It costs more and more to eat in Namibia: food prices have increased by 17 percent year-on-year, combined with an inflation rate of twelve percent.

The majority of the Namibian agricultural sector consists of communal farmers – who are mainly subsistence farmers -- and some commercial farmers. 60 percent of Namibia’s population of two million lives in rural areas and depends largely on subsistence farming for food supply.

The Namibian agricultural policies therefore place great importance on achieving food security as well as sustaining and creating job opportunities within the agricultural sector. Creating jobs is particularly important in a country with an unemployment rate of 36 percent.

To support local production, Namibia put in place a subsidy programme for communal farmers in the dry land crop production in 2007 that subsidises production inputs (seed and fertiliser) and services (ploughing and weeding).

It is too early to judge the full impact of the subsidy programme, but some preliminary results indicate that there has been little demand for the fertiliser subsidy, for example, due to general scepticism towards the toxicity of fertiliser.

What the farmers don’t realise is that if they combine the fertiliser with organic matter in the soil, they can prevent toxicity while improving retention of nutrients during heavy rains. This will increase production as well as prevent soil degradation.

The example illustrates that subsidies are only one part of what is needed to increase production. Equally important is information about best production practices. In Namibia, insufficient information about the proper use of fertilisers has undermined the effect of this particular subsidy.

Another example shows that good intentions are insufficient. Subsidies only work if their objectives are clearly defined. It is therefore important to carefully plan the implementation of subsidies to ensure that intended beneficiaries are reached and public funds put to good use.

For instance, farmers who own a tractor usually offer ploughing services to farmers without tractors, and so a ploughing subsidy was meant to reduce the price of these services. Yet, after the implementation of the subsidy, ploughing prices went up by almost the same amount as the subsidy. Instead of representing a relief to poorer farmers, the subsidy backfired and mainly benefited tractor owners.

To make the programme work, timeframes for the provision of subsidies need to be developed, together with a programme that supports farmers to graduate from subsidy receivers to self-sustained farmers. The Namibian government is currently developing a policy for dry land crop production that is expected to address such concerns.

What makes attempts to secure food security in Namibia even more complicated is that maize production is protected against foreign competition through import restrictions. Yet, in direct contradiction, as a signatory to the World Trade Organisation (WTO) agreement, quantitative restrictions on import of agricultural products were, with some exceptions, outlawed in Namibia in 1994.

To circumvent this Catch 22, every WTO member country, including Namibia, has a schedule of negotiated agricultural tariffs, which can be used to protect the local maize market and the people it employs. Both import restrictions and tariffs are to the detriment of Namibia’s urban population, however, which depends on buying food and would benefit from access to cheaper, imported food.

But there is also a positive example for how the country’s agricultural policies have helped to improve food security: Namibia has a conservative pricing agreement between millers and producers, which is negotiated annually. The price is established based on the five-year moving average price for maize and the current year’s price.

This agreement smoothens out price shocks for both millers and producers and allows for better planning and lower risks. It has contributed to a lower price increase for maize by seven percent. There is one downside, though: it is vulnerable to competition from abroad and dependent on effective market protection, such as the import control described above.

In other food production sectors, the benefits of agricultural regulation remain questionable. Fruit and vegetables are, for example, marketed under a market share promotion scheme in Namibia. This means that to acquire an import permit, the importer must prove that he has bought 25 percent of locally produced fruit and vegetables within the previous three months.

Since the scheme came into force in 2004, the local fruit and vegetables production has increased fivefold from 7 percent to 35 percent. It is not clear, however, whether the increased production means more jobs or if workers are used more efficiently. It also remains unclear whether local production could be replaced by cheaper imports of fruit and vegetables since Namibia is exporting vegetables.

The Namibian subsidy programme falls short of adequate planning and, because of this, the benefits of its subsidies fall short of their potential. The combination of pricing formula on staple food and import control represents some protection against price fluctuations.

Yet, the need for import control indicates that maize can be produced cheaper abroad. Interventions thus imply a trade-off between protecting jobs in Namibia and giving the population access to cheaper, imported food.