Determining optimal stock of grain for national food security in Malawi: A two objective grain sizing dynamic optimization approach

Abstract

Food insecurity remains an issue of great concern in Malawi. As such, the Government of Malawi through the National Food Reserve Agency (NFRA) and the Agricultural Development and Marketing Corporation (ADMARC) introduced the Strategic Grain Reserve (SGR) in 1979 to be able to store grain that can be used in responding to vulnerable households, during food shortages amidst climate change concerns. However, past estimations of how much grain the SGR is supposed to hold employed static models that did not consider the dynamic nature of food requirements presented by climate change and volatile food prices, let alone the duo objectives of achieving food security whilst minimizing storage costs. Through understanding the dynamic and evolving goals of the country, the current study employed dynamic optimization algorithms using GEKKO and Numpy libraries in Python. In terms of how much grain the SGR is supposed to hold, the study found that the optimal stocks to be held for 3 months with another 3 months lead time to mobilize grains under public-private-partnership capacity is 316,350 MT to effectively offset any historical shortfalls in supply, 674,178 MT for the emergency reserve and 191,267.9 MT as buffer stocks. Nonetheless, the country's physical storage space is not adequate and too costly to hold such a quantity of grain. The study therefore advises using futures contracts and virtual stock programs, such as grain banks, to ensure a swift and effective response in emergencies.