Malawi’s agriculture sector gets a boost from the World Bank, Norway and GEF

WASHINGTON, June 24, 2008 – The World Bank Board of Executive Directors today approved US$37.80 million to the Malawi Government to support investments aimed at improving food security and sustainable agricultural growth.

The approved amount, to be provided through the Agricultural Development Programme Support Project (ADP-SP), consists of a US$32 million International Development Association (IDA) credit, and a US$5.8 million Global Environment Facility (GEF) grant. The Government of Norway will contribute an additional US$10 million, while the Malawi Government will put in an equivalent to US$2.3 million in kind. The total value of the ADP-SP is US$53.3 million over a five year period (2008-2013).

The ADP-SP will mainly focus on institutional development and capacity building in preparation for an agriculture sector wide approach (SWAp), and sustainable food security.

‘The Bank supports Government’s aspirations of enhancing agricultural growth as a linchpin for the country’s prosperity. We believe that through this project both agricultural productivity and food security will be improved, and that Malawi will be cushioned from the adverse impacts of the rising prices of agricultural commodities,’ says Timothy Gilbo, the World Bank Country Manager for Malawi

With agriculture as Malawi’s engine for economic growth, the first priority of the ADP-SP is to improve overall governance of the agriculture sector by building technical, managerial and administrative capacities in the Ministry of Agriculture and Food Security. Strengthened capacity is important for the Ministry to effectively implement the Agriculture Development Program (ADP) being prepared by the Ministry.

The objective of the ADP is to improve food security and generate agricultural growth through increased productivity of food and cash crops, while ensuring sustainable use of natural resources. Within three years, the ADP is expected to evolve into an agriculture SWAp, which will coordinate donor support to the agriculture sector in Malawi.

‘The ADP-SP represents the first coordinated donor commitment to the Government’s Agricultural Development Programme, and provides a valuable foundation to build from. The harmonization of donor funding in support of the ADP is essential for achieving our target 6% growth in the agricultural sector,’ says Andrew Daudi, Malawi’s Principal Secretary for Agriculture and Food Security.

The second priority for the ADP-SP is sustainable improvement of national and household food security. This will be achieved through supporting smallholder farmers to improve maize productivity growth, sustainable land management, and strengthening market based agricultural risk management strategies. Activities to improve maize productivity will include helping farmers with choosing right maize varieties, including drought resistant ones; efficient use of fertilizer to produce more per unit of fertilizer applied; and reducing post-harvest losses. Sustainable land and rainwater management will include assisting farmers testand adopt conservation farming practices.

The ADP-SP will also support national efforts to stabilize food supplies through the application of several market based risk management initiatives including micro weather insurance, macro weather insurance, price hedging and warehouse receipts.

‘The risk management toolbox being supported through the ADP-SP aims at insuring the country from maize supply deficits and reduces the country’s vulnerability to food price variability. This will encourage more farmers to shift from a preoccupation with food security toward the pursuit of commercial income growth,’ says David Rohrbach, the World Bank’s Task Team Leader for the ADP-SP.

The Ministry of Agriculture and Food Security will be responsible for the implementation of the ADP-SP. About 200,000 rural smallholders, or about 10% of the total farming households of the country, are expected to benefit directly from the various activities of the ADP-SP. Agriculture provides a livelihood for 85 percent of the population and smallholders contribute about three-quarters of agricultural production. Malawi’s economy remains agro-based with agriculture contributing 38 percent of gross domestic product (GDP).

The GEF unites 178 countries in partnership with international institutions, non-governmental organizations (NGOs), and the private sector to address global environmental issues while supporting national sustainable development initiatives. Today the GEF is the largest funder of projects to improve the global environment. An independent financial organization, the GEF provides grants for projects related to biodiversity, climate change, international waters, land degradation, the ozone layer, and persistent organic pollutants. Since 1991, GEF has achieved a strong track record with developing countries and countries with economies in transition, providing US$7.6 billion in grants and leveraging US$30.6 billion in co-financing for over 2,000 projects in over 165 countries.