There are predictions of potential famine in the air. In areas unaffected by Sidr, farmers are protesting fertilizer pricing and shortage almost weekly (most recently in Jamalpur) in desperate violation of SOE laws. At times they resort to violence against government offices and representatives in their localities, barricade highways etc. Fertilizer pricing and provision has been a consistent problem over the past two decades.
The current administration claims that we have enough fertilizer but distribution networks are the main problem. The issue is not that simple. Newspapers often report on how fertilizer is smuggled out of the country to Burma and India. There are allegations of rampant profiteering and mismanagement. The bottom line is that the farmers are not getting what they need. There is no time to play the blame game this year. We need to extract every last bit of agricultural output from the next crop season if we are to avert food shortages. In fact, the areas unaffected by Sidr will have to produce bumper crops to cushion the devastating losses in approximately one third of the country. In light of Bangladesh’s current situation, today’s NYT article on Malawi is particularly edifying, not just for this year, but for years to come.
Excerpts:
Malawi hovered for years at the brink of famine. After a disastrous corn harvest in 2005, almost five million of its 13 million people needed emergency food aid. But this year, a nation that has perennially extended a begging bowl to the world is instead feeding its hungry neighbors. It is selling more corn to the World Food Program of the United Nations than any other country in southern Africa and is exporting hundreds of thousands of tons of corn to Zimbabwe.
In Malawi itself, the prevalence of acute child hunger has fallen sharply. In October, the United Nations Children’s Fund sent three tons of powdered milk, stockpiled here to treat severely malnourished children, to Uganda instead. “We will not be able to use it!” Juan Ortiz-Iruri, Unicef’s deputy representative in Malawi, said jubilantly.Farmers explain Malawi’s extraordinary turnaround — one with broad implications for hunger-fighting methods across Africa — with one word: fertilizer.
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…..
Malawi, an overwhelmingly rural nation about the size of Pennsylvania, is an extreme example of what happens when those things are missing. As its population has grown and inherited landholdings have shrunk, impoverished farmers have planted every inch of ground. Desperate to feed their families, they could not afford to let their land lie fallow or to fertilize it. Over time, their depleted plots yielded less food and the farmers fell deeper into poverty.
Malawi’s leaders have long favored fertilizer subsidies, but they reluctantly acceded to donor prescriptions, often shaped by foreign-aid fashions in Washington, that featured a faith in private markets and an antipathy to government intervention. In the 1980s and again in the 1990s, the World Bank pushed Malawi to eliminate fertilizer subsidies entirely. Its theory both times was that Malawi’s farmers should shift to growing cash crops for export and use the foreign exchange earnings to import food, according to Jane Harrigan, an economist at the University of London.
In a withering evaluation of the World Bank’s record on African agriculture, the bank’s own internal watchdog concluded in October not only that the removal of subsidies had led to exorbitant fertilizer prices in African countries, but that the bank itself had often failed to recognize that improving Africa’s declining soil quality was essential to lifting food production.“The donors took away the role of the government and the disasters mounted,” said Jeffrey Sachs, a Columbia University economist who lobbied Britain and the World Bank on behalf of Malawi’s fertilizer program and who has championed the idea that wealthy countries should invest in fertilizer and seed for Africa’s farmers.
You can read the rest of the article at: http://www.nytimes.com/2007/12/02/world/africa/02malawi.html?em&ex=1196658000&en=daf2c73a7680b282&ei=5087%0A

3 comments
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December 2, 2007 at 7:41 am
DhakaShohor
Leela,
Thank you for taking up this subject, and not a moment too soon!
I really don’t know how relevant the Malawi experience is to our current predicament though. According to Naya Diganta (perhaps not the best of sources, any pointers to better ones would be appreciated):
cost of producing urea fertilizers = tk 7,000/mt
GoB selling at tk 4,800/mt
cost of importing fertilizers (not specified what kind) = tk 25,000/mt
GoB selling at tk 4,800/mt
I think the subsidies are pretty clear right there. The problem - from the admittedly little I know - is in the new distribution system that they have tried to implement. From newspaper reports it seems that such a system has no room for extending any credit to farmers directly from the fertilizer sellers, as used to be the case.
That is what I’m getting from the newspaper reports. And this government’s opacity isn’t helping!
Btw, the Naya Diganta report from which I got those figures also talks about some people arrested for smuggling fertilizer INTO Bangladesh! Typo? Have I misread? I was hoping it would provide Saif with more fodder for another arbitrage post!
You can find the article and others in my post on the media coverage of the (potential?) fertilizer crisis:
http://dhakashohor.blogspot.com/2007/12/fertiliser-media-coverage-and-advisor.html
December 2, 2007 at 8:24 pm
tacit
That is illuminating indeed. I have always wondered about this apparent anamoly, if farmers are willing to pay for the fertilizers, why aren’t they getting it? Subsidized fertilizers, that could be interesting.
However, then where do we stop? Why not provide subsidized electricity as well? And so on…
Does anyone know what’s our fertilizer need per year, and out of that how much we produce annually and how much we have to import?
December 3, 2007 at 5:06 pm
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