Node training & common Vision Workshop April 1 st - 2nd, 2009 Pretoria, South Africa

Agricultural Input Subsidy Program

Overview Agriculture plays a vital role in economic development and is central to rural development and alleviation of poverty amongst the rural people Agricultural sector provides –Raw material to industrial sector –Creates employment –Major input in human development and economic growth

Continued The sector has been declining in recent years The Underlying causes –Adverse weather –Biological –Socio-economic –Institution and cultural constraints –Low usage of agricultural inputs –Deficiencies in farmers’ management practices

The decline in performance has lead to government, donor agencies and NGOs to initiate a number of interventions to support smallholder farmer The purpose –To increase agriculture productivity –Ensure food security

Interventions Emergency relief programs Subsidies on agricultural inputs Use of cash Seed voucher

Need to Improve Policy FANRPAN Focus: -Improving policy research, analysis and formulation on key SADC priority themes -Developing human and institutional capacity for coordinated policy dialogue among all stakeholders -Improving policy decision making by enhancing the generation, exchange and use of policy-related information Stakeholder categories: - Farmers, Government, Researchers, Private sector Members/National nodes in 13 southern African countries: Angola, Botswana, Lesotho, Namibia, Madagascar, Malawi, Mauritius, Mozambique, Namibia, South Africa, Swaziland, Zambia, Zimbabwe.

FANRPAN’s Strategic Plan (2007 – 15) Vision A food secure southern Africa free from hunger and poverty Mission To promote effective Food, Agriculture and Natural Resources (FANR) policies by –facilitating linkages and partnerships between government and civil society, –building the capacity for policy analysis and policy dialogue in southern Africa, and –supporting demand-driven policy research and analysis

FANRPAN’s Thematic Thrusts Natural Resources and Environment Food Systems Agricultural Systems HIV and AIDS

Studies Enhancing Food Security in Southern Africa: Lessons from Malawi’s Input Subsidy Programme (2008) Input Voucher study In Swaziland (2008) Input voucher study in Zambia (2008) Input Voucher study in Mozambique (2008) Input Voucher study in Lesotho (2008)

Objectives of the studies To document experiences and assess the feasibility of using input vouchers to support smallholders to improve agricultural productivity To establish, through consultative process the interest of stakeholders in Input voucher To understand the input supply program in Malawi with respect to cost and benefits To develop detailed plans and achieve commitment from stakeholder To demonstrate the potential impact of integrating relief and commercial seed and fertilizer distribution channel

Mozambique Increased purchasing power for farmers that are aware of the benefits of the agricultural inputs (seed Voucher fairs) Has allowed farmers to buy agricultural inputs of their choice Revealed farmers’ preferences and allowed suppliers to respond to farmers’ demand (improving trade) Assisted the emerging local input dealers to invest on their businesses.

Swaziland Improved food security at household level Increased participation of private sector leading to increased sales volume Increased the operational base on input dealers and created employment

Lesotho Ensured proper selection and registration of both beneficiaries and suppliers at the fairs. Voucher verification before payment has minimized fraud

Zambia Helped to open up new markets for private sector in remote areas Increased volume of business However it has been noted that if vouchers were used operation of the overall input market would be improved

Malawi Malawi has broken from what has become a norm in the Southern Africa region, commitments that are not followed through. Moved ahead with implementation of the commitments made both within – the CAADP Framework –Dar-Es-Salaam Declaration On Agriculture and Food Security in the SADC Region.

Continued 2ndly, Malawi has proved that despite the many challenges facing smallholder African agriculture, –it is possible to increase smallholder crop productivity through existing technologies. –success in maize production shows that the situation facing the rural poor is not beyond the capability of governments to address. –National food self-sufficiency can be attained through the smallholder sector

Improving Agricultural Productivity and Nutrition of Poor Rural Political resolve can contribute to food security Agriculture Share in Budget: 8.9% 6.13% 12.10% 14% The policy shift needed a financial commitment that has seen increase in agriculture budget to 14% of the national budget and 60% of it allocated to ISP. Malawi Maize production surpluses over the last five years: 2003/04 04/05 05/06 06/07 07/08 Surpluses (MT) (.2million) (.8million).5million 1.3million.5million In recognition of the above achievement –Inaugural FANRPAN Annual Food Security Policy Leadership Award presented to His Excellency Dr. Bingu wa Mutharika President of Malawi, 2008 FANRPAN Documented the Malawi Input Voucher Programme – “The Malawi Success Story”

Overall Outcome Use of vouchers have potential to integrate commercial and non-commercial input distribution systems Evidence on the increased and timely access to inputs Evidence on Increased agricultural productivity Increased purchasing power for farmers Input voucher program is a market-smart form of subsidy Increased sales volume for example in Malawi hybrid maize seed rose from 4,000mt to 6,700mt in 2006/07 Increased fertilizer application from 17% in 2005 to 30% of the rural household in 2006

Overall outcome Increased smallholder maize yield from less than 1.0mt/ha in 2005/06 to 2.03mt /ha in 2006/07 Increased maize surplus from 0.5million mt to 1.3 million mt in 2005/06 and 06/07 Between 2005 and 2006 the number of people below the poverty line in Malawi declined from 50% to 45%

Significant of Malawi Experience Malawi experience demonstrates several points that are significant for the Southern Africa region. –That the right investments done in the right way under the right circumstances can produce the desired results; –Southern Africa is not doomed to remain in food deficit; –Policy makers can make a difference; –Hunger and dependence on food aid can be reduced; and Support mechanisms for smallholder farmers can be integrated with market development – to address the dual goals of increasing agricultural productivity and developing agro-input markets.

Challenges Accurate targeting of beneficiaries Lack of monitoring of voucher beneficiaries to evaluate impact Compromise on inputs quality Late decisions leading to late delivery Uncertainty with its continuity Logistical Political interference

Need to continue Policy development is dynamic, exciting and challenging but also full of uncertainties. Policy continues to be influenced by external and internal factors and also government agenda of the time and in most cases there is no holism

A Study of the Impact of ISP Fertilizer and Hybrid Seed On Livelihood in Malawi

Back ground The Malawi government call – Evidence to support research in informing policy makers and other players in the agricultural inputs trade The need, is to build credible evidence on the –impact of the ISP fertilizer and hybrid seed on people’s livelihood –This is critical if the ISP is to influence future food security policy decisions.

Response FANRPAN has commissioned a comprehensive study – to establish the impact of the ISP fertilizer and hybrid seed on people’s livelihood in Malawi. – to capture evidence and draw lessons to inform policy direction –to contribute towards achieving improved food security at national level –to inform policy development and direction –Identify farmers and track them for three consecutive years in order to tell a complete story –

The Questionnaire Distribution of the ISP fertilizer and hybrid seed Establish criteria for selection of beneficiaries Establish how many received and where (EPA, district, regional level distribution)? Are they repeat recipients? Which years? Establish how many did not receive when they qualified and why Utilization of the ISP fertilizer and hybrid seed –What size of land was used for the ISP fertilizer and hybrid seed? Which crops were applied with the fertilizer

It has also incorporated some questions from the HVI tool. This is to address the challenges on targeting.

FANRPAN ACTION RESEARCH To inform food security policy development and direction aimed to achieve improved management of ISP Pilot and document the process of integrating the FANRPAN HVI and Input Vouchers in three countries (Lesotho, Malawi and Swaziland) Draw lessons to inform welfare support intervention practices and policies, and improve stakeholder knowledge on developing market-based instruments

Next To come up with agreed calendar to undertake similar study in Zambia, Mozambique Feedback from Nodes------

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