Transcript THE 2007/2008 AGRICULTURAL INPUT SUBSIDY PROGRAMME …

AGRICULTURAL INVESTMENT
PAY-OFFS – THE MALAWI CASE
Idrissa M. Mwale
[email protected]
Ministry of Agriculture – MALAWI.
Presentation made at
Partnership to cut hunger and poverty in Africa
Capital Street, Washnigton DC
12 May 2009
Chaired by: Dr. Derek Byerlee – Author, 2008 World
Development Report
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OVERVIEW OF MALAWI
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Malawi’ population – 13.1 million
Land area - 118,484 km2
Per capita income: US$170 (2006) – one of the lowest
Agriculture – economy agro-based
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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.
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SECTORAL POLICIES
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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
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Farm Input Subsidy Programme is one of them.
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Main Goal for ISP
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The main objective of ISP
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Improve national food security
The immediate objective
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Improve accessibility and affordability of
agricultural inputs among the most
vulnerable farmers in the country
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BACKGROUND TO FISP
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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
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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 fert
20,000 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 fert
20,000 MT tobacco fert
4,000 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 fert
20,000 MT tobacco fert
4,000 MT maize seed
1,000 MT legume seed
400 MT cotton seed
400 MT pesticides
2 x 50 kg bag
2 x 50 kg bag
1 x 2 kg pack
1.5 million
0.2 million
1.5 million
1 x 2 kg pack
0.2 million
150,000 MT maize fert
20,000 MT tobacco fert
4,000 MT maize seed
1,000 MT legume seed
400 MT cotton seed
400 MT pesticides
2 x 50 kg bag
2 x 50 kg bag
1 x 2 kg pack
1.5 million
0.2 million
1.5 million
1 x 2 kg pack
0.2 million
2008/2009
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BENEFICIARY IDENTIFICATION
Criteria for beneficiary identification include:
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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
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BENEFICIARY MATRIX
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Compilation of all farm families
 Village data
 District data
 National database
Two factors are used:
 Number of farm families
 Land area
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(Previous demand for a particular inputs)
Develop beneficiary matrix
Multi-sectoral teams established – process done in open forum
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TARGETING BENEFICIARIES
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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
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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
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Three channels are used as follows:
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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
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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
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
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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
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PVT SECTOR – CHALLENGES
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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 PROGRAM
EXPENDITURES
Description
Suppliers of fertilizer
Transporters
Actual Expenditure
US $
As a % of total
76,428,571
64
6,135,714
5
Redemption of fert.
coupons
22,857,143
Redemption of seed
Coupon
7,500,000
Operational costs
2,171,429
2
Other Costs
4,671,429
4
119,764,286
100
Total
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6
SUCCESSES OF THE PROGRAMME
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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
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SUCCESSES continued
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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
National maize production Vs requirement
4,000,000
3,500,000
Metric tonnes
3,000,000
2,500,000
2,000,000
1,500,000
Total Food
Requirement
1,000,000
500,000
Domestic
production
-
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Percentage
AGRICULTURE GROWTH
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
2003
2004
2005
2006
2007
2008
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AN EXTERNAL ASSESSMENT OF
THE ISP – FANRPAN, APRIL 2009
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Who is FANRPAN
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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
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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
Community identification criteria
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BENEFICIARY IDENTIFICATION
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70%
30%
68%
32%
identified in an open forum
reported external influence
are repeat recipients
are new beneficiaries
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TIMING OF COUPON DISTRIBUTION
AND INPUTS AVAILABILITY
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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
Walking distance
< 1km
1 to 2km
> 2km
Total
Frequency
141
179
749
1069
Percent
13.2
16.7
70.1
100.0
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MAIZE FERTILISER USE:
INTENDED VS ACTUAL
Fertiliser utilization
Maize
Tobacco
Other
Total
Number of
respondents
923
11
90
1024
Percent
90
1
9
100.0
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COMPARATIVE ANALYSIS OF
HOUSEHOLD PRODUCTION
Production (kg) 2008/2009 subsidy 2007/2008 subsidy
per household
programme
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
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FARMER CASE STUDIES
Beneficiary
No
of 2007/2008
people in production
HH
kg
in 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
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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
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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
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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.
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