Examination of Witnesses (Questions 20-39)
MR JOHN WINTER, MR ROB HOLDEN AND MR JOHN HANSELL, OBE
TUESDAY 29 OCTOBER 2002
20. We have had the World Bank programme which has been falling, falling and falling; and then we have a new programme which is about subsidised grain, which will be used in the election, will it not?
(Mr Winter) I do not know.
21. It will be used in the election to either make people rich or to help buy votes. DFID has to come along with the Nacala railway programme, which is an obvious one and should have happened years ago, but the government does not really push it forward; there do not seem to be any adequate discussions with the IMF or World Bank. Is that not a true reflection of the situation in Malawi?
(Mr Winter) I think we have not, between us, got a consistent agricultural position for Malawi, no, that is true. One of the effects of the current crisis has been to push government further into thinking about the food security, with the result that it has launched the work I have described earlier with donors. We are very conscious that we need to get the Bretton Woods Institutions much more firmly into the agenda for Malawi. Insofar as we continue with budget support for Malawi, it has to be conditional on the government of Malawi's policy meeting much more the needs of the rural poor.
22. I am a fan of DFID, as everyone knows, but is it not a failure not just in Malawi but in DFID's strategy generally in Africa that agricultural strategy (and we talk about livelihoods) which is key to the future of Africa just has not featured?
(Mr Winter) We have certainly been concentrating much more on cross-cutting issues such as public service reform and public financial management reform than we did previously. I think that the Malawi team would say that one of the most effective ways of meeting the needs of the rural poor in Malawi is to get the fundamentals of the economy right, and to stimulate what is at the moment a very partial and small private sector. Meeting the needs of the rural poor does not necessarily mean concentrating on agricultural strategy. I accept where you have a poverty reduction strategy for countries like Malawi or Zambia it does need to cover agricultural strategy. One of the things we have been doing in Malawi is to try and plug one of the gaps which you mention, which is not having a land policy. We have put quite a lot of money and effort into that particular aspect.
23. Briefly, coming back to the point where Mr Worthington started a question about the reduction in Starter Packs in Malawi, at the World Summit for Sustainable Development, in the first week the Malawian Minister for Agriculture speaking on the food security debate stated that the reduction in Starter Packs was not something which the government of Malawi had agreed to. For the record, you did say about five minutes ago that they did agree to that reduction in Starter Packs. You might want to take away and examine what the Malawian Minister for Agriculture said; but do you still stand by what you said five minutes ago, that the government of Malawi had agreed to this reduction in the number of Starter Packs?
(Mr Winter) I think they agreed reluctantly. It is an issue which has come back again in discussion with them.
24. Could I ask a couple of factual questions. Why did you rely so heavily on expectations of a good cassava and potato crop, because I think you must have known that estimates compiled by local extension workers could be exaggerated?
(Mr Hansell) Yes, of course, any estimate can always be exaggerated, but we were getting information on what we considered good authority. We knew there had been an increase in the areas of sweet potato and cassava that had been planted over the last few years. What we did not expect was that the figures we were given were going to be as exaggerated as they turned out to be. In all these countries there is almost a fixation on maize. We accept that maize is the main staple but any other food is often dismissed; it is often seen as a snack, as something which is not really important, and that people have to eat maize all the time. We thought there might have been an element of this and that unless people were getting at least one meal of maize a day no other food counted.
25. May I just pick up on something you said in reply to Tony Worthington's question about the need for greater focus on agricultural policy for countries such as Malawi and elsewhere in sub-Saharan Africa, that it might require the introduction of new technologies. One of the things which struck me was that there was a perfectly good, although not particularly new, technology in treadle pumps. The introduction of treadle pumps enabled there to be two harvests a year, two crops a year. It is not rocket science, yet ironically they are importing treadle pumps from Bangladesh. They do not have the facility in Malawi to manufacture treadle pumps. Surely there must be some benefit in helping farmers acquire treadle pumps, even to the extent of trying to set up a manufacturing facility for treadle pumps in Southern Africa? I think treadle pumps are psychologically important in that, if one looks at all these figures of 14 million people with a lack of food, the rest of the world and our constituents after a while start to get the feeling that this is just desperate and beyond hope. The great thing about treadle pumps is they can actually see this technology making a real difference. My last point is, the week I came back from Malawi, where we were literally going to villages where people were eating crushed-down wheat and grasses on the Mozambique border, I went to my local prison where we have a thousand men banged up for 23 hours a day doing absolutely nothing. It seemed to me somehow there was a disfunction here. At least in the Prison Service we might be making treadle pumps for usenot taking jobs from anyone in the UK but doing rather better. It is not new technology but it needs some direct leadership, not from us but from their own government, in employing rather old technology to have an agricultural policy across Malawi and other countries in sub-Saharan Africa.
(Mr Winter) For the record, what I was doing when I mentioned new technologies was quoting the Malawi poverty reduction strategy.
(Mr Hansell) First of all, we have to remember that treadle pumps can only be used where the water table is relatively close to the surface, and it is these dambo, low-lying areas you see as you fly over Malawi. Not all the population is going to have access to that type of land. Those people who do have access are already, as you probably saw, using it for winter cropping anyway. We could enhance their productivity by putting in treadle pumps. Although treadle pumps may appear to be fairly cheap as far as we are concerned, they are extremely expensive for the average Malawian. Even if they were produced locally they would probably be out of the reach of most smallholder Malawians who, as we know, have less than half a hectare to subsist on. We have to look very carefully at how we introduce these pumps, and to whom we introduce the pumps. Some of you may have gone down to Dedza and seen what was happening. There was an attempt there by DFID to introduce treadle pumps but it is not an easy thing. To start with, you cannot hand them out, and if you do who do you hand them to? There tends to be elite capture by senior people in the village. Secondly, running treadle pumps on a community basis, which is a way of doing it, there are also questions there of who owns it and on whose land is it operating. There are many of these sociological problems which we do need to resolve. Having said that, I still believe there is a future because one of the things you notice as you go across Malawi is so little surface water; so little water is stored or utilised in that country compared, with example, to Zimbabwe to the south where there are dams and other forms of small-scale irrigation everywhere.
26. You do not even use Lake Malawi which is 20 per cent of the country, and that is surface water.
(Mr Hansell) It is in the rift valley and there would be an awful lot of pumping to get it out.
27. My question follows on from Tony's point about the early warning systems, particularly in relation to Malawi. Any early warning systems are only as good as the information gathered for that system. Mr Hansell mentioned earlier on how the information gathered about the maize production and the root crop was inaccurate. When we were in Malawi we saw that there was a lack of people in the field collecting this data. People were filling in the projected output based on last year's production, and there were a lot of errors in the system. Why did DFID accept these over-optimistic estimates as a basis of what to do next? It was very much on the basis of over-optimistic estimates that the strategic grain reserve was sold; and there was a knock-on effect with grain having to be bought at a later date at an increased price. I would have thought that within DFID somebody must have had the expertise to say, "This information coming into the system is not that accurate. Let's get more accurate information so that we can make a more accurate prediction". What lessons can be learned and how can that be avoided, because the knock-on effect from this poor information is quite catastrophic?
(Mr Winter) I would not want the Committee to go away with the impression that we rely solely on crop forecasts. As I think I said earlier, it was clear from the other forms of information that there was a developing problem. There was then a protracted period of dialogue with the government of Malawi as to what they intended to do about it; and a certain reluctance on the part of donors to be putting large amounts of food into the country at a time when it was not clear what had happened to the grain reservewhether it had been exported or whether it was still being hoarded within the country. An early warning system is only as good as the use that is made of it, not only as good as the information that goes into it. In terms of the lessons we have drawn, clearly there does need to be improved information. As I have said, it does not take a great deal of resource or ingenuity to work out that problems are developing. What we are concentrating on is trying to get the government of Malawi to have a more consistent approach to the use of information than they havebalancing information from one source against another. Clearly, if the government of Malawi had taken all the information available to it in the last quarter of last year they might have put their hands up earlier and said, "We have a problem".
28. Is it not the case that getting accurate information into the system is going to become more difficult year on year, partly because of the HIV/AIDS crisis and other crises within the country? We cannot expect there suddenly to be good information for the early warning system. How is DFID approaching this problem, because of the increased problems of getting good information into the early warning systems? An optimistic prediction was made about the root crops, but I am not sure that anybody looked at that prediction. Was it just taken at face value?
(Mr Hansell) Can I just step back and say, I admit last year there was a glitch in Malawi with the early warning systems; but it has been remarkably reliable in the past. This year again it warned us in good time that there was going to be a serious shortfall in cereal production. You have to look at how it operates. It is looking at rainfall. It is getting reports in about what the crops are doing and crop condition. As Mr Winter mentioned, there is also an indication of market prices and what market prices are doing. It does not actually do crop assessments until quite late in the season. February, I think, is the pre-harvest crop system when it is assessed, and it does another one afterwards. It is based on a limited amount of information. This is really about cereal production per se. What we are investigating at the moment and preparing is to go further than this into what we call "vulnerability assessments", which is using the methodology designed by the Save the Children Fund of household vulnerability assessments, which takes a look at the livelihoods at the household level and at village level to try to assess what is the real picture. Rather than looking at the national food production and saying, "Nationally, we're fine" when at the same time there can be pockets of hunger taking placewe are trying to get better assessment through a series of base lines of the food situation at provincial, district and even village level. We hope that that will come on-stream within the next few months. We are continuing to discuss how we fund that. That will be region-wide. That will be working with all of the SADC countries, not just the six affected countries at the moment, which will set up these vulnerability committees that will try and work things out. If they have a baseline, from then onwards it should be quite easy to assess what changes are taking place against those baselines.
29. Following on from that, it is a problem we saw in Malawi and you can see a similar problem unfolding in Zimbabwe, and that is the delay which is caused in DFID taking action because of their concern or the government within the country. In Malawi there were questions over the sale of the strategic grain reserve and the situation in Zimbabwe is worsening. How does the governance of the country delay the decision-making process of DFID? How can we not leave people hungry because of the problems of the government?
(Mr Winter) The answer to that obviously varies from country to country. In Zimbabwe the governance situation is very stark. The Secretary of State took the view very early on in this developing crisis that we were going to do all that we could to make sure that people did not starve (in her words) because of the actions of the government of Zimbabwe. Our response to the crisis in Zimbabwe in financial terms has been the largest part of our response to the Southern African crisis as a whole. What we can do in Zimbabwe is limited by the fact that we do not have a constructive relationship with the government; but within those limits we are doing all that we can to make sure that food does get through to people who need it. Where we have an ongoing dialogue with government, such as that in Malawi, about governance the situation does perhaps get cloudier. There were genuine concerns in the last quarter of last year as to the governance position on the Grain Reserve, why it had gone, who had ordered it to go and who benefited, but the operational point was where was the maize and was taking action to bring in large amounts of food necessary when it was quite possible that food was already in the country. There was a lack of information. I do not think we were ever saying at any point because the government of Malawi has allowed the Grain Reserve to go therefore we are not going to put any more food in. It certainly was one of the elements that led to the Secretary of State's decision not to provide any further budget support this year, but that was a rather different thing.
30. On the question about the sale of the Grain Reserve, are you aware of any evidence that the grain actually remained within the Grain Reserve and it was sold at a low cost and bought back in at a high price and it was effectively corruption within the system which led to the people of Malawi suffering and the government and those dealing with the Grain Reserve were culpable?
(Mr Winter) As you probably heard in Malawi, there has been quite an extensive report into this by the Anti-corruption Commission and a report has gone to the Director of Public Prosecutions. We are paying for an independent audit. Rather than attempt to deal with that question in any detail perhaps we could undertake to let you have the results of the audit 2.
John Barrett: Thank you.
31. We have spoken about this year's crisis and the lack of grain and maize this year and there was obviously a lack of rain. When I was there I wondered how we are going to avoid a crisis next year. I say that because I visited a seed store which had a modest amount of seed, not all maize, it had other crops, but certainly not sufficient maize. They had not got any fertiliser. There was a sense as well that the packs had gone out a bit late because they have got to catch the rain and the rain will come in November. The day I was there it did actually rain a little bit early, but there is a time window to get the fields ready to plant and hopefully the rain will consistently fall and crops will grow. The land needs to be prepared. Much of the land is prepared by people, personally hoed by hand, occasionally you saw oxen but it is a very intensive agricultural process. Some of the fields were not ready and in one village I asked why, they had all the time to prepare the land, there were people out there, and after muttering around I got the reply that the fields were not ready because the people who were doing that bit are now dead. The reason was HIV/AIDS. I would have to say I was aware that I was in a country more dependent upon agriculture than I have ever been in my life but as I stood in the fields there I have to say I have never been so strongly aware, to use that old imagery, of the shadow of the Grim Reaper over those fields. So the possibilities of them growing sufficient food for next year seemed to me to be not too optimistic. In other words, it is not just one failure of the rain, you get people back on track and next year there will be food and it will all be all right again. When you speak of a consistent agricultural strategy I get the impression it is going to be an agricultural country for a long time to come, there is not a clear pathway to industrialisation or even through steps into more intermediate trade and cropping for export, it seems to me it is going to be a self-sufficient economy, not that that is a good thing and could it ever get there. Is there a wider strategy that is going to address not only agriculture and the failure of the rain, not only irrigation, but the HIV/AIDS crisis as well because it seems there is a complexion of issues that need to be addressed in Malawi otherwise we are going to have the crisis repeated year after year?
(Mr Hansell) You are talking about Malawi there.
Mr Battle: Yes.
(Mr Hansell) Yes, I would agree with you that we all see this as a complex emergency with HIV/AIDS playing a dramatic part in it. In terms of the two million packs going out, those two million packs will be planted by people. I think the evidence is most of them will go into the ground. They were out in good time this year as opposed to last year. We expect Starter Packs will bring in another 400,000 tonnes of maize this year given favourable weather. Although some people will not have prepared their land, packs that will go out to people that have got land and it will be planted. The overall impact of HIV/AIDS in the whole of Southern Africa is dramatic and it is impacting in particular upon subsistence farmers in the area. One of the problems we have to grasp is how do we help them where they are depending upon family labour, where you may have sold your assets which include draught oxen and you are down to family members hoeing the land, and the family members consist of a grandmother and a grandfather and ten orphan children? We have not yet managed to solve how we get technologies to those people. Even if you give them fertiliser and seed are they able to prepare the land to put it in? We need to be spending much more time finding out how we can find appropriate technologies for those people, people who have shortages of labour first and foremost, who are unable to grow cash crops. If you are going to grow a crop at all you go into a subsistence food crop as being a survival mechanism. We have not cracked that one yet but we are working on it and we are talking to many of these CG (Consultative Group on International Agricultural Research) centres about looking at new technologies that will address people with large numbers of HIV/AIDS affected people in the family.
32. I related it to my experience in Malawi but if I were to ask a more general question, in the DFID memo, paragraph 12, it acknowledges that the Southern Africa crisis is multisectoral, so there is an acknowledgement of the range of challenges that are faced. While food pledges are 70 per cent of the appeal to date, non-food pledges are currently at 13 per cent of the needs. Why is there such a shortfall of non-food aid?
(Mr Holden) I think some of that comes down to the fact that for such a long period this crisis was primarily seen as a food crisis and people were heavily focused on just the food sector, the provision of food. We have only just seen in the last couple of months that people are now pushing it much wider than that to take a multisectoral approach, to look at the impact of things like HIV/AIDS, to look at health, look at nutrition, look at water and sanitation, those other factors that contribute to people's well-being. That may be some of the cause, that it has taken some time to push it much wider than a food crisis.
33. So there will be efforts made to narrow that gap so that non-food aid will go up rapidly, will there?
(Mr Holden) I think there are efforts under way to narrow that gap. I think we will see when the consolidated appeals are reissued in the New Year that those needs will probably rise and rise dramatically.
(Mr Winter) Can I just come in on that. As you say, some of these underlying problems are longer term ones and are being dealt with through longer term programmes. We have tried very hard to mainstream HIV/AIDS in all our programmes in Southern Africa so that no national policy that we support fails to take account of the impact of HIV. We do know that we are in there for the long haul and some of the response needs to be through increased UN emergency activity, some of it needs to be in the way that we manage our long-term development programmes.
34. While we were there we visited the World Food Programme store of gifts from everywhere and I was a little bit surprised as I walked around the great warehouse to see bags from Zimbabwe and bags from Zambia given that they have got a food crisis as well. I asked why they were getting food sent to Malawi from Zimbabwe and we went into a discussion about GM maize and whether or not GM maize was available and the whole question of milling. I had some vague idea of the situation there, not so much in terms of the food aid programmes but what they told me is that maize is flowing around in Southern Africa, it is moving. What about the commercial maize and food imports that take place informally? Do we know anything about cross-border flows of maize between Zimbabwe, Zambia, Malawi? Have we any information? Do we have any knowledge about this? Do we record this? Do we know what is actually going on in the marketplace?
(Mr Hansell) A very interesting question, do we know? There is a lot of informal movement of maize across those borders. They are open borders, as you have seen. We are pretty sure that something in the region of 100,000 tonnes or more of maize has come across from Northern Mozambique into both Malawi and into Zambia. There have been reports that there is lots of maize in Northern Zambia while the donors continue to import it from outside. That maize is almost certainly coming in from Tanzania and it is moving across to Northern Mozambique, which is quite normal at this time of the year when there is a shortage in some countries as it comes in. That, if you like, is the informal trade that is taking place by small scale traders. There is, of course, a distortion in prices throughout the region. All the countries now are putting some degree of subsidy on maize and none more so than in Zimbabwe where the subsidy is huge. Therefore, it would not be inconceivable that people with access to maize in Zimbabwe would be selling it across the border to Zambia where you would get, in effect, the export price for your maize. I also believe that there is a certain amount of illegal, you might say, cross-border selling and purchasing taking place within the region.
(Mr Winter) We would, of course, like to see an open market in maize within the region.
35. Is DFID completely opposed to food subsidies as a form of price support?
(Mr Winter) No. You had a discussion, I believe, with our office in Malawi about this. What we would like to see are subsidies, where they are necessary, to be as cost-effective as possible and that will normally mean targeted subsidies where methodologies for targeting are available. What we do think is a bad idea is to have general subsidies which are often brought about for political reasons which are very expensive and have the risk of elite capture.
36. Can I just pick up something that John Battle was saying. This is not getting at DFID, one is not expecting one donor or one UK government at any one time to solve all the problems of the world. What probably struck all of us possibly more forcibly in Malawi than other countries that we have visited recently simply because it was starker there was the huge impact of HIV/AIDS. This is a country with only 11 million and we were told there are something like one million orphans already. One would go into many villages finding elderly grandparents looking after quite young children and clearly on their life expectancy those children are likely to be totally orphaned quite soon. One came across a number of completely ad hoc orphanages with NGOs of varying degrees running them. Both there and in Ethiopia and Kabul to a certain extent it struck me that we have not got a hope in hell of meeting the 2015 targets of children in primary education if you have these huge numbers of HIV/AIDS orphans without any overreaching strategy. I have to say my impression of Malawi was there was practically no grip from the government in Malawi on some of these issues, they seemed to me to be rather preoccupied by whether the President would have a third term. I think I probably want to put on the record, to use Jim Morris' comments in the press release on the Horn of Africa, that these figures are large and dramatic and the international community should take notice. It is the scale of some of this which perhaps the international community needs to take on board, not just in DFID. It is the huge scale of the challenge that we have in Sub-Saharan Africa in relation to HIV/AIDS which is so frightening.
(Mr Winter) You are absolutely right. Trying to run development programmes in the shadow of HIV/AIDS in Southern Africa is a very sobering challenge. We do have programmes of support to combat HIV/AIDS in support of national committees where they exist. Only a certain amount can be done with technical inputs from outside and until this gets to the top of the political agenda in these countries things will not change. We have some idea of things that work at the margins but the thing that really works is political direction from the top.
37. Finally could I just ask some straight forward factual questions. Firstly, what is DFID's position on agricultural input subsidies, either targeted or universal, in the long run? The team that have evaluated the Starter Packs seem to be strongly in favour but other donors appear to be sceptical. What is DFID's position on long-term agricultural input subsidies?
(Mr Winter) That they are perfectly valid as part of the long-term agricultural policy.
38. What is the future of the Strategic Grain Reserves in national food security strategies? Can the "options markets" suggestion work for countries like Malawi and Zambia, which are landlocked, poor and short of foreign exchange?
(Mr Hansell) Yes, we believe it can. We think it is time to move away from holding extremely large and expensive Strategic Grain Reserves. There is a need and there is an interest, particularly in Malawi, for looking at the options market in South Africa to see whether or not there are alternative ways of holding this within the continent rather than at the moment the Strategic Grain Reserve is actually being held in the USA.
39. We have had evidence from quite a number of NGOsAction Aid, Christian Aid, Oxfam, WDMall of whom in their memos in one way or another have submitted that the radical one-size-fits-all liberalisation policiesI am paraphrasingwhich they allege were effectively imposed by the World Bank and IMF through loan conditionality, have contributed to the current food security crisis in the region. What do you say about that? What are your feelings about the role of the World Bank and IMF in all of this?
(Mr Winter) Certainly agricultural liberalisation has had a role in food insecurity. When you look at organisations like ADMARC in Malawi, they provided a cradle to grave service for farmers at enormous expense and there was considerable justification for asking governments to look at the effect on their budgets of continuing that kind of comprehensive input. The losses incurred by ADMARC are still a massive drain on the Malawi budget. I do not think that going back to the days of universal provision is a starter. Nevertheless, the private sector has clearly not come in to meet the need in the way that the people who designed these programmes, and governments themselves when they signed up to these programmes, envisaged. One of the points made by Professor Kydd in his paper is that although you cannot go back to the old days you do need more imaginative solutions in terms of incentives for the private sector to move in and, indeed, infrastructure to enable them to move in. One of the base requirements of Malawi is for a decent road system and it is one of the things that the EU is now finally concentrating on. Things that were started for very good reasons have not had the effects that we expected. In Malawi we have attempted to make up for the lack of this universal provision through a safety nets programme and we will continue working with the government on that, and on its food security strategy which we firmly expect will involve a higher role from the private sector.
5 2 Audit is currently underway Back