43
The impact of the famine on malnutrition and mortality is poorly documented and remains
the subject of debate (Menon 2007). Reports of a famine affecting rural areas emerged in
October 2001. However, Government and donors did not act until civil society groups
presented evidence supporting the reports coming from the countryside. The famine was
finally publicized in February 2002, i.e. when the toll in terms of deaths by starvation and
severe food insecurity was already very high: from January to April 2002 alone, between 500
and 1,000 people died of hunger or hunger-related diseases in the Southern and Central
regions (Menon 2007) making the 2002 famine one of the worst in living memory. Unlike in
the case of Niger in 2005, the data on the admission of children to feeding centers are few
and far between and do not allow to detect major increases in the number of malnourished
children admitted to feeding centers (Figure 22).
Figure 22 - Malawi: Number of child admissions to NRU feeding centers (left scale) in relation to
the ‘shock component’ of maize prices due to famines (blue line) (2001-2010)
0
500
1000
1500
2000
2500
3000
J
a
n
-0
1
J
u
n
-0
1
N
o
v
-0
1
A
p
r-
0
2
S
e
p
-0
2
F
e
b
-0
3
J
u
l-
0
3
D
e
c
-0
3
M
a
y
-0
4
O
c
t-
0
4
M
a
r-
0
5
A
u
g
-0
5
J
a
n
-0
6
J
u
n
-0
6
N
o
v
-0
6
A
p
r-
0
7
S
e
p
-0
7
F
e
b
-0
8
J
u
l-
0
8
D
e
c
-0
8
M
a
y
-0
9
O
c
t-
0
9
M
a
r-
1
0
A
u
g
-1
0
n
.
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
in
d
e
x
n
.
N. child admissions
Famine price component
Note: The explanation of how we calculated the famine price component can be found in footnote 30
Source: Authors’ calculation on Malawi’s Ministry of Health and FEWSNet
The 2007/8 and 2008/9 food crisis
Unlike in 2001/2, the maize price peak of 2007-2008 and 2008-2009 – and the ensuing
increase in child malnutrition - happened in a context of a growing maize production (Figure
9). Good rains and improved access to seeds and fertilizers led in May-June 2007 to a bumper
crop estimated by the Ministry of Agriculture at 3.22 million tonnes (Table 5) which,
according to Government estimates, generated a maize surplus of one million tons. As a
result, the Government issued tenders to private traders to export 450 thousand tons (Jayne
and Tschirley, 2009). Yet, by late 2007 the private traders had managed to export only 283
thousand tonnes due to
difficulties in purchasing maize on the domestic market. The
Government
pledged to export the remaining 167 thousand tonnes (Minot, 2010). In
addition, following a surplus projection of 600,000 tons from the 2006/07 maize harvest, the
exportation of 400,000 tons to Zimbabwe was allowed.
This un-realistic ‘export drive’ lead to a rapid price escalation which started in late 2007/early
2008 and raised Malawi’s maize prices 100-150 USD per ton above those in the neighbouring
countries. This forced the government to suspend further exports, restore the legal
monopoly of ADMARC on maize trading and ban private trade, in an attempt to moderate
44
the price increase (Jayne et al. 2008, Minot 2010). In addition, the official estimates of a
bumper harvest masked localised shortages, the informal importation of over 50 thousand
tonnes of maize (FEWSnet 2008b)
, and rationing by ADMARC. Thus,
the official estimate of
the May 2007 harvest was – as in 2001/2 – overoptimistic, and that the planned maize
exports were potentially dangerous.
As reported by Jayne et al. (2010), in May 2008 the Government announced that the country
had produced another sizeable maize surplus, estimated at 500 000 tons. Under these
circumstances, the government main concern was to guarantee a floor price for the
overproduction (so as to benefit the small farmers) and to accumulate food security stocks.
To this aim, ADMARC was instructed to purchase a quantity of maize greater than in the
previous years and at a price that increased over time to outbid private traders.
However, in
response to the rush for maize and of its limited availability in the market maize prices rose
again dramatically, while by August, ADMARC and the NFRA had procured only 60,000 tons,
i.e. less than the demand for grain at ADMARC depots during the upcoming lean season. By
early August 2008, only 2–3 months after the reportedly good harvest, maize prices had
reached historic highs. In August, the Government of Malawi announced a ban on private
maize trade, which was then transformed in September by the obligation of traders to
operate within the official floor and ceiling prices. As
the latter was well below the market
price,
several traders simply stopped buying grain.
At the same time government stipulated a
contract with a large trader to supply maize to ADMARC and fixed a purchasing price far
above the ceiling price. Further, from the end of 2008 to the beginning of 2009, maize import
price form South Africa, net of transport costs, were significantly below prices in Malawi. As a
consequence, private traders applied for import licenses that were not approved as – it was
argued - the country had sufficient maize supply. As a result, the domestic maize price start to
rise and the imports were not enough to prevent it.
Thus, rationing of maize sales by ADMARC in both 2007 and 2008, continuous net imports of
maize from neighboring countries, and domestic prices in Malawi higher than those of
regional neighbors seem to suggest that official maize production figures in recent years
were systematically overestimated. In addition, this erroneous information on domestic
production
19
, together with the maize export drive and the subsequent pricing interventions
exacerbated the spikes in maize prices that happened in late 2007 and 2008. Speculation in
the domestic market following high international food prices (Chirwa 2009, FEWSNet 2008b),
inflationary pressure, exchange rate devaluation, and possibly the increase in the cost of urea
(Figure 10) were also additional factors.
Evidence of the problems affecting in 2008 the
domestic maize market is provided also by the difficulties faced in late 2008 by WFP in
sourcing maize for their school feeding and relief operations.
Also in the case of the 2007/8 and 2008/9, the nutritional impact of the crisis is less than well
documented. In early October, 2008, the Malawi Vulnerability Assessment Committee
released a report estimating that 1.5 million rural households had run out of maize and were
forced to purchase their residual food requirements at prices that were extremely high. The
data on malnourished children at feeding centers (Figure 21) signals a rapid increase in
admissions at feeding centers. While in the pre-crises 2006 this number averaged around
19
The World Bank (2003) has observed that crop estimates do overstate food production in Malawi. This
information about domestic maize supply and maize stocks can affect the behavior of actors in the market and
thus have an impact on food prices. One reason of all this is the uncertainty over trade flows of maize, which
exacerbate the imperfect nature of information on maize production and availability.