malawi farm input subsidy presentation

8/2/2019 Malawi Farm Input Subsidy Presentation

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AGRICULTURAL INVESTMENTAGRICULTURAL INVESTMENT

PAYPAY--OFFSOFFSTHE MALAWI CASETHE MALAWI CASE

Idrissa M. [email protected]

Ministry of Agriculture MALAWI.

Presentation made at

Partnership to cut hunger and poverty in AfricaCapital Street, Washnigton DC

12 May 2009Chaired by: Dr. Derek Byerlee Author, 2008 WorldDevelopment Report


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OVERVIEW OF MALAWI

Malawi population 13.1 million Land area - 118,484 km2

Per capita income: US$170 (2006) one of the lowest

Agriculture economy agro-based

Over 80% of export earnings

Contributes 38% GDP

Supports 85% the population

Smallholder farming (3.4 million) 75% of agriculturalproduction

Dominated by rain-fed maize farming.

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SECTORAL POLICIES

Mandate of the Ministry of Agriculture:to promote and accelerate broad-based,sustainable agricultural development

policies to enhance economic growthand contribute to poverty reduction

Farm Input Subsidy Programme is one of them.

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Main Goal for ISP

The main objective of ISP Improve national food security

The immediate objective Improve accessibility and affordability of

agricultural inputs among the most

vulnerable farmers in the country


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BACKGROUND TO FISP

Dry prolonged spells 2004/2005 season -January and February 2005.

Reduced maize production average yield

dropping to 0.8 tons per ha. Total maize production reduced to 1.22

million tons, approx 60% of the estimated

national maize food requirement.

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BACKGROUND TO FISP - cont

Government decision improve smallholderfarmers access to inputs

Fertilizer and improved hybrid and OPV maize

seed to improve food security Tobacco farmers to improve rural economies

Legume (Groundnuts, soya, beans) for

household nutrition and economicempowerment

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BENEFICIARY IDENTIFICATIONCriteria for beneficiary identification include:-

A Malawian that owns a piece of land Vulnerable household, with low purchasing power Guardian looking after physically challenged persons who are unable to

farm

Hard working household Adopter of new technologies Resident of the village The vulnerable group child headed household, female headed

household, elderly but hard working household

A combination of this is used in identifying the beneficiariesOne beneficiary per household will registered


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BENEFICIARY MATRIX

Compilation of all farm families

Village data

District data

National database

Two factors are used: Number of farm families

Land area

(Previous demand for a particular inputs)

Develop beneficiary matrix

Multi-sectoral teams established process done in open forum

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TARGETING BENEFICIARIES

Use coupons to reach out to the beneficiaries Promotes transparency and accountability

As a control measures

Minimises parallel markets of the subsidisedinputs

International standard tendering process

Coupon printing based on beneficiary matrix Coupon have serial numbers and non-transferable

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PROCUREMENT OF INPUTSAND TRANSPORT SERVICES

Fertiliser procured under theInternational Competitive Biddingprocess follow standard procedures

Transport services sourced locally

Internal Procurement Committee

evaluate the tender documents Successful bidder sign a contract with

Government


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DELIVERY & DISTRIBUTIONOF INPUTS

Three channels are used as follows: Deliver the fertiliser to designated

warehouses in three main regions

Deliver some contracted fertiliser and retailpart through the existing outlets

Retail all the contract through the existing

retail outlets Most of the fertiliser is imported by the

private sector over 80%


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COUPON REDEMPTION

Farmers free to use the coupons in anyrecognised retail shop

The Traders collects the top-up from the

farmer and the coupon Submit the coupons together with an invoice

to the Ministry

Payment based on submitted coupons only


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COUPON VALUE

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YEAR FARMERCONTRIBUTION US $

GOVERNMENTCONTRIBUTION US $

2005/2006 10 14

2006/2007 7 18

2007/2008 6 29

2008/2009 6 57


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PVT SECTOR PARTICIPATION

Not involved in distribution in 2005/2006season

In 2006/2007 and 2007/2008 private Sectorparticipation was about 30%

Seed was 100% supplied by the PrivateSector

Agro-dealers allowed to participate as long

as they link up with the Trader Increased input uptake among smallholder

farmers


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PVT SECTOR CHALLENGES

Did not cover rural areas concentrated in towns

Demanded an upfront payments

In efficiency

Exploited the smallholder farmes

exchange coupons for something else Were left out in 2008/2009

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2007/2008 PROGRAMEXPENDITURES

Description Actual Expenditure

US $

As a % of total

Suppliers of fertilizer 76,428,571 64

Transporters 6,135,714 5

Redemption of fert.coupons

22,857,14319

Redemption of seedCoupon

7,500,0006

Operational costs 2,171,429 2

Other Costs 4,671,429 4

Total119,764,286

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SUCCESSES OF THE PROGRAMME

Food security at both household andnational level

Technology transfer

Increased input uptake and use amongsmallholder farmers

Improved rural economy Promoted private sectors turn-over

Improved the countrys foreign reserves18


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SUCCESSES continued

Met and exceeded the CAADP target 14% of national budget

Met and exceeded agriculture growthtarget 6% per annum

Increased national productivity from

800 kg per ha to 2250 kg per ha

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AN OVERVIEW OF MALAWISFOOD SITUATION

20Increased national productivity from 800 kg per ha to 2250 kg per ha


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AGRICULTURE GROWTH

21Met and exceeded agriculture growth target 6% per annum


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AN EXTERNAL ASSESSMENT OFTHE ISP FANRPAN, APRIL 2009

Who is FANRPAN Regional policy research and advocacy

network (farmers, government, private

sector and researchers) www.fanrpan.org

Objectives: the need to evaluateprogress, document & share Africansuccess stories

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Case Study Results

Distribution of the inputs Utilization of the inputs

Impact of Govt. support to smallholderfarmers

Marketing of production

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DISTRIBUTION AND INPUTSAVAILABILITY

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Community identification criteria


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BENEFICIARY IDENTIFICATION

70% identified in an open forum 30% reported external influence

68% are repeat recipients 32% are new beneficiaries

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TIMING OF COUPON DISTRIBUTIONAND INPUTS AVAILABILITY

17% distributed in October 68% by November

15% distributed in December

Inputs availability 85% marketsstocked in time

There were also commercial sales

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DISTANCE TO NEAREST MARKET

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Walking

distance Frequency Percent

< 1km 141 13.2

1 to 2km 179 16.7

> 2km 749 70.1

Total 1069 100.0


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MAIZE FERTILISER USE:INTENDED VS ACTUAL

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Fertiliser utilization

Number of

respondents Percent

Maize 923 90Tobacco 11 1

Other 90 9

Total 1024 100.0


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COMPARATIVE ANALYSIS OFHOUSEHOLD PRODUCTION

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Production (kg)per household

2008/2009 subsidyprogramme

2007/2008 subsidyprogramme

n/a 21.4 26.2

1000 22.6 19.7

Total 100.0 100.0


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FARMER CASE STUDIES

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Beneficiary

No of

people in

HH

2007/2008

production in

kg

2008/2009

production in kg Change

Raphael Chirwa 4 500 1500 1000

Grace Nkhata 5 0 300 300

Weston Kawani 5 1700 1850 150

Elliot Fika 8 0 750 750

Martin

Chiputula 5 100 250 150


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FARMING FIRST

Safeguarding the environment Share knowledge

Builds local access

Protect harvest

Enable access to markets

Prioritize research imperatives

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FANRPAN Food Security Policy Leadership Award

FANRPAN PRIZE SponsorMr. Mark Matunga of Microsoft Corporation announces his organisations prize


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FANRPAN PRIZE SponsorMr. Les Hillowitz of Croplife International announces his organisations prize


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2008 FANRPAN POLICY LEADERSHIP PRIZE WinnerHis Excellency Dr. Bingu wa Mutharika President of the Republic of Malawi


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CONCLUSION

There is need to have right policies in place Investment in agriculture is the key to poverty

alleviation

Research Extension linkages should bestrengthened

Political leadership & commitment is necessary

Collective action (private sector, govt., farmersand researchers) is essential for the success ofprogrammes

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AFRICA AND ITSPARTNERS CAN DO IT!!

ZIKOMO THANK YOU.

malawi farm input subsidy presentation

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