support for ongoing reforms. End summary.




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


EARLY REPORTS: SHORT ON MAIZE


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





2. (U) Malawi's Ministry of Agriculture recently released its
first-round crop estimates for 2005, predicting annual
production of 1.7 million metric (MT) tons of maize, against
a requirement of 2.2 million MT. While the anticipated
production is average for the past ten years, a strong start
to the rainy season toward the end of 2004 had led GOM
officieals earlier to hope for a better-than-average crop.
Since November, though, it has become clear that delays in
the distribution of free targeted input packages (seed and
fertilizer) have combined with a shortage of commercial
fertilizer to constrain production (see reftels).



3. (U) Other crops are also showing some decline in
production. These include burley tobacco, Malawi's chief
export, and sweet potatoes, a secondary food staple.
Cassava, the second-largest food crop after maize, is
expected to increase slightly at 2.6 million MT. Cotton,
pulses, chillies, and groundnuts are all expected to register
sizable increases over last year, owing mainly to increases
in the acreage planted with these crops.



4. (U) The early estimates may be in for a downward revision
as a dry spell that began in late January continues beyond
its usual period. Because Malawi has very limited
irrigation, virtually all food production depends on rainfall.




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


ENOUGH FOOD FOR NOW


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





5. (U) For now, the food supply in the country appears to be
adequate. The GOM recently halted its planned purchase of
70,000 MT of maize intended for the commercial market, even
though only 30,000 MT had been delivered. While the
Government justified the move by citing suppliers' failure to
deliver on schedule, it has also said that no further
intervention is necessary. (NOTE: Donors have pressured the
Government to limit its intervention in the commercial maize
market. GOM interventions have in the past disrupted market
mechanisms to the point of causing widespread food shortages.
End note.)



6. (U) While there is enough food in the country, not
everyone can afford to buy it, and as subsistence farmers
reach the end of their annual stores, hunger is beginning to
spread. The need for humanitarian food relief this season is
estimated at 56-83,000 MT, depending on how high food prices
rise. As usual, the problem is most severe in the heavily
populated southern districts.




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


COMMENT: POOR CROP MAY HOBBLE GOVERNMENT


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





7. (SBU) The continued lack of food security in Malawi, even
in a year of relatively good rainfall, remains a wild card
for the Government's efforts at reform. Up to now, the new
administration has done a fairly good job of keeping a lid on
spending. Lower deficits have enabled the GOM to service a
massive load of inherited domestic debt, keep inflation to
low double digits (currently 12-13 percent), and support the
currency despite heavy foreign exchange pressure. While one
hopes that the country will be in a stronger fiscal position
by the next hunger season in late 2005, a poor crop in
March-April 2005 could impact the budget by mid-year as the
GOM tries to build its grain reserves with imports. None of
this will make it easier for the GOM to channel resources to
reform and development, where it needs to make visible
progress. Perhaps more importantly, the political fallout
from a poor crop could hit as Mutharika's honeymoon ends and
the country settles in to the hard work of real reform.
GILMOUR