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AGRICULTURAL INVESTMENT AGRICULTURAL INVESTMENT PAY-OFFS – THE MALAWI PAY-OFFS – THE MALAWI

CASECASE

Idrissa M. Mwale idrissa08@gmail.com

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

World Development Report

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 agricultural production

Dominated by rain-fed maize farming. 2

SECTORAL POLICIES

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

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 smallholder farmers’ 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 economic empowerment

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VOLUME AND TARGETS YEAR INPUT PACKAGE TARGETS

2005/2006 120,000 MT maize fert20,000 MT tobacco fert

2 x 50 kg bag 2 x 50 kg bag

1.2 million 0.2 million

2006/2007 150,000 MT maize fert20,000 MT tobacco fert4,000 MT maize seed

2 x 50 kg bag 2 x 50 kg bag 1 x 2 kg pack

1.5 million 0.2 million

2007/2008 150,000 MT maize fert20,000 MT tobacco fert4,000 MT maize seed1,000 MT legume seed400 MT cotton seed400 MT pesticides

2 x 50 kg bag 2 x 50 kg bag 1 x 2 kg pack

1 x 2 kg pack

1.5 million 0.2 million 1.5 million

0.2 million

2008/2009 150,000 MT maize fert20,000 MT tobacco fert4,000 MT maize seed1,000 MT legume seed400 MT cotton seed400 MT pesticides

2 x 50 kg bag 2 x 50 kg bag 1 x 2 kg pack

1 x 2 kg pack

1.5 million 0.2 million 1.5 million

0.2 million

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BENEFICIARY IDENTIFICATION Criteria 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 beneficiaries One beneficiary per household will registered

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 subsidised

inputs International standard tendering process Coupon printing based on beneficiary matrix Coupon have serial numbers and non-

transferable

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PROCUREMENT OF INPUTS AND TRANSPORT SERVICES

Fertiliser procured under the International Competitive Bidding process – follow standard procedures

Transport services sourced locally Internal Procurement Committee

evaluate the tender documents Successful bidder sign a contract

with Government

DELIVERY & DISTRIBUTION OF INPUTS

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

warehouses in three main regions Deliver some contracted fertiliser and

retail part 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%

COUPON REDEMPTION Farmers free to use the coupons in any

recognised 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

COUPON VALUE

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YEAR FARMER CONTRIBUTION – US $

GOVERNMENT CONTRIBUTION – 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 2005/2006 season

In 2006/2007 and 2007/2008 private Sector participation was about 30%

Seed was 100% supplied by the Private Sector

Agro-dealers allowed to participate as long as they link up with the Trader

Increased input uptake among smallholder farmers

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 2008/200916

2007/2008 PROGRAM EXPENDITURES

Description Actual Expenditure

US $

As a % of total

Suppliers of fertilizer 76,428,571

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Transporters 6,135,714 5

Redemption of fert. coupons 22,857,143

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Redemption of seed Coupon 7,500,000

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Operational costs 2,171,429 2

Other Costs 4,671,429 4

Total 119,764,286 100

SUCCESSES OF THE PROGRAMME

Food security at both household and national level

Technology transfer Increased input uptake and use

among smallholder farmers Improved rural economy Promoted private sectors turn-over Improved the country’s foreign

reserves 18

SUCCESSES continued

Met and exceeded the CAADP target – 14% of national budget

Met and exceeded agriculture growth target 6% per annum

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

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AN OVERVIEW OF MALAWI’S FOOD SITUATION

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AGRICULTURE GROWTH

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AN EXTERNAL ASSESSMENT OF THE 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 evaluate progress, document & share African success stories

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Case Study Results

Distribution of the inputs Utilization of the inputs Impact of Govt. support to

smallholder farmers Marketing of production  

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DISTRIBUTION AND INPUTS AVAILABILITY

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Community identification criteria

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 DISTRIBUTION AND INPUTS AVAILABILITY

17% distributed in October 68% by November 15% distributed in December Inputs availability – 85% markets

stocked 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

MAIZE FERTILISER USE: INTENDED VS ACTUAL

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Fertiliser utilizationNumber of

respondents PercentMaize 923 90

Tobacco 11 1 Other 90 9 Total 1024 100.0

COMPARATIVE ANALYSIS OF HOUSEHOLD PRODUCTION

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Production (kg) per household

2008/2009 subsidy programme

2007/2008 subsidy programme

n/a 21.4 26.2 <100 1.3 .5 100-200 7.0 6.5 201-300 6.7 8.0 301-400 7.6 7.1 401-500 8.1 7.6 501-1000 25.3 24.5 >1000 22.6 19.7 Total 100.0 100.0

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

FARMING FIRST

Safeguarding the environment Share knowledge Builds local access Protect harvest Enable access to markets Prioritize research imperatives

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IMPACT OF ISP ON HOUSEHOLD FOOD SECURITY

65% having adequate food for the whole year while 35% needed to buy during lean period

60% had three meals per day 34% had two meals per day & 3% had

one meal per day. 75% of the households have been food

secure for 7 consecutive days of study.

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FANRPAN Food Security Policy Leadership Award

FANRPAN PRIZE Sponsor Mr. Mark Matunga of Microsoft Corporation announces his organisation’s

prize

FANRPAN Food Security Policy Leadership Award

FANRPAN PRIZE Sponsor Mr. Les Hillowitz of Croplife International announces his organisation’s prize

FANRPAN Food Security Policy Leadership Award

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

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

poverty alleviation Research Extension linkages should be

strengthened Political leadership & commitment is

necessary Collective action (private sector, govt.,

farmers and researchers) is essential for the success of programmes

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AFRICA AND ITS PARTNERS CAN DO IT!!

ZIKOMO – THANK YOU.