Supply-side Crowding?out and Crowding?in Effects of Malawi s Farm Input Subsidy Program on Private-Sector Input Marketing: A quasi?experimental field study

The present article estimates the extent to which participation in Farm Inputs Subsidy Program (FISP) crowds-out/in fertilizer sales among private sector retailers in Malawi. Malawi implemented FISP reforms during 2015/16 season that allowed certain larger-scale fertilizer distributors to sell FISP fertilizer at their retail outlets in select districts on a pilot basis while smaller-scale agro-dealers were excluded. We use a unique panel dataset of fertilizer retailers collected before and after the policy change to measure supply-side crowding-in/out impacts of the FISP. Using a difference-in-differences estimator we are able to obtain a causal measurement of how the policy change affects fertilizer sales for retailers who participated in the program and those who did not. Results indicate that distributors who sold the FISP fertilizer experienced a 299 Mt increase in the volume of total fertilizer sales, on average. Conversely, agro-dealers who were excluded from participating in the pilot program experienced a 28 Mt decline in their fertilizer sales, on average. This suggests that the reforms have mainly benefited distributors who sell 90% of the fertilizer in Malawi, but caused some harm to the many agro-dealers who sell 10% of Malawi s fertilizer, but also conduct their businesses in more remote areas. Acknowledgement : The research team gratefully acknowledges the Gates Foundation Global Development Programme for the financial support towards research on issues surrounding Malawi s Farm Input Subsidy Programme (FISP) under a project titled Guiding Investments in Sustainable Agricultural Intensification in Africa (GISAIA). This was a collaborative research project involving the Lilongwe University of Agriculture and Natural Resources (LUANAR-Malawi), Purdue University (USA) and Michigan State University (USA) that has provided useful policy information for the Government of Malawi. Views expressed herein do not represent that of the Gates Foundation and all errors and omissions rests with the authors

What does Malawi's fertiliser programme do to private sector fertiliser sales? A quasi-experimental field study

Malawi implemented reforms to its Farm Input Subsidy Program (FISP) during the 2015/16 agricultural season that allowed certain large-scale, private sector fertiliser dealers to sell subsidised fertiliser at their network of retail stores in select districts on a pilot basis. At the same time, small-scale independent fertiliser dealers were excluded from participating in the pilot. We use a unique panel dataset of large-scale corporate fertiliser dealers and small-scale independent fertiliser dealers collected before and after the policy change to estimate the impacts of the FISP on those who participated in the pilot and those who did not, using a difference-in-differences estimator. Results indicate that large-scale dealers who sold the FISP fertiliser under the pilot programme in 2015/16 did not have their commercial sales either crowded-in or crowded-out by the FISP pilot. Instead, the average volume of fertiliser sold at each of their retail stores increased by 59% due to an increase in subsidised fertiliser sales. Conversely, small-scale independent fertiliser dealers who were not allowed participate in the pilot had their commercial sales crowded-out by the programme. They experienced a 60% decline in the volume of commercial fertiliser sales on average at each store. This implies that the FISP reforms have mainly benefited large-scale fertiliser dealers who sell 90% of the fertiliser in Malawi, but caused some harm to the many small-scale independent fertiliser dealers who sell about 10% of the private sector's fertiliser in Malawi, but often operate their businesses in more remote areas

How do informal farmland rental markets affect smallholders’ well‐being? Evidence from a matched tenant–landlord survey in Malawi

We estimate the efficiency and equity returns to farmland rental markets in Malawi using a matched tenant–landlord survey of smallholder farm households in four districts. Our sample allows us to more fully observe the landlord side of the rental market, which is almost always missing in previous studies. Our results suggest that land rental markets promote efficiency by facilitating a net transfer of land to more productive farmers. We also find that land rental markets promote equity as conventionally defined in the land markets literature, that is, by transferring land from land-rich households to land-poor households, and from labor-poor to labor-rich households. However, our study identifies some important challenges for land rental markets in this context. First, we find that tenants in our sample are wealthier than their landlord counterpart on average in all dimensions other than landholding. In addition, most landlords report the motive for renting out their land as either the need for immediate cash, or the lack of labor and/or capital to cultivate the plot that was rented out. These findings align with concerns about potential “stress renting” by poor landlords and suggest the value of defining equity along a broader set of dimensions other than simply equalizing the distribution of farmland and labor