The Government of Malawi says it has not yet used the US$311,000 received under the African Risk Capacity (ARC) anticipatory insurance policy, as it awaits the release of a larger US$3.06 million payout under the main drought insurance cover.

In total, Malawi has benefitted from US$3.37 million (about K6 billion) from the ARC crop insurance scheme, following natural disasters in the last farming season.

Principal Secretary in the Ministry of Agriculture, Dixie Kampani, says government is holding back the funds to ensure that the payout is used efficiently once the full amount is received.

“The coordinated disbursement of the payout will allow for efficient use of resources, hence the wait,” Kampani explained.

He added that once both amounts are available, the money will be split between direct maize purchases through the National Food Reserve Agency and cash transfers to households.

“The cash transfers will follow the Malawi Vulnerability Assessment Committee (MVAC) report, which guides when humanitarian support should roll out and the timeframe for implementation,” Kampani said.

He added, "Once released, these funds will provide an additional layer of support, proving the value of insurance as a safety net against climate-related shocks."

Meanwhile, agriculture commentator Gresham Kamnyamata, while cautioning against possible misuse of the funds, has hailed government for holding on to the initial payout until the full amount is disbursed.

“It is commendable that government has decided to keep about K500 million already received. Using it together with the larger payout will have a greater impact,” Kamnyamata said.

The government has been supplementing food security efforts using its own resources as it has already been procuring maize using K60 billion from the national budget, through ADMARC and the Food Reserve Agency, to cushion vulnerable households from hunger.