Date sent: Mon, 03 Jun 2002
IMF denies it caused Malawi food crisis + Comment !!
Further to GSN post of May 28th: "In Malawi, Many to Blame for Food Crisis" [including IMF & WB] [See #2 below for excerpts] Here is a namby - pamby denial from the IMF claiming it only 'advised' and did not 'suggest' that the government might want to sell off some of its reserves because it was costing $12.00 a ton per year to store! Nor does the IMF response address the other part of the criticism that they 'advised' the government to cut back on the amount of free fertilizer and hybrid seeds it distributed over the last two years at a time when many impoverished subsistence farmers in Malawi could not afford to buy them on there own and particularly at a time when famine was imminent. Nor does it address the tendancy for economic globalization, its trade treaties, investment flows, financing and related structural adjustment programmes, and corporate led industrial agriculture to undermine food security in the South, destroy national agricultural capacity and impoverish small farmers, many of them women in the developing world, in a manner which has contributed to hunger, starvation and famine. And finally in regard to the IMF's response about advising versus suggesting the sell off of food reserves the following quote from Barlow and Clarke in "Global Showdown" may shed more light on the actual policy context often masked by meaningless rhetoric: "The WTO Agreement on Agriculture (AOA) is one of the most complicated of all the WTO agreements. Ostensibly introduced to remove subsidies around the world, it has worked largely to the benefit of large agribusiness corporations, no matter what their country of origin...... AOA requirements also mean that sovereign nations are now in the ludicrous position of being unable to maintain emergency food stocks in anticipation of drought, crop failure, or war. They are now forced to buy everything they need on the open market. "Food self- sufficiency now means having the money to buy food, not the domestic ability to produce it. It is clear how this penalized poorer countries and poor people: they do not have ready steady currency to buy food, and because they are closer to starvation line, they may have a greater need to set up emergency food stocks during relatively good years." --- Barlow and Clarke. 2001. "Global Showdown: How the New Activists Are Fighting Global Corporate Rule." Canada: Stoddard. [pp 82-83] fyi- janet ======================================== [1] May 29, 2002 IMF denies it caused Malawi food crisis From Michael Dynes in Johannesberg http://www.timesonline.co.uk/article/0,,3-310611,00.html THE International Monetary Fund has denied allegations that it was partially responsible for the gathering famine in Malawi. The Washington-based institution has been blamed for putting pressure on President Muluzi to sell off maize reserves to save money on storage and to repay foreign debts at the very moment when the harvest failed. Aleke Banda, Malawi's Agriculture Minister, and Western aid agencies, including the Save the Children Fund, have claimed that the IMF and Western donors pushed Malawi into selling the reserves. The row has thrown a spotlight on to the seemingly irreconcilable goals of sound financial discipline required by the IMF among developing countries in exchange for financial assistance and the need to maintain expensive food surpluses to avert sudden food crises. Malawi sold off virtually all its stock of 167,000 tonnes of maize, the staple diet for most of the 11 million inhabitants in the impoverished central African country, in August 2000. This was after unprecedented floods earlier in the year had ravaged production.The floods, followed by drought, left Malawi with a shortfall of about 600,000 tonnes and made the hardest-hit of the six Southern African countries - along with Zambia, Zimbabwe, Mozambique, Swaziland and Lesotho - that are struggling to cope with their worst food emergency in almost five decades. Food shortages in Malawi are now so severe that farmers are sleeping in their fields to protect their withering crops from thieves. People caught stealing maize are said to have had their hands and ears chopped off, a sign of mounting violence and social disintegration unprecedented in the former British colony. The United Nations' World Food Programme estimates that three million people will need emergency food assistance in Malawi alone between July, when existing maize stocks run out, and March, when the next harvest is due. The IMF said yesterday: "The allegations are wrong." It said that it had merely advised the Government to reduce the strategic grain reserve to 60,000 tonnes, which would have provided a sufficient buffer stock for emergencies. It did not suggest that the Government sell off the maize reserve entirely. At no time did the IMF "insist that Malawi reduce its food stocks as a condition of lending, nor did the IMF pressure Malawi to make any sales from the buffer stock," the statement added. The sale of the reserve is the subject of controversy. Local reports have alleged that the sale was corrupt and that much of the proceeds never reached government coffers. Government officials have also been accused of buying the maize while prices were low and reselling at huge profits after prices soared by more than 350 per cent when price controls were removed. The Government has denied any wrong-doing and an investigation into the sale is under way. The IMF, Britain and the European Union have frozen $75 million (£51 million) in foreign aid in protest over what they have said is corruption. Harry Potter, a senior advisor with Britain's Department for International Development, said that the IMF was correct to advise the Government to sell part of the reserve, which was costing $12 a tonne a year to keep in storage. "There was no direct pressure applied by the IMF to sell," Mr Potter said. "The advice was to reduce the size of the reserve, not to eliminate it." The Government has yet to explain why the reserves were reduced to less than 4,000 tonnes. The sale also took place in an untransparent manner. While some of the money was used to repay loans, the rest remains unaccounted for. "The Government appears to have some interest in encouraging the view that it's all the IMF's fault." Copyright 2002 Times Newspapers Ltd. <><><><><> [2] "In Malawi, Many to Blame for Food Crisis" [including IMF & WB] [ Excerpts pertaining to IMF] Bad weather has contributed to the problem, but it is far from the only reason for the crisis. Another factor was a gradual reduction in the government's subsidies to farmers. ... at the prompting of international donors such as the World Bank and the International Monetary Fund, the government cut back on the amount of free fertilizer and hybrid seeds it distributed over the last two years....But many impoverished subsistence farmers in Malawi could not afford to buy fertilizer and seeds on their own... Normally, Malawi's Strategic Grain Reserve would help meet a shortfall in its annual grain harvest. But to its surprise, the government last year discovered the grain reserve was empty. That, too, had something to do with the World Bank and the IMF. The agencies had earlier concluded that Malawi could not afford to keep such large grain stocks, some 167,000 tons. They suggested that the government reduce the reserves.. fyi-janet http://www.voanews.com/article.cfm?objectID=DF003391-0BFC-4FAB- A51F896330B8F153&title=In%20Malawi%2C%20Many%20to%20Blame%20f or%20Food %20Crisis# Also found at http://www.mai.flora.org/forum/37664 ---