Just thought this was an interesting story…
Over the past 20 years, the World Bank and some rich nations Malawi depends on for aid have periodically pressed this small, landlocked country to adhere to free market policies and cut back or eliminate fertilizer subsidies, even as the United States and Europe extensively subsidized their own farmers. But after the 2005 harvest, the worst in a decade, Bingu wa Mutharika, Malawi’s newly elected president, decided to follow what the West practiced, not what it preached.
Stung by the humiliation of pleading for charity, he led the way to reinstating and deepening fertilizer subsidies despite a skeptical reception from the United States and Britain. Malawi’s soil, like that across sub-Saharan Africa, is gravely depleted, and many, if not most, of its farmers are too poor to afford fertilizer at market prices.
The country’s successful use of subsidies is contributing to a broader reappraisal of the crucial role of agriculture in alleviating poverty in Africa and the pivotal importance of public investments in the basics of a farm economy: fertilizer, improved seed, farmer education, credit and agricultural research.
read more at NY Times
I am not sure how successful the subsidies will be, but I am hopeful, of course. The article does bring up some questions about why the US and world financial institutions are more interested in sending aid and pushing free market policies that include cut backs or elimination of fertilizer subsidies then supporting a subsidy program that at least in the early stages is making great strides. The NY Times article stated, “The United States, which has shipped $147 million worth of American food to Malawi as emergency relief since 2002, but only $53 million to help Malawi grow its own food, has not provided any financial support for the subsidy program, except for helping pay for the evaluation of it.” The US has spent more money on a non-sustainable model of aid and emergency relief, rather than on farmer education and subsidies. Farmer education and subsidies have the potential to make Malawi farmers if not Malawi itself less dependent on suggestions/mandates from IMF an the WB. While the subsidy is not a panacea, at some level it speaks to the necessity of global South nations to site how the economic policy they are directed to implement is the very policy that has been consistently unsuccessful. I appreciate the risk Malawi’s new leader has taken to forge a new path–at least in this area.