Minister of Agriculture and Food Security, Dr James Munthali has clarifies on the Farm Input Loan Programme (FILP) saying it is a loan programme and not a hand out or subsidy programme. In the programme, farmers are expected to pay back with cash and not maize in return for the loan after the harvest season. This was disclosed Thursday when the minister in conjunction with the Malawi Rural Development Fund (MARDEF), which will implement the FILP programme, held a press conference in Lilongwe to enlighten the media on the technicalities and implementation of the programme. Malawian farmers in cooperatives, associations, clubs, groups, saving and credit groups as well as youth groups with potential to repay back the loan will get a loan of 2 bags of fertiliser, one of NPK and one of Urea. However, each beneficiary is expected to pay for an administration fee pegged at MK575 and a bank card at K1, 800 with the card charge varying with membership of the group. Farmers are expected to deposit 5 percent of the total loan amount as collateral and a premium of 0.5 percent of the total loan as insurance translating into K170. Total contribution of a farmer amounts to K3, 200 and farmers are expected to repay the loan by October, 2014. "I would like to state here that this is a sort of a revolving fund that farmers are expected to pay back the loan after harvesting and selling part of their harvest. The more people repay the more inputs will be made available to the farmers. And similarly, the more fertilisers we use, the more yields we shall have. "This is so because from the two bags of fertiliser, a good farmer is expected to get more than 25 50 kilograms bags of maize. And from that if we look at the total loan which is about K34, 000 that only requires 7 bags of maize at K500 per kilogram and the remainder is what the farmer uses," said Dr Munthali. The minister, however, said the more important thing is that if the farmer has food, they will have more time to spend on other income generating activities which would in one way improve their livelihoods and simultaneously provide a good chance of sustainable food supply in the country. FILP is being implemented to enable potential business oriented farmers to access fertiliser inputs loan. It is targeting farmers who can sustainably produce for the nation by giving these farmers favorable conditions for accessing agri-input loans based on the background that most Malawian smallholder farmers face challenges in accessing finances for purchasing inputs. The programme has been introduced this growing season to increase agricultural productivity, access to inorganic fertilisers, promote commercialisation of farming at smallholder level where loan is being used amongst others. MARDEF Chief Executive Officer, Joseph Mononga , said the programme is a deliberate step to target farmers who are already in established groups saying groups which are formed specifically to access a product usually make mistakes. "Amongst the collateral and other things, it is a deliberate step by structuring this loan to be accessed by only those in already established groups and cooperatives and all the other specifications. This is so because groups that are formed just to access a particular loan usually make mistakes than already established groups who know what to do and the importance of a loan," said Mononga. He said his office is ready to implement the programme as it already has regional offices, personnel in all districts and they work both at the constituency and village level. MARDEF will be working with agricultural extension officers Ministry of Agriculture and Food Security as well as coordinators that have been recruited for the programme.
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