Inadequate funding for humanitarian assistance programs could result in Crisis and Emergency-level food security outcomes in 2012/13

National Overview

A poor start of season, prolonged dry spells, erratic rainfall, and poor access to agricultural inputs have resulted in below-average cereal and crop production in Malawi for the 2011/12 agricultural season. Third-round crop estimates by the Ministry of Agriculture and Food Security (MoAFS) confirmed that there is a seven percent decrease in staple maize production. National maize production for the current agricultural season is estimated at 3,623 million metric tons (MMT), compared to the 2010/11 production levels of 3,900 MMT and the five-year average of approximately 3,600 MMT.  In comparison to other parts of the country, southern Malawi maize production is estimated at 14 percent below the five-year average, with production deficits of 20-30 percent in some districts. Areas in southern Malawi had significant crop yield reductions and in some cases total crop failure. The southern region has also experienced several consecutive years of poor harvests due to weather-related shocks, which have left poor households with little to no food reserves. This year Malawi expects a national maize production surplus of approximately 500,000 MT from the traditional surplus-producing central and northern regions, but in spite of that, many households in deficit areas in the south will again face significant food consumption gaps. This year the Malawi Vulnerability Assessment Committee (MVAC) has already identified 1.63 million people in 15 districts who are in need of emergency assistance during the 2012/13 consumption year. As of the end of August, ADMARC, a government agency involved in buying and selling agricultural products including maize, has nearly depleted maize stocks in southern markets. In the absence of ADMARC’s fixed selling price of MWK 60/kg, the only available maize in local markets in the south is from private traders selling maize from central Malawi at higher prices.

In recent months, consumer purchasing power has rapidly declined as a result of the devaluation and depreciation of the local currency in May. As the value of the local currency has dropped from MWK 167/1 USD to MWK 280/1 USD, food commodity prices and transportation costs have increased. In comparison to July 2011 prices, July 2012 retail maize prices in southern Malawi have doubled. Current prices in southern Malawi range from MWK 52/kg in Mwanza market to MWK 79/kg in Bvumbwe market. Average prices in the southern region (MWK64/kg) are the highest compared with the central (MWK 51/kg) and northern (MWK 46/kg) regions.

In order to assess the impact of high maize prices, a poor cropping season and broader macroeconomic concerns, FEWS NET developed a more focused analysis for three livelihood zones in the southern region in April. This analysis used Household Economy Approach methods to compare projected 2012/13 access to food and income to baseline levels (2003). The resulting May Malawi Food Security Outlook for the 2012/13 consumption year suggested that poor households in these three livelihood zones will face great difficulty in meeting essential food needs from July 2012 through March 2013. Using this same approach, the FEWS NET analysis was updated in August 2012 using recent data from the MoAFS 3^rd round crop estimations and up-to-date maize prices. The analysis also included poor and middle income households in eight livelihood zones located in the southern and central region: MW05 Lower Shire livelihood zone (LSH), MW06 Middle Shire livelihood zone (MSH) and MW04 Lake Chilwa-Phalombe Plain livelihood zone (PHA), MW12 Phirilongwe Hills (PIR), MW13 Rift Valley Escarpment (RFT), MW14 Shire Highlands (SHI), MW15 Southern Lakeshore (SLA), MW16 Thyolo Mulunje Tea Estates (TMT).

Past experience has shown that the government has had enough humanitarian maize, but lacks the resources to pay for transporting and distributing the maize to rural areas where people require assistance. Since July, response planning for the affected populations has resulted in only partially secured funding through in-kind and financial support from the Government of Malawi (GoM), USAID/FFP and UKAID/DFID. Through the World Bank Crisis Response Window (CRW) mechanism about 300,000 poor and vulnerable households will receive cash for work in the coming months. Additionally, partners have invested in a market analysis and urban assessment in order to better guide the Department of Disaster Management Affairs (DODMA) and WFP in developing a response plan that will start in August. The length of humanitarian assistance coverage for the affected populations is still uncertain, however, and current available assistance will likely be provided up until December 2012.

Important assumptions for southern Malawi during the scenario period include:

• Maize: Availability of locally produced maize will remain very limited through March 2013. Prices will continue to increase as commodities flow steadily from northern and central surplus areas to markets in the southern deficit areas. The maize export ban will be in place throughout the remainder of the consumption year. There will be enough maize stocks in the country in the NFRA and with private grain traders, though ADMARC maize stocks in southern Malawi markets are running out and adequate restock may not be possible during the lean period.
• Rice:  Rice incomes are typically used for purchasing maize. Availability of rice will be lower than usual. Rice is currently available for consumption from own production but is expected to run out by September. Rice prices will remain high because of local scarcity.  In urban areas rice will be imported from South Africa but it is unlikely that it will be available in rural areas. 
• Groundnuts/Pulses: Groundnut and pulses production was significantly lower than normal. Prices are double what they were last year. 
• Cotton: Cotton production for poor households was lower than expected due to limited access to chemicals.  Despite higher than normal third round crop production estimates at national level,  cotton producers from poor households experienced production losses due to poor adaptability of the newly subsidized seed to hotter conditions and a shortage of cotton pesticides due to the unavailability of foreign currency during the production season.  It is assumed that income from cotton sales has been used up to purchase expensive staple maize. Cotton sales typically take place in Q1 (April-June) and Q2 (July-September), and households will have depleted cotton incomes as they enter Q3 (October-December).
• Cassava: Typically, cassava is not a major food crop but it is consumed when other staple foods are not available during food deficit years.  Dry cassava availability will be normal but only in very few areas in southern Malawi.  Despite dry cassava availability, poor households will still need to purchase maize in order to mix with the cassava for consumption.
• Sweet Potato: Sweet potato production availability will be much less, thereby high prices are expected.  Sweet potato availability is limited because it is difficult to store and tends to be consumed soon after harvest mainly in June/July.  Beyond July, sweet potatoes will only be available in wetland areas, which are very limited in southern Malawi.
• Cross Border Trade: The GoM maize export ban will likely continue to be in place for the rest of the consumption year. Imports from Mozambique cross border trade into southern Malawi are expected to either remain the same or even drop during this consumption period, while exports from the Songwe and Mbirima borders in northern Malawi may follow the same pattern.
• Ganyu (agricultural labor): Seasonal/normal patterns of agricultural labor are expected. The 2012/13 start of season should provide normal levels of ganyu-agriculture opportunities and wages will remain at current levels. Since in some areas households from the middle income group may be using unsustainable coping strategies, they may not be able to fully invest in labor.
• Assistance: As of August, food assistance distribution has begun in the districts of Nsanje, Machinga and Chikhwawa. Adequate funding has been identified to cover the humanitarian response from August until December 2012, but funding for assistance from January to March 2013 is yet to be confirmed. We assume that this assistance is sufficient to meet the survival needs of MVAC identified beneficiaries through December, though livelihoods protection needs will remain.

Based on these assumptions, two scenarios were developed for the updated analysis. In both scenarios FEWS NET assumes that the current maize export ban will remain, a maize surplus of approximately 500,000 MT will be available at the national level, and that surpluses in some surrounding countries will be readily available for import. For the most-likely scenario, it is assumed that no additional market shocks or further currency depreciation will take place during the scenario period, but that maize prices will increase seasonably over the next three quarters until March 2013. Over the course of the consumption year, retail maize prices in the south are therefore expected to increase between 9 and 19 percent between August 2012 and March 2013, peaking at  MWK 58/kg – MWK 83/kg  in Quarter 4 (January-March 2013) due to seasonal effects.

In addition to seasonal maize price increases, the worst-case scenario assumes that rural inflation and the remaining effects of the May 2012 currency depreciation will impact fuel prices, further increasing transport costs. In this scenario, over the course of the consumption year, retail maize prices in the south are expected to increase by 20 percent between August 2012 and March 2013, peaking at MWK 99/kg - MWK 72/kg in Q4 due to a combination of seasonal, inflationary, and past depreciation effects. Figure 2 represents the calculated most-likely (ML) and worst-case (WC) maize price projections for each of the eight livelihood zones. 

Lower Shire (LSH) Livelihood Zone

In the Lower Shire Livelihood Zone the most important components of the food economy are food crops, ganyu labor, cash crops, and livestock. Cross-border trade between Malawi and Mozambique contributes some food, especially to middle and better off households. The zone has two types of cultivatable land: upland and wetland. Only 10 percent of the households in the livelihood zone have access to irrigated land where substantial farming takes place in the wetlands bordering the Shire River. The main food crops grown in the upland fields are maize, sorghum, and millet, while in the wetlands maize, rice, tomatoes, vegetables, cowpeas and pigeon peas are grown. Crops sold include maize, cotton, rice, sugarcane and sweet potatoes. Livestock sales are the largest source of income for the better off wealth group. In this livelihood zone ganyu is the most important source of income among the poor.

Currently most households are consuming maize purchased from local markets at prices that are double that of last year.  Maize and other cereals are in short supply locally and are being imported from the central region about 700 km away. The average maize price in the LSH was MWK 70.87 in July, which is double last year’s price. Mozambique remains one of the most important sources of staple maize into the LSH; however, there is some reported scarcity of the staple crop in the areas along the Mozambique border. Poor households are mainly harvesting water lilies for income along the Shire River, though they are at high risk of crocodile attacks. Normally, poor households depend on middle and better off households for ganyu opportunities, which were limited this year because middle and better off households received little income from cotton sales.  

Prior to the start of humanitarian assistance in August, poor households were consuming one meal per day instead of the normal three meals.  Some households were reportedly consuming non-traditional greens without any starch, implying that meals lacked dietary diversity and were deficient in calorie content.  Some poor households were also selling firewood collected from protected wild/forest reserves in order to get some cash to buy food.

FEWS NET has projected that it is likely that poor households in the LSH will experience a food deficit of 18 percent during the consumption year.  In the worst-case scenario, poor households will have a food deficit of 22 percent of annual food needs. In both scenarios, only poor households are affected in this area.  Middle and better off households are expected to meet all their food needs for the whole year.

FEWS NET’s projected analysis for the August 2012 – March 2013 period is based on the following assumptions (in addition to the national level assumptions listed above):

• Livestock: Chicken sale prices are low. Goats among affected households have been depleted and households cannot access earnings from goat sales for food purchases.

Crop production levels in proportion to baseline production

Humanitarian assistance started in August, however due to current funding limitations for the humanitarian response plan, these activities will likely finish in December even though food assistance needs will continue on until March 2013. The LSH will face Stressed (IPC Phase 2) food insecurity conditions, with assistance present, between August and December. Due to uncertainty around funding for humanitarian response programming after December, poor households are expected to face Emergency (IPC Phase 4) food insecurity conditions between January and March 2013. 

Middle Shire (MSH) Livelihood Zone

The Middle Shire livelihood zone includes parts of Mwanza, Neno, Balaka, Blantyre, Machinga, and Zomba districts. The zone has a relatively dry climate and the annual precipitation ranges from 200-1000 mm. The zone is characterized by near-subsistence farming, with fishing on a small-scale amongst those living close to the Shire River. Since this is a dry area, crop production is relatively low and households that live along the river do some irrigation farming. Some poor and middle wealth group households depend on ganyu employment for most of their income.  Cotton, rice, and some fish sales are important sources of income in MSH. Currently poor households are consuming one meal per day and some poor households are selling firewood collected from protected wild/forest reserves in order to get some cash to buy food.

FEWS NET has projected that it is most likely that poor households will experience a food deficit of 20 percent of annual food needs.  In the worst-case scenario poor households will have a food deficit of 24 percent of annual food needs and some middle wealth group households will experience a 4 percent deficit of their annual food needs.

FEWS NET’s projected analysis for the August 2012 – March 2013 period is based on the following assumptions (in addition to the national level assumptions listed above):

• Cassava: Cassava is a minor crop in this zone. Household access to this food will be limited.
• Livestock: MSH households have depleted their stocks of goats as a way of coping through three to four consecutive low production seasons. Households will receive a small amount of income from chicken sales but this income is expected to be too low to provide funds for food purchases.

Crop production levels in proportion to baseline production

As of August, humanitarian assistance has only started in Machinga district.  However, humanitarian assistance is planned to start in September in Balaka, Blantyre, Neno and Mwanza.  With very high maize prices and more than 20 percent of the people in the livelihood zone depending on humanitarian food assistance, MSH will likely experience Stressed (IPC Phase 2) food insecurity between August and December 2012. Due to current funding uncertainties, if humanitarian assistance ends in December, FEWS NET has projected that the food security situation will worsen among poor and middle wealth groups and they could experience Emergency (IPC Phase 4) levels of food insecurity between January and March 2013.

Lake Chilwa-Phalombe Plain (PHA) Livelihood Zone

This livelihood zone includes areas surrounding Lake Chilwa and extends into the highland plain of Phalombe. It covers part of Machinga, Zomba, and part of Thyolo, part of Mulanje, Phalombe and part of Chiradzulu districts. The zone stretches from north of Lake Chiuta down to northeast of Thyolo and Mulanje. The main features of the zone are Lake Chilwa and the surrounding flat wetlands. Fishing and wetland cropping are located in areas surrounding the lake basin. Fish populations are said to be dwindling due to over-fishing and environmental degradation. This area receives an annual rainfall of about 700-1000 mm, and crop production is relatively poor, especially on the Lake Chilwa basin because of poor quality sandy soils. The main crops that are grown for food are maize, cassava, sorghum and rice. Generally, most of the households in the zone are subsistence farmers who sell part of their produce in order to access other basic needs. Livestock (mainly goats and chickens) production is very insignificant as a source of food but it serves as a reliable source of cash during difficult times, mainly for the middle and better-off.

Currently poor households are depending on fishing in areas around Lake Chilwa. In recent years catches have dwindled.  Most poor households have been trekking into northern Mozambique to work for ganyu labor where they are paid in-kind with maize.  Compared to last year, Informal cross border trade increased 215 percent to reach 3063 MT between April and July 2012.

FEWS NET’s projected analysis for the August 2012 – March 2013 period is based on the following assumptions (in addition to the national level assumptions listed above):

• Livestock: Chicken holdings, which were at 80 percent of normal, will provide 27 percent of income requirements for poor households. Goats which were at normal production levels will provide 43 percent of income needs for middle households. Households normally sell their livestock in Q3-Q4 in order to raise incomes for agricultural input purchases. With the food insecurity conditions, households may sell livestock for food purchases in the absence of food assistance.
• Self-Employment: The customer base for self-employment may shrink due to lower income levels in this poor production season. Self-employment provides 50 percent of household income needs in Q2, 40 percent in Q3 and 10 percent in Q4.

Crop production levels in proportion to baseline production

In the most-likely scenario FEWS NET projects that poor households will be unable to access up to 16 percent of their annual food needs.  In the worst-case scenario FEWS NET projects that poor households will face food deficits of up to 21 percent.  With very high maize prices and a significant proportion of people in the livelihood zone depending on humanitarian food assistance, the Lake Chilwa-Phalombe Plain Livelihood Zone (PHA) will experience Stressed (IPC Phase 2) food insecurity conditions. Due to current funding uncertainties, humanitarian assistance is currently secured until December 2012.  If humanitarian assistance does not continue after December 2012, FEWS NET has projected that the food security situation will likely deteriorate for poor and middle wealth groups to Emergency (IPC Phase 4) food insecurity conditions from January to March 2013.

Thyolo Mulanje Tea (TMT) Livelihood Zone

This zone is characterized by small landholding sizes (<1 acre on average), high rainfall (900-2000 mm), and poor soils. Due to the small landholdings, the poor and middle wealth groups are unable to produce enough food throughout the entire year. They depend mainly on labor/employment on the tea estates, casual agricultural labor and other income generating activities in order to earn money to buy food. Almost all households have one or more members working on the tea estates.  The middle and better off wealth groups typically have someone employed on the estates throughout the year, while the poor mainly find casual work picking tea from November to January. Livestock rearing is difficult in this zone because most of the land is under tea cultivation and grazing land is therefore very restricted.

FEWS NET’s projected analysis for the August 2012 – March 2013 period is based on the following assumptions (in addition to the national level assumptions listed above):

• Livestock: Livestock holdings in this area are very small due to lack of grazing land. Poor and middle households own chickens, which will provide 24 percent of their total seasonal income.
• Self-Employment: Self-employment will provide 52 percent of the annual income in this season compared to the baseline year.  This is because tea picking was affected by limited moisture.  Most estates experienced reduced tea picking wage labor, which affected many poor and middle households that are entirely dependent on work on the tea estates.
• Assistance: MVAC has recommended that food assistance programming in this area begin in January 2013. 

Crop production levels in proportion to baseline production

Under the most likely scenario, poor households will have a total food deficit of 14 percent for the remainder of the consumption year. Unlike the other zones included in this analysis, middle income households who mainly depend on working in the tea estates will also have a food deficit of 15 percent.  Together the poor and middle wealth groups make up about 70 percent of the population in TMT. This updated analysis shows that the needs are more than previously identified by the MVAC and the TMT area will require humanitarian assistance by October 2012 instead of recommended programming in January 2013.  Food deficits are high in both poor and middle wealth groups in TMT because this area is mainly cash-based, so household food security is much more dependent on household income and staple food prices.  Current retail maize prices are more than 150 percent of last year’s prices.  While actual wage rates for tea picking have nearly doubled when compared to the baseline year, opportunities to pick tea were limited this season because of low production levels. Due to a limited tea picking season and reduced purchasing power, it has been extremely difficult for poor and middle wealth groups  to access adequate food through markets for the whole consumption year. 

With very high maize prices and no humanitarian food assistance programming, households in the TMT livelihood zone will likely face Crisis (IPC Phase 3) level food insecurity conditions from July 2012 to March 2013.

Shire Highlands (SHI) Livelihood Zone

This zone covers the most densely populated portions of the country. It runs from the Thyolo Escarpment in the southwest up to southwest of Mangochi bordering Mozambique. The important urban centers of Blantyre and Zomba fall into this zone. Annual mean rainfall is about 1000 mm. The Shire Highlands is characterized by average food production with pockets of deficit areas, especially the eastern parts bordering the Lake Chilwa and Phalombe Plain zone. The main food crops grown are maize, sorghum and cassava. Cash crops include tobacco, vegetables, and cassava.  In a normal year, middle and better-off households are able to produce enough to feed themselves. The poor make up for their food deficits through ganyu and purchase in a normal year. The main sources of cash for the poor are ganyu, crop sales and small trade (buying and selling agricultural produce). For the middle wealth group, cash sources include small businesses and crop sales. The better-off households heavily depend on crop sales for household cash income in this area. Livestock holdings are very low in the zone. The better-off and some middle households keep a few goats while chickens are kept by all households.

Currently, poor households are migrating to the urban areas within the MSH including Blantyre and Zomba cities.  Poor households have limited incomes and most of the middle and better off households are reportedly selling household assets like chickens and goats, along with charcoal and firewood.

A typical household sources over half of its food requirements from its own production in a normal year. The second major source of food for the poor is from purchases, which is supported through income earned through ganyu. Based on the analysis outcomes, poor and some middle households will be unable to meet food needs between July and December. While the poor and middle households will migrate to look for ganyu opportunities in urban areas, not all households will earn enough to be able to buy the high priced maize from the markets. FEWS NET projects that poor households will likely face a 13 percent total deficit in their food needs.  However, in the worst-case scenario if prices continue to rise above 20 percent of current price trends, poor households may face up to 17 percent total food deficits.   

FEWS NET’s projected analysis for the August 2012 – March 2013 period is based on the following assumptions (in addition to the national level assumptions listed above):

• Livestock: Chicken holdings are at 100 percent of the baseline and will provide 131 percent of total income in the season. Goat holdings for poor households are insignificant and will not contribute any income for poor households.
• Self-Employment: The customer base for self-employment may shrink due to lower income levels in this poor production season. Self-employment provides 50 percent of household income needs in July-September, 40 percent between October-December and 10 percent between January-March. The poor and middle households will have to look for ganyu opportunities in urban areas.

Crop production levels in proportion to baseline production

At this time, poor households are facing Stressed (IPC Phase 2) food insecurity conditions. Humanitarian assistance programming is not planned for this area during the scenario period because of funding constraints. As a result, IPC Phase 2 food insecurity conditions are expected to persist through March 2013. There is the possibility that in the worst affected parts of the SHI, there could be pockets of poor households facing higher levels of food insecurity than the rest of the livelihood zone.

Rift Valley Escarpment (RFT) Livelihood Zone