Targeting Agricultural Input Subsidy Coupons in Malawi

This paper analyses the factors that influence access to agricultural input subsidies in Malawi. The results show that vulnerable households such as the poor and elderly-headed are less likely than other households to receive fertilizer coupons and receive less of the subsidized fertilizers. Households with larger parcels of land and those who sell part of their produce (commercialized) are more likely to receive coupons and also tend to acquire more fertilizers. Use of open meetings in the allocation of coupons tends to favour the poor and the poor receive more fertilizer compared with discrete of coupons. We also find a positive relation between participation in other social safety nets and access to subsidized fertilizer coupons, suggesting that households that participated in other social safety net programmes are not excluded from the input subsidy programme by virtue of benefiting from other social assistance programmes

Initial Conditions and Changes in Commercial Fertilizers under the Farm Input Subsidy Programme in Malawi: Implications for Graduation

The government of Malawi has been implementing agricultural input subsidies since 2005/06 as an intervention aimed at improving food security among resource poor smallholder farmers. Although the issue of graduation is not articulated in the design of the programme, this study investigates the determinants of changes in the demand for commercial fertilizers in the presence of the subsidy programme. The increase in purchase of commercial fertilizers by subsidized households may indicate prospects of graduation from the subsidy programme in future. Using panel data between the 2004/05 and 2008/09 seasons, we find that 6 percent of households that did not purchase ommercial fertilizer in 2004/05 could afford to purchase fertilizers commercially in subsidy years. Relative to those that never purchase fertilizers, these households tend to have higher per capita expenditure and higher values of durable assets. The econometric results show that initial conditions matter, with initial household size, per capita expenditure, agricultural output, and existence of business enterprise all playing a positive role in the changes in demand for commercial fertilizer. We also find that commercial fertilizers decreases with initial commercial fertilizers, land holdings and existence of ADMARC. The results suggest that the poor may have low prospects of graduation and less involvement of ADMARC and greater participation of the private sector can help in improving the ‘potential graduation conditions’

Conceptualising Graduation from Agricultural Input Subsidies in Malawi

The government of Malawi has been implementing agricultural input subsidies since 2005/06 as an intervention aimed at improving food security among resource poor smallholder farmers. Although the issue of graduation is not articulated in the design of the programme, this study investigates the determinants of changes in the demand for commercial fertilizers in the presence of the subsidy programme. The increase in purchase of commercial fertilizers by subsidized households may indicate prospects of graduation from the subsidy programme in future. Using panel data between the 2004/05 and 2008/09 seasons, we find that 6 percent of households that did not purchase commercial fertilizer in 2004/05 could afford to purchase fertilizers commercially in subsidy years. Relative to those that never purchase fertilizers, these households tend to have higher per capita expenditure and higher values of durable assets. The econometric results show that initial conditions matter, with initial household size, per capita expenditure, agricultural output, and existence of business enterprise all playing a positive role in the changes in demand for commercial fertilizer. We also find that commercial fertilizers decreases with initial commercial fertilizers, land holdings and existence of ADMARC. The results suggest that the poor may have low prospects of graduation and less involvement of ADMARC and greater participation of the private sector can help in improving the ‘potential graduation conditions’

Gender and Intra-Household Use of Fertilizers in the Malawi Farm Input Subsidy Programme

The Farm Input Subsidy Programme targets households for subsidized farm inputs, and usually it is the head of the household who receives the coupons. Since households tend to have multiple plots which are controlled by different members of the household, there may be intra-household issues that arise in the use of farm inputs available to the household. We find that while male-headed households are more likely to receive coupons than female-headed households, there seems to be less bias in intra-household use of subsidized fertilizers (or fertilizers in households receiving subsidy) between plots controlled by female and male members. This is despite the fact that, more generally, household incomes from various sources tend to be controlled and allocated by men. It also contrasts with evidence that plots controlled by female members were less likely to be applied with fertilizers when we consider all fertilizers in subsidized and unsubsidized households

From Subsistence to Smallholder Commercial Farming in Malawi: A Case of NASFAM Commercialisation Initiative

This paper investigates the relationship between food security and commercialisation using data from a household survey in National Smallholder Farmer Association of Malawi (NASFAM) operated areas. NASFAM promotes commercialisation of agriculture by introducing the principle of farming as a business among its members who are largely smallholder subsistence farmers. The study finds that households with plenty of family labour are therefore likely to participate in NASFAM commercialisation initiatives. We also find a positive relationship between participation and value of durable assets, suggesting that wealth is an important determinant in the decision to participate in commercialisation. Household food security also increases the probability of participation, suggesting that when food markets are unstable, farmers that are not food secure may be constrained in their attempt to commercialize their farming systems. Furthermore, we find that the degree of commercialisation is negatively associated with age and household size but positively associated with food security, access to fertilizers, NASFAM business orientation and market access benefits.DfI

Repeated Access and Impacts of the Farm Input Subsidy Programme in Malawi

This paper analyses the impacts of the Farm Input Subsidy Programme (FISP) using a balanced four-year panel of 461 households from 2004/5, 2006/7, 2008/9 and 2010/11 agricultural seasons. We find evidence of economy wide and input market effects of the subsidy programme. The economy-wide effects of the subsidy programme are strong particularly due to lower maize prices and increased ganyu wage rates. The economy-wide effects of the subsidy which arise from higher ganyu wage rates, reduced time spent on ganyu, availability of maize at local level and lower prices of maize have enabled poor households to access maize when they run out of their own production. With respect to input market effects, with 2010/11 conditions and quantities of subsidised fertiliser, a 1 percent increase in subsidised fertilisers reduces commercial demand by 0.15 – 0.21 percent. However, using various welfare indicators, we find mixed results on the direct beneficiary household effects of the subsidy programme from panel data analysis and there is no overwhelming evidence on the relationship between repeated access and impacts of the subsidy. The direct beneficiary impacts on food consumption, self-assessed poverty and overall welfare are weak and mixed while there is some statistically significant evidence of positive impacts on primary school enrolment, under-5 illness and shocks. Nonetheless, the impact analysis highlights the challenges of targeting and sharing of subsidy among households, which may have implications on the direct beneficiary impacts and prospects to sustainably graduate from the programme

Evaluation of the 2010/11 farm input subsidy programme: impacts of the farm input subsidy programme in Malawi.

This paper focuses on the analysis of the impact of the Farm Input Subsidy Programme (FISP) using national level data and household survey data collected prior to FISP in 2004/05 and data collected in March – April 2011. In this data set 463 households were interviewed in both surveys and similar questions on some of the socio-economic indicators were asked during interviews to enable us to test the impact using a difference-in-difference estimator. We find evidence of economy wide and input market effects of the subsidy programme. The economy-wide effects of the subsidy programme are strong particularly due to lower maize prices and increased ganyu wage rates. With respect to input market effects, with 2010/11 conditions and quantities of subsidised fertiliser, a 1 percent increase in subsidized fertilizers reduces commercial demand by 0.15 – 0.21 percent. However, using various welfare indicators, we find mixed results on the direct beneficiary household effects of the subsidy programme from panel data analysis. Overall, there are positive impacts of the subsidy programme although some of the relationships are not statistically significant. The direct beneficiary impacts on food security, food onsumption, self-assessed poverty and overall welfare are weak and mixed while there is some statistically significant evidence of positive impacts on primary school enrolment, under-5 illness and shocks. In addition, there is some evidence of positive trends in impact indicators as the number of times a household received the subsidy in the past 6 season increases. The economy-wide effects of the subsidy which arise from higher ganyu wage rates, reduced time spent on ganyu, availability of maize at local level and lower prices of maize have enabled poor households to access maize when they run out of their own production. Nonetheless, the impact analysis highlights the challenges of targeting and sharing of subsidy among households, which may have implications on the direct beneficiary impacts

Understanding the Drivers of Food Choice to Improve Population Nutrition: An Application of Economics to Public Health

There is much to learn about what shapes people’s food choices, particularly in countries with a high burden of malnutrition. Whilst public health  policymakers and practitioners in many countries seek to address malnutrition, including through for example in Malawi with improving national  food production via large-scale agricultural input subsidy programmes, there are significant gaps in the understanding of people’s food choices and  trade-offs including in the context of such policy interventions. Considerable insight into research of the drivers of food choices and trade-offs can  be gained from both the conceptual perspectives and applied methodological techniques that are offered by the discipline of economics. Here, we  describe our current research, an example of the use of conceptualisations and methods from economics to explore drivers of food choice to  improve population  nutrition in the context of Malawi’s FISP

Challenges of Access to Farm Input Subsidy by Vulnerable Groups in Malawi

The targeting guidelines of the Farm Input Subsidy Programme (FISP) in Malawi identify special target groups as guardians looking after physically challenged persons and vulnerable groups such as child headed, female-headed or orphan headed or physically challenged-headed households and those households with infected or affected with HIV and AIDS. This paper documents experiences of communities and most vulnerable households in accessing coupons and subsidized farm inputs. The most vulnerable groups captured in the study include female-headed, child headed and elderly headed households. We find that the problems in accessing coupons were isolated while the difficulties in redeeming coupons were most severe for most households, particularly the most vulnerable groups. With respect to access to coupons the main challenges were sharing of coupons, fewer numbers of coupons relative to the number of qualifying beneficiaries, malpractices by officials and the process of identification, particularly use of identification cards. Access to subsidized inputs was more problematic due to long queues, frequent stock outs, long distances to markets and payment of tips and bribes. These raised the transaction costs and opportunity costs which most vulnerable groups could not afford. The most vulnerable households had particular challenges in finding money to redeem the coupons let alone payment of tips to purchase subsidized inputs