US embassy cable - 04LILONGWE939

UNCLAS SECTION 01 OF 03 LILONGWE 000939 
 
SIPDIS 
 
AIDAC 
 
USAID FOR DCHA/FFP LANDIS, WELLER, MUTAMBA, 
SKORIC, PETERSEN AND BERGMAN 
USAID FOR DCHA/OFDA BORNS, MARX, PRATT 
AND KHANDAGLE 
USAID FOR AFR/DP WARREN, AND KNEPP 
USAID FOR AFR/SD WHELAN 
USAID FOR AFR/SA COOKE, HAGELMAN, LOKEN 
DEPT FOR AF/S, INR/GGI, PM/ISP 
NCS FOR MELINE 
NAIROBI FOR PUTMAN, ESTES, AND DEPREZ 
MAPUTO FOR BLISS AND POLAND 
LUANDA FOR LYVERS 
HARARE FOR ATWOOD AND REED 
PRETORIA FOR DISKIN, HALE, SINK, AND 
REYNOLDS 
GABORONE FOR KHUPE 
ROME FOR FODAG 
 
E.O. 12958: N/A 
TAGS: EAID, EAGR, MI, Agriculture/Food Security, Development 
SUBJECT: SITREP 30: GOVERNMENT TAKES STEPS 
TO ADDRESS HUMANITARIAN FOOD NEEDS IN MALAWI 
 
 
1.SUMMARY: A key GOM-donor meeting, chaired by the 
President of Malawi, was held on Saturday September 
18th. Although the GOM will likely not declare a disaster 
this year, an urgent appeal was made for humanitarian 
assistance for the WFP program. The GOM re-established 
the government-led "Joint Task Force" coordination 
mechanism that was employed so successfully during the 
2002 food crisis. The GOM also reiterated its commitment 
to purchase and import 70,000 tons of maize from 
neighboring countries despite indications that the 
private sector has the capacity to handle commercial 
imports. The GOM is planning to provide free and/or 
subsidized fertilizer and seeds to most farmers, but the 
details have yet to be worked out. Private sector input 
dealers are concerned that delays in defining the scope 
and operation of the government scheme could impair the 
country's ability to be ready for the upcoming planting 
season. Despite this new leadership, the World Food 
Program emergency operations for the January-April 2005 
period remain under-resourced. 
 
BACKGROUND 
 
2.The President of Malawi Bingu wa Mutharika called an 
emergency meeting to discuss growing humanitarian food 
needs in Malawi and to map out the way forward in 
the months to come. This meeting follows rising donor 
concerns about lack of GOM leadership on the growing 
humanitarian food needs this year. The meeting was 
well attended by Government Ministers, Donors and senior 
government staff. 
 
3.The president explained the meeting was part of a 
consultative effort between GOM and its development 
partners. The president said the country is facing a 
food shortfall and made an urgent appeal to donors for 
humanitarian food assistance for the coming lean months 
(October, 2004 to April, 2005). A state of emergency was 
not declared. The GOM stated that it believes the 
country's humanitarian food needs can be met without such 
a declaration. 
 
4.At the meeting, the President of Malawi announced the 
revival of the Food Security Joint Task Force to 
coordinate humanitarian food needs this coming season. 
The Joint Task Force ensured enhanced coordination 
between GOM, donors, civic society and NGOs during the 
last food crisis in 2001/02 and is credited with improved 
humanitarian response that averted hunger during the food 
crisis. 
 
5.The President of Malawi will personally chair the Joint 
Task Force meetings in order to issue the attention it 
deserves. In addition, the humanitarian food needs 
subcommittee of the Joint Task Force has been revived. 
 
6.Donor welcomes the leadership, efforts but observed 
that, without declaration of state of emergency, some 
donors may not be able to mobilize humanitarian food 
resources. 
 
MALAWI HUMANITARIAN FOOD NEEDS 
 
7.According to calculations by FAO/WFP Crop and Food 
Suppply Assessment Mission (CFSAM), there is a possible 
deficit of 600,000 MT. If the contributions from 
cassava and sweetpotatoes are factored in, the food 
deficit decreases to 408,000 MT. This will be met through 
a combination of commercial imports (formal and informal) 
from neighbouring countries principally Zambia and 
Mozambique and humanitarian food assistance. 
 
8.Maize imports are primarily by either private sector 
importers responding to market opportunities and GOM 
interventions in the commercial maize sector. Informal 
private sector maize traders play a significant role 
in maize imports as recent monitoring by USAID-supported 
FEWSNET has revealed. 
 
9.In the month of August alone, close to 13,000 MT of 
maize moved into Malawi by informal traders, largely on 
bicycles and small trucks. Imports will likely increase 
as demand increases in the coming months (Note: These 
import numbers sharply contrast the earlier 2,000 MT per 
month estimate, GOM officials that are often too quick to 
dismiss the significant role private traders play in 
maize imports.) 
 
10.Using the most likely scenario for Malawi by the 
Malawi Vulnerability Assessment Committee (MVAC), 
humanitarian food assistance news are pegged at 86,000 MT 
for some 1.6 million people especially in the southern 
part of the country. 
 
11.Humanitarian food assistance is likely to be met 
through food aid programs managed by WFP and heavily 
supported by the USG. The WFP/Malawi emergency food 
program for the upcoming hungry season remains severely 
under resourced.  WFP does not have enough food to 
maintain food aid deliveries during the critical January- 
March 2005 period. WFP indicates it needs 41,000 MT 
between January and March 2005. WFP has made an urgent 
appeal to donors (including USAID) for immediate 
assistance. 
 
12.While the situation in Malawi is not yet a crisis, 
there is a clear food aid need this season. Post has 
requested USAID/Washington commit further resources to 
the WFP/Malawi program from FY 2005 budget resources. 
Post strongly urges FFP to consider a total food 
allocation to WFP/Malawi of 30,000 tons during the 
October 2004 to March 2005 period given the food 
situation on the ground. Sorghum would be more 
appropriate than maize this year in Malawi. 
 
STRATEGIC GRAIN RESERVE TO BE FILLED BY OCTOBER 
 
13.The Strategic Grain Reserve (SGR) is set to be 
replenished to the agreed level of 60,000 MT by October. 
Of this 28,000 MT is a contribution from the EU while GOM 
will replenish 32,000 MT it "borrowed" from the SGR last 
season. Tenders went out and deliveries have started. So 
far, 10,000 MT has been received by National Food Reserve 
Agency, NFRA. GOM says 60,000 MT of maize will be in by 
end October, 2004. 
 
14.In light of the anticipated WFP/Malawi pipeline break 
in October, GOM and the donors have agreed that WFP can 
access the SGR maize now, with replenishment later in the 
season. According to established SGR rules, the SGR 
cannot release SGR maize without donor or GOM pledges of 
replenishment later. So far, DFID and EU have pledged 
resources to replenish the SGR should WFP use SGR maize. 
The technical details of this arrangement are yet to be 
worked out. 
 
GOM TO IMPORT 70,000 MT COMMERCIAL MAIZE 
 
15.GOM is going ahead with the importation of 70,000 MT 
commercial maize for sale during the lean period despite 
donors concerns about the importation. GOM has budgeted 
MK 1.5 billion (13.8 million USD) for the exercise and 
the maize will be sourced locally and from neighbouring 
countries of Zambia and Mozambique. 
 
16.Donor concerns are three fold:(1) this decision will 
put pressure on GOM budget; (2) depending on price, it 
may disrupt the private sector maize trade, concentrate 
in meeting humanitarian needs and (3) subsidized maize 
may be diverted by local elites, especially if ADMARC, 
the government parastatal, is used to distribute 
subsidized maize to the population. 
 
17.GOM maintains that the 70,000 MT commercial maize is a 
contigency in case of private sector failure to supply 
maize at a critical time. At the September 18 meeting GOM 
commited to only intervening in the maize market in case 
of commercial maize shortage during the lean months and 
GOM has given the donors commitment that it will sell the 
maize to recover costs (e.g. no subsidy). 
 
18.Much mistrust exists between GOM and private sector 
maize trade. The private sector is uncertain as to 
government intentions while the GOM is unsure of the 
capacity of the private sector to meet maize shortfalls. 
 
19.Recently,USAID/Malawi,with valuable assistance from 
the REDSO-funded "RATES" activity, convened a meeting 
between GOM officials and private sector maize players to 
foster dialogue and communication between the GOM and 
private sector. The meeting went well and the two sides 
have agreed to meet again. Mission hopes this marks the 
beginning of a real dialogue between the GOM and private 
sector. 
 
RASPOLIC