No. 18: The State of Food Insecurity in Blantyre City, Malawi

Chronic food insecurity is considered to be one of the most important challenges facing the people and government of Malawi. Most attention tends to be given to the rural areas where the majority of the population live and where the prevalence of food insecurity is highest. However, Malawi is urbanizing at a rapid rate and those who move to the cities do not automatically become food secure. Urban food insecurity is likely to increase and therefore it is important for policy-makers to begin to think about this issue. AFSUN’s study of food insecurity in the city of Blantyre, Malawi’s industrial hub, formed part of its baseline survey of 11 Southern African cities. The study established that household dietary diversity is very low with most consuming a monotonous diet dominated by grain foods, especially maize. While the dependence on maize and its availability on the market means that absolute levels of food insecurity are lower here than in many other cities surveyed by AFSUN, there is also a clear seasonality to food security that coincides with the rural agricultural cycle. When maize prices rise, households immediately feel the pinch and levels of insecurity rise. Female-centred households, households with large family sizes, households that have lost a breadwinner through death, households with a sick member, and low-income households are more food insecure than the rest

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

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

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

Evaluation of the 2012/13 Farm Input Subsidy Programme, Malawi: Final Report

This report evaluates the 2012/13 Malawi Government Farm Input Subsidy Programme (FISP). The main objective of the evaluation is to assess the impact and implementation of the FISP in order to provide information regarding • the overall value for money of investments in the FISP as regards its contributions to agricultural production, food security, farmers’ and consumers’ welfare • means by which future implementation of the FISP might be changed in order to improve its effectiveness and efficiency We consider in turn the two main questions that the report addresses, beginning with the overall contributions and value for money from the FISP. The FISP medium term plans sets out the objectives of the FISP as being to ‘increase food security at household level through agricultural output growth’ by increasing agricultural productivity and input market development. However economic theory and experience from other countries suggests that if implemented consistently, effectively and efficiently at a manageable cost the programme has the potential to drive broad based national economic growth and diversification by raising the productivity of the agricultural land and labour held by the large rural population, lowering food prices, raising real wages, and stimulating non-agricultural demand and supply. This depends upon the ability of the programme to cost effectively increase seed and fertiliser input use in maize production, drive up maize productivity and improve input supply services (the direct impacts of the programme) with the support of complementary policies that support low maize prices, rising real wages and rural diversification (the indirect impacts of the programme). Increases in production and maize productivity as a result of the programme are difficult to assess. Bringing together evidence from a wide range of sources, section 7 of the report suggests that the programme led to increased production of around 723,000MT of maize and 32,000MT of legumes. Malawi’s rapidly growing population means that the programme’s incremental production benefits are increasingly important for Malawi’s national food security. These benefits are however undermined by likely informal exports (despite an export ban) encouraged by pressures from the relatively low dollar denominated maize prices in Malawi following the major devaluation of the Kwacha. The programme also led to increased profitability of maize production by beneficiary households and increased rural incomes by between MK50,000 and MK70,000per household receiving and using a full pack of fertiliser and maize seed (ignoring spillover effects and benefits from receipt of fertiliser that does not contribute to incremental production).For many poorer beneficiaries, who receive only one coupon for 50 kg of fertiliser, it seems that benefits are only sufficient to reduce their food insecurity, and are not enough to enable them to advance their livelihoods – to ‘step out’ or ‘step up’ rather than just ‘hang in’. Addressing this in the context of both limited fiscal resources and rapidly growing population pressure is a major challenge facing the programme and the Government and country as a whole. There is, however, evidence that the FISP is encouraging some diversification out of maize into increased legume production. Assessment of the potential wider indirect impacts of the programme (addressed in section 8) requires comparison of situations with and without the subsidy. A Local Economy Wide Impact Evaluation (LEWIE) model, a novel form of CGE modelling, investigating this suggests that there are significant spillover local growth effects from the subsidy as a result of both its injection of cash into the economy and of the increase in real incomes caused by its raising land and labour productivity. However real wage rates fell during 2012/13 as a result of rising maize prices, which, as mentioned above, have been affected by the devaluation of the Malawi Kwacha and consequent export and inflationary pressures. It is not possible to estimate possible effects of FISP in reducing the extent of the fall in wages. These wider influences on maize prices pose a major challenge to the welfare of poor Malawians and to the Malawian economy, with or without the FISP. Policies that address this and promote low and stable domestic maize prices are essential for FISP to deliver improved food security and the wider growth benefits outlined above – and some specific options are suggested. The overall benefit cost ratio (BCR) for the FISP is estimated at 1.7taking account of only direct impacts, and at1.8if wider indirect impacts are also included. Fiscal efficiency (the ratio of net economic benefits to government expenditure) is estimated at 0.75for direct impacts and 1.04 including indirect impacts. Analysis of national food security scenarios with and without the FISP suggests that in the last 6 years it may have led to average annual savings of maize imports of some 385,000MT, directly offsetting up to between 85 and 110% of programme costs. Benefit cost ratio estimates are however sensitive to some of the parameters used in their calculation, notably maize prices, incremental maize productivity, and fertiliser costs. The Fiscal Efficiency of the programme and its overall cost are also affected by likely high rates of input leakage and of displacement of unsubsidised farmer purchases by subsidised inputs, and by the subsidy rate and low farmer contributions. The importance of low and stable maize prices for programme benefits has been discussed above. More attention to these issues in the implementation of the programme could lead to substantial increases in the effectiveness and efficiency of the programme with increased benefits and/or reduced costs. Analysis of determinants of maize productivity shows that yields are generally increased by early planting, early and good weeding, use of hybrid seed, use of inorganic nitrogenous fertiliser and of phosphate where soils are phosphate deficient, and use of organic fertilisers. Returns to use of inorganic fertiliser are also increased by use of hybrid seed, use of organic fertiliser, and higher plant density. Gains from using subsidised inorganic fertiliser and hybrid seed may also be substantially reduced if use of subsidised inputs leads to delays in planting. These observations, which are widely known, underpin many aspects of the design and implementation of the FISP, for example the increasing provision of hybrid and legume seeds in the subsidy package, the intention to provide coupons and inputs early in the season (with priority given to the south, then centre then north), and the inclusion of both nitrogenous and compound fertilisers. Analysis of the implementation of the programme in section 4 and of the timing of receipt of coupons by households in section 6 shows that a number of reasons (some of them beyond the immediate control of programme management) have led to late access to coupons and inputs – and this tends to raise costs and increase displacement as well as reduce yields. Incremental production is also affected by displacement rates and by leakages of inputs through theft and corruption. Programme costs have been held in check from 2009/10 with much better physical control of quantities of subsidised fertilisers. As noted in section 4, there are opportunities for reducing fertiliser procurement costs (and improving timeliness of delivery) through modified tender and payment procedures. Programme costs could also be reduced by increasing farmer contributions as a proportion of input costs, and there is a difficult balance here between on the one hand supporting those who can least afford inputs and benefit most from a high rate of subsidy, and on the other hand reducing overall programme costs. A third way of reducing programme costs and/or increasing benefits is to reduce displacement and leakage, with improved security of coupons (where there has been substantial improvements in 2011/12 and 2012/13); better transport tendering and monitoring procedures (the latter building on approaches trialled with ESOKO in 2012/13); more timely input delivery, market opening and coupon distribution; and better targeting of inputs to poorer farmers unable to afford unsubsidised inputs. Increased farmer contributions may also decrease the incentives for theft, corruption and leakage. Determination of more precise numbers of farm families and (building on useful innovations in 2012/13) greater farmer access to and understanding of publicly available beneficiary lists could also improve targeting outcomes and accountability and control of coupons. Greater use of use of such systems will, however, have to take account of the support for and benefits from the widespread ‘sharing’ of coupons in the Central and Southern Regions. Increasing attention to matters of accountability, access to coupons, and conditions at markets are to be welcomed and will no doubt be built on as more information becomes available on their strengths and weaknesses. Despite its high cost, the FISP is making a positive set of contributions to the welfare of Malawians, and this represents a considerable achievement by all those involved in its resourcing, design and implementation in challenging conditions. These contributions are however threatened by macroeconomic pressures; by high and increasing population pressure in rural areas; by the high visibility of instances of late implementation, corruption and theft; by evidence of poor targeting; and by political and economic pressures. These contributions and these pressures call for renewed efforts to both work for and demonstrate improved efficiency and effectiveness and increased benefits and probity of the programme. In order to facilitate wider and better informed debate around the FISP, this report will be supplemented by two short policy briefing papers summarising key issues raised regarding FISP implementation and impacts. The value of this report is, however, that it brings together in one place a comprehensive review of the programme. Readers are advised to refer to those sections that are of direct interest and not be put off by the size of the report as a whole. The ‘summary and conclusions’ section at the end of the report contains a longer and more detailed summary of the report

Happiness and Alleviation of Income Poverty : Impacts of an Unconditional Cash Transfer Programme using a Subjective Well-Being Approach

This study analyzes the impact of an exogenous, positive income shock on caregivers’ subjective well-being in Malawi using panel data from 3,365 households targeted to receive Malawi’s Social Cash Transfer Programme that provides unconditional cash to ultra-poor, labour-constrained households. The study consists of a cluster-randomized, longitudinal design. After the baseline survey, half of these village clusters were randomly selected to receive the transfer and a follow-up survey was conducted 17 months later. Utilizing econometric analysis and panel data methods, we find that household income increases from the cash transfer can have substantial subjective well-being gains among caregivers. Households use the cash to improve their families’ livelihoods, ensuring provision of their basic needs including food, shelter, and clothing. Reduction of these daily stresses makes caregivers happier about their current situations and gives them hope that the future will continue to get better

Social networks, social participation, and health among youth living in extreme poverty in rural Malawi

Extensive research documents that social network characteristics affect health, but knowledge of peer networks of youth in Malawi and sub-Saharan Africa is limited. We examine the networks and social participation of youth living in extreme poverty in rural Malawi, using in-depth interviews with 32 youth and caregivers. We describe youth’s peer networks and assess how gender and the context of extreme poverty influence their networks and participation, and how their networks influence health. In-school youth had larger, more interactive, and more supportive networks than out-of-school youth, and girls described less social participation and more isolation than boys. Youth exchanged social support and influence within their networks that helped cope with poverty-induced stress and sadness, and encouraged protective sexual health practices. However, poverty hampered their involvement in school, religious schools, and community organizations, directly through lack of required material means, and indirectly by reducing time and emotional resources and creating shame and stigma. Poverty alleviation policy holds promise for improving youth’s social wellbeing and mental and physical health by increasing their opportunities to form networks, receive social support, and experience positive influence