Officials from ministry of Agriculture have told a parliamentary committee that the commodity exchange deal which the government signed with a Romanian company has nothing to do with Affordable Input Program (AIP).
Ministry of Agriculture Principal Secretary Dickxie Kampani told the Parliamentary Committee on Agriculture on Tuesday in Lilongwe that the East Bridge deal which will see the company supplying 300 000 metric tons of fertilizer in exchange of assorted farm produce is for commercial fertiliser to be sold by Smallholder Farmers Fertiliser Revolving Fund (SFFRFM).
Ministry of Agriculture Principal Secretary for technical services Medrina Mloza Banda defended the barter trade deal between Malawi Government and East Bridge, saying it is the surest way of ensuring availability of fertiliser in the country but also stabilising fertiliser prices.
She said the deal will see farmers accessing cheaper fertiliser.
Mloza Banda said the deal will ease pressure on forex as the country is struggling to generate forex to import fertiliser and other products.
Mloza Banda went further to say that the company is willing to be paid in kwachas in the event that government does not aggregate enough produce to settle the debt.
She has emphasised that the good part is that the country will settle the debt a year after the fertiliser has been supplied, which means East Bridge is pre-financing the fertiliser.
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Mloza Banda added that due diligence was done and it was established that the company has production lines with manufacturers for fertiliser.
Ministry of Agriculture AIP coordinator Justin Kagona told the committee that the AIP is on course.
He said the government expects the 2023/2024 program to be implemented successfully as the Ministry has started procurement processes much earlier.
Kagona said challenges associated with transportation, retail points have also been looked into.
He said the Ministry decided to start procurement of fertiliser earlier to benefit from low prices on the market.
He also said the government has increased transport rates to attract more transporters and will ensure that there are two retail points per constituency as well as mobile vending to ensure that people have easy access to fertiliser.
Kagona said the country already has about 87 000 metric tonnes of fertiliser which should see the program commencing without much challenges.
However, he has said reduction of the AIP budget from K117 billion to K109 billion and shortage of forex in the country will have an impact on the program.
