1
FISP 2012/13
Evaluation
Workshop
Wednesday, 11th September 2013
Andrew Dorward, Ephraim Chirwa,
Mirriam Matita, Wezi Mha...
Outline
 What are the impacts of FISP?
 Is FISP worth the investment?
 How much of the subsidy goes to the intended
ben...
What are the impacts of FISP?
 Incremental production
 National food security
 Maize prices
 Beneficiary production
 ...
Incremental production
 Depends on Information?
 Incremental input use
Input disbursement R
Leakage/ theft (0-30%) ?
...
Incremental maize production
 Difficult to obtain reliable information on smallholder
yields and yield responses
 Data s...
Crop simulation
 New information from commissioned maize simulation study
under smallholder conditions (Anthony Whitbread...
Illustrative N Response, hybrid
without & with P
7September 2013
Illustrative N Response, local
without & with P
8September 2013
Simulated yield response
 Importance of
 hybrid seed
 early planting
 good agronomy
 potential for lower N rates
 va...
Total incremental maize production (MT)
10September 2013
Seed
displace-
ment
NUE
Fertiliser displacement &
leakage
Reduced...
National food security: consumption,
production & surplus/deficit with subsidy
11
-1300
-300
700
1700
2700
3700
'000MT
Tot...
National food security: consumption,
production & surplus/deficit with subsidy
12
-1300
-300
700
1700
2700
3700
'000MT
Tot...
National food security: consumption,
production & surplus/deficit with subsidy
13
-1300
-300
700
1700
2700
3700
'000MT
Tot...
National food security: consumption,
production & surplus/deficit with subsidy
14
-1300
-300
700
1700
2700
3700
'000MT
Tot...
15
National food security: consumption,
production & surplus/deficit without subsidy
-1300
-300
700
1700
2700
3700
'000MT
...
National food security
 Value of saved imports from 2007/8 to 2013/14 market
seasons between 33% and 43% of FISP programm...
Maize markets & prices: Malawi
17September 2013
0
20
40
60
80
100
120
140
160
2000Aug
2001Apr
2001Dec
2002Aug
2003Apr
2003...
Regional maize markets & prices
18September 2013
0
0.1
0.2
0.3
0.4
0.5
0.6
2000Aug
2001Apr
2001Dec
2002Aug
2003Apr
2003Dec...
0
0.1
0.2
0.3
0.4
0.5
0.6
2008Apr
2008Jul
2008Oct
2009Jan
2009Apr
2009Jul
2009Oct
2010Jan
2010Apr
2010Jul
2010Oct
2011Jan
...
Regional maize exports
 Early season regional maize exports pose a serious
challenge
 to national & household food secur...
Beneficiary food security
Food production
 Maize (incremental production)
 500 to 600kg maize from 2 fertiliser coupons ...
Beneficiary income growth
 Maize (incremental production)
High value to cost ratios for subsidised inputs (70+ for
ferti...
Indirect benefits
 Cash injections
 Incremental maize - sales or savings
 Coupon sales (limited)
 Savings from coupons...
Input supply impacts
 Expect
 Increase in business supplying subsidised inputs
 Decrease in commercial sales due to dis...
Input supply impacts
 Substantially more suppliers report expansion than
contraction in number of sales outlets in the la...
Input supply system:
farmer seed purchases
26September 2013
-
1.00
2.00
3.00
4.00
5.00
6.00
Hybrid& OPV
-Commercial
Hybrid...
Input supply system: farmer
commercial fertiliser purchases
27September 2013
0
10
20
30
40
50
60
70
2006/07
2008/09
2010/1...
Is FISP worth the investment?
28September 2013
Before
displacement
& leakage
After
displacement &
leakage (30%)
With
multi...
Returns to FISP: fertiliser price effects
29September 2013
-
1.00
2.00
3.00
4.00
5.00
6.00
-
50,000,000
100,000,000
150,00...
Returns to FISP: Displacement &
leakage effects
30September 2013
-
1.00
2.00
3.00
4.00
5.00
6.00
1,400
sts
2.50
3.00
-
0.5...
Returns to FISP: yield response effects
31September 2013
-
1.00
1,400
sts
-
0.50
1.00
1.50
2.00
2.50
3.00
60%
ts
-
0.50
-
...
Returns to FISP:
farmer contribution effects
32September 2013
-
1.00
-
50,000,000
- 200 400 600 800 1,000 1,200 1,400
Feti...
How much of the subsidy goes to
the intended beneficiaries?
 How much of the inputs goes to smallholder farmers?
 Leakag...
Leakages
34September 2013
Fertiliser
Maize
seed
Legume
seed
Fertiliser coupons
2010/11 2008/9 2006/7
Estimate as % redempt...
Numbers of farm families?
35September 2013
-
0.5
1.0
1.5
2.0
2.5
2005 2006 2007 2008 2009 2010 2011 2012
Farm famillies (m...
Numbers of farm families?
36September 2013
-
0.5
1.0
1.5
2.0
2.5
-10%
-5%
0%
5%
10%
15%
20%
25%
2005-6 2006-7 2007-8 2008-...
Targeting
37September 2013
2012/13 2010/11 2008/9 2006/7
Zero
>0
&<1
1
Mean
/
recipi
ent
Zero
Mean/
recipi
ent
Zero
Mean
/...
Targeting
 Stated targeting criteria
 resource poor Malawians owning land
 explicit emphasis on more vulnerable househo...
Targeting
39September 2013
2012/13 2010/11 2008/9 2006/7
Zero
>0
&<1
1
Mean
/
recipi
ent
Zero
Mean/
recipi
ent
Zero
Mean/
...
Targeting
40September 2013
2012/13 2010/11 2008/9
Zero
>0
&<1
1
Mean/
recipie
nt
Zero
Mean/
recipie
nt
Zero
Mean/
recipie
...
Targeting – respondent views
41September 2013
 Poor people, female headed hh, more productive
farmers, households with or...
How can the implementation of FISP be
improved?
 Key determinants of impacts and return to investment?
 Leakages & displ...
Leakages & displacement
 Further changes?
Sort out the number of farm families & rural households
Transporter vetting &...
Leakages & displacement
 FGD proposals
More participation
Sealed coupon packages opened at village meetings?
Marked fe...
Targeting: allocations, distribution &
access
 Good targeting should promote:
 Low diversion / losses
 Low displacement...
0.0
0.5
1.0
1.5
2.0
2.5
2005/6 2006/7 2007/8 2008/9 2009/102010/112011/122012/13
North Centre South All
0.0
0.5
1.0
1.5
2....
Area targeting: beneficiaries per farm
family by district
47September 2013
0%
10%
20%
30%
40%
50%
60% Chikhwawa
Nsanje
Lil...
Targeting
 Further changes?
E vouchers
Universal allocation but smaller amount per beneficiary
Further & earlier trans...
Yield responses
 Further potential changes to improve yield responses
 Improving data on yield responses?
 Improving ti...
Programme costs
50September 2013
0
50
100
150
200
250
300
2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13
US$ million...
0
50
100
150
200
250
300
2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13
US$ millions
Total estimated other costs
Oth...
0
50
100
150
200
250
300
2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13
US$ millions
Total estimated other costs
Oth...
Farmer contributions
 Farmer contributions have fallen since establishment of
FISP from around 35% to 3% of fertiliser co...
Programme costs
 Changes implemented to date
 Physical budget control
 Financial budget control
 Supplementary coupon ...
55
Thank you
This material has been funded by UKaid from the Department for International
Development; however the views e...
Leakages & displacement
 Challenges
 High value of inputs & of subsidy
 Fake coupons
 Supplementary coupons & diversio...
Leakages & displacement
 Changes implemented to reduce leakages &
displacement
 No supplementary coupons
 Better coupon...
Household targeting
 Challenges (see earlier slides)
 Little evidence of targeting reaching the poor &
vulnerable – but ...
Yield responses
 Challenges
 Data on actual yield responses
 Improving timing of coupon and input delivery &
access
Te...
Yield responses
 Changes implemented to improve yield responses
 Improving data on yield responses
 Improving timing of...
Programme costs
 Challenges
 Very large scale of programme, national budget &
fiscal macroeconomic impacts
 Multiple st...
62
Coordination
& control
Payments &
control
Stakeholders
FARMERS
MoAFS: HQ, LU, ADDs,
DADOs, ASs, FAs
DCs, TAs, VDCs, Pol...
7
8
9
10
11
12
Fertiliser
tenders
Voucher
allocations
Transport
tenders
Voucher
printing
Voucher &
lists to
districts
Seed...
Depot receipts timing,
% parastatal fertiliser sales
64September 2013
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
End Sept...
Uplifts timing, % total by month
65September 2013
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
End Sept % End Oct % End Nov...
Diversion?
 Transport losses?
 No of companies commissioned
2008/09 23
2009/10 26
2010/11 25
2011/12 23
2012/13 43
 Log...
Outstanding invoice payments
by season
67September 2013
0%
10%
20%
30%
40%
50%
60%
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14...
Tendering
 Initial tender call March 2012 opened in May
 Second call July 2012 awarded mid September
68July 2013
740
760...
0
100
200
300
400
500
600
700
800
900
1,000
2009 2010 2011 2012
Price US$/MT
NPK, landed in depots Urea, landed in depots
...
Total fertiliser voucher redemptions
(millions)
70July 2013
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
2005/6 2006/7 2007...
71September 2013
Targeting: scale of fertiliser sales
0
50
100
150
200
250
2005/6 2006/7 2007/8 2008/9 2009/102010/112011/...
72September 2013
0
2
4
6
8
10
12
0
50
100
150
200
250
2005/6 2006/7 2007/8 2008/9 2009/102010/112011/122012/13
Seed sales
...
Malawi maize trade information
73September 2013
0
50
100
150
200
250
300
350
400
450
2000200120022003200420052006200720082...
Beneficiary welfare, education, nutrition,
health
 Improved school attendance, diet, health mentioned in
some FGDs
 Past...
Input supply impacts: fertiliser
procurement from private co. & parastatals
75September 2013
0%
10%
20%
30%
40%
50%
60%
70...
Input supply system
76September 2013
42.6
31.6
39.8
62.5
20.4
24.2
18.6
12.5
37.0
44.2
41.5
25.0
0.0
10.0
20.0
30.0
40.0
5...
Input supply system
77September 2013
Distribut
or /
Importe
r
ADMAR
C /
SFFRFM
Independ
ent Agro-
Dealers
Other
Supplier
s...
78September 2013
Indicators Seed sales Fertiliser Sales
Reasons for Increase
Higher farmer income, can procure more
suppli...
Targeting
79September 2013
Fertiliser Coupon numbers
per hh
Zero
>0
&<1
1
More
than 1
Owned Area in ha 0.90 0.88 0.94 1.16...
Information sources
 Implementation reports (predominantly Logistics Units
weekly reports and annual report),
 Coupon ac...
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Evaluation of the Fertiliser Input Subsidy Programme in Malawi

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Evaluation of the Fertiliser Input Subsidy Programme in Malawi

  1. 1. 1 FISP 2012/13 Evaluation Workshop Wednesday, 11th September 2013 Andrew Dorward, Ephraim Chirwa, Mirriam Matita, Wezi Mhango, Peter Mvula School of Oriental and African Studies, University of London Wadonda Consult
  2. 2. Outline  What are the impacts of FISP?  Is FISP worth the investment?  How much of the subsidy goes to the intended beneficiaries?  How can the implementation of FISP be improved? 2September 2013
  3. 3. What are the impacts of FISP?  Incremental production  National food security  Maize prices  Beneficiary production  Beneficiary food security (hanging in)  Beneficiary income growth (stepping up)  Beneficiary welfare, education, nutrition, health  Cash injection  Ganyu wages  Maize prices  Non-beneficiary income growth & welfare (stepping up)  Diversification (stepping out)  Knowledge  Input supply system  Resilience 3September 2013 Maize exports Population growth Poor rainfall Economic crises
  4. 4. Incremental production  Depends on Information?  Incremental input use Input disbursement R Leakage/ theft (0-30%) ? Displacement (3, 15, 22%) ? Targeting, prices  Incremental yields per unit input ? Rainfall ? Soils ? Crop management ? Crop variety ? 4September 2013
  5. 5. Incremental maize production  Difficult to obtain reliable information on smallholder yields and yield responses  Data sources  Input response On farm trials, 92 kg N/ha 5 bags fertiliser/ha Hybrid: 13 to 22 kg/kg N, mean 17 Survey analysis (IHS3) ? Yield measurement ? Crop simulation – varies with crop management  Crop management Survey analysis (AISS2, IHS3,AISS3) 5September 2013
  6. 6. Crop simulation  New information from commissioned maize simulation study under smallholder conditions (Anthony Whitbread et al, Goettingen University)  Realistic results  Average yields a little bit higher than IHS3 under similar management  Identifies critical yield factors 6September 2013
  7. 7. Illustrative N Response, hybrid without & with P 7September 2013
  8. 8. Illustrative N Response, local without & with P 8September 2013
  9. 9. Simulated yield response  Importance of  hybrid seed  early planting  good agronomy  potential for lower N rates  variable returns to N  Good potential returns to N and impact  Nutrient responses with average smallholder management  Local 18 kg grain/kg N (@37 kg N/ha)  Hybrid 22 kg grain/kg N (@47 kg N/ha)  Hybrid without fertiliser + 600kg/ha 9September 2013
  10. 10. Total incremental maize production (MT) 10September 2013 Seed displace- ment NUE Fertiliser displacement & leakage Reduced Hybrid Local 10% 30% 45% 40% -10% 22.1 17.5 1,161,772 933,559 762,400 -20% 19.6 15.5 1,032,686 829,830 677,689 -30% 17.2 13.6 903,600 726,102 592,978 50% -10% 22.1 17.5 1,139,302 911,090 739,931 -20% 19.6 15.5 1,012,713 809,858 657,716 -30% 17.2 13.6 886,124 708,625 575,502 60% -10% 22.1 17.5 1,116,833 888,621 717,461 -20% 19.6 15.5 992,740 789,885 637,743 -30% 17.2 13.6 868,648 691,149 558,025
  11. 11. National food security: consumption, production & surplus/deficit with subsidy 11 -1300 -300 700 1700 2700 3700 '000MT Total consumption
  12. 12. National food security: consumption, production & surplus/deficit with subsidy 12 -1300 -300 700 1700 2700 3700 '000MT Total consumption Production (MT)
  13. 13. National food security: consumption, production & surplus/deficit with subsidy 13 -1300 -300 700 1700 2700 3700 '000MT Total consumption Production (MT) Domestic surplus (deficit) with subsidy (MT)
  14. 14. National food security: consumption, production & surplus/deficit with subsidy 14 -1300 -300 700 1700 2700 3700 '000MT Total consumption Production (MT) Domestic surplus (deficit) with subsidy (MT) Incremental production from subsidy (MT)
  15. 15. 15 National food security: consumption, production & surplus/deficit without subsidy -1300 -300 700 1700 2700 3700 '000MT Total consumption Production without subsidy Domestic surplus (deficit) without subsidy (MT)
  16. 16. National food security  Value of saved imports from 2007/8 to 2013/14 market seasons between 33% and 43% of FISP programme costs depending on the use of domestic or SAFEX import prices for valuing maize imports.  Analysis does not allow for  benefits of more local access to maize  dangers of reliance on often late imports  long term social, economic and health costs of periods of widespread food shortages and high prices.  Analysis also ignores  wider economic benefits from FISP  seasonal regional export market challenges to FISPs role in supporting national food security (but this threatens national food security with or without FISP) 16September 2013
  17. 17. Maize markets & prices: Malawi 17September 2013 0 20 40 60 80 100 120 140 160 2000Aug 2001Apr 2001Dec 2002Aug 2003Apr 2003Dec 2004Aug 2005Apr 2005Dec 2006Aug 2007Apr 2007Dec 2008Aug 2009Apr 2009Dec 2010Aug 2011Apr 2011Dec 2012Aug 2013Apr Current MK/kg 0 0.1 0.2 0.3 0.4 0.5 0.6 2000Aug 2001Apr 2001Dec 2002Aug 2003Apr 2003Dec 2004Aug 2005Apr 2005Dec 2006Aug 2007Apr 2007Dec 2008Aug 2009Apr 2009Dec 2010Aug 2011Apr 2011Dec 2012Aug 2013Apr Current US$/kg Monthly Malawi domestic prices in Malawi Kwacha & in US$ equivalents
  18. 18. Regional maize markets & prices 18September 2013 0 0.1 0.2 0.3 0.4 0.5 0.6 2000Aug 2001Apr 2001Dec 2002Aug 2003Apr 2003Dec 2004Aug 2005Apr 2005Dec 2006Aug 2007Apr 2007Dec 2008Aug 2009Apr 2009Dec 2010Aug 2011Apr 2011Dec 2012Aug 2013Apr Current US$/kg) Malawi SAFEX-0.1
  19. 19. 0 0.1 0.2 0.3 0.4 0.5 0.6 2008Apr 2008Jul 2008Oct 2009Jan 2009Apr 2009Jul 2009Oct 2010Jan 2010Apr 2010Jul 2010Oct 2011Jan 2011Apr 2011Jul 2011Oct 2012Jan 2012Apr 2012Jul 2012Oct 2013Jan 2013Apr Current US$/kg Malawi Nampula Lusaka Tete 0 0.1 0.2 0.3 0.4 0.5 0.6 2000Aug 2001Apr 2001Dec 2002Aug 2003Apr 2003Dec 2004Aug 2005Apr 2005Dec 2006Aug 2007Apr 2007Dec 2008Aug 2009Apr 2009Dec 2010Aug 2011Apr 2011Dec 2012Aug 2013Apr Current US$/kg) Malawi SAFEX SAFEX-0.1 Regional maize markets & prices 19September 2013
  20. 20. Regional maize exports  Early season regional maize exports pose a serious challenge  to national & household food security  to FISP food security benefits  Options?  Export ban  Consistent ‘rules’  Better crop estimates  Encourage private sector storage Options? Relieve credit costs/ constraints 20September 2013
  21. 21. Beneficiary food security Food production  Maize (incremental production)  500 to 600kg maize from 2 fertiliser coupons & 1 seed coupon  200 to 300kg maize from 1 fertiliser coupons (without or with seed)  Legumes seed coupon (total production)  20 kg beans & gnuts  30 kg soya  100 kg cowpeas  200kg pigeon pea  Focus group discussions  No gain  Removing it will be like murdering us  Hanging in despite population growth & shocks? 21September 2013
  22. 22. Beneficiary income growth  Maize (incremental production) High value to cost ratios for subsidised inputs (70+ for fertiliser, 150 for hybrid seed Full maize pack MK55,000 to 75,000 One fertiliser coupon (without or with seed) MK20,000 to 25,000  Focus group discussions Mentioned income benefits & asset accumulation for better off hh with more land & more coupons (stepping up) 22
  23. 23. Indirect benefits  Cash injections  Incremental maize - sales or savings  Coupon sales (limited)  Savings from coupons displacing commercial purchases  Increases in real ganyu wages & decreases in real maize prices relative to counter-factual  Multiplier effects in the national & rural economies  Resilience (direct & indirect) 23September 2013
  24. 24. Input supply impacts  Expect  Increase in business supplying subsidised inputs  Decrease in commercial sales due to displacement  Increase in commercial sales from stimulus  Fertiliser procurement from private companies  Initially 50%, 80% last two years  Initially 50-70,000MT, >100,000Mt last two years  Seed displacement estimated at 50%  Fertiliser displacement estimates from 3 to 15 to 22 to 25% 24September 2013
  25. 25. Input supply impacts  Substantially more suppliers report expansion than contraction in number of sales outlets in the last two years  28% suppliers report an increase in commercial (unsubsidised) seed sales in the last 5 years, 44% a decrease  36% suppliers report an increase in commercial (unsubsidised) fertiliser sales in the last 5 years, 43% a decrease (more agrodealers & ‘others’ reported an increase, more parastatals & distributors reported a decrease  Major reasons for increase were FISP creating business & farmers having more money or income  Major reasons for decrease were FISP discouraging sales and high input prices (especially fertilisers) 25September 2013
  26. 26. Input supply system: farmer seed purchases 26September 2013 - 1.00 2.00 3.00 4.00 5.00 6.00 Hybrid& OPV -Commercial Hybrid& OPV -Subsidy HybridMaize -Commercial HybridMaize -Subsidy OPVMaize - Commercial OPVMaize - Subsidy 2008/9 2010/11 2012/13 Kilograms - 2.00 4.00 6.00 8.00 10.00 12.00 2008/9 State (a) (b) Kilograms Mean Seed Purchases by Farmers, 2008/9 - 2012/13
  27. 27. Input supply system: farmer commercial fertiliser purchases 27September 2013 0 10 20 30 40 50 60 70 2006/07 2008/09 2010/11 2012/13 Kilograms MeanCommercialPurchases Mean Commercial Fertilizer Purchases by Farmers, 2006/07 - 2012/13
  28. 28. Is FISP worth the investment? 28September 2013 Before displacement & leakage After displacement & leakage (30%) With multipliers Incremental production (MT) 1,214,004 809,857 809,857 Net value inc. maize (mill US$) 438.6 292.6 392.5 Net gain legumes (mill US$) 23.5 23.5 30.6 Total Producer & Consumer gains (mill US$) 462.1 316.1 423.1 Programme costs (mill US$) 139.8 99.8 119.8 Total farmer costs (mill US$) 83.3 56.1 72.9 Total costs (mill US$) 223.1 155.9 192.7 NPV (mill US$) 239.0 160.2 230.4 BCR FE 2.07 2.03 2.20 1.71 1.15 1.65
  29. 29. Returns to FISP: fertiliser price effects 29September 2013 - 1.00 2.00 3.00 4.00 5.00 6.00 - 50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 300,000,000 350,000,000 - 200 400 600 800 1,000 1,200 1,400 US$mill Fetiliser price US$/mtTitle Fertiliser price NPV (US$) TOTAL FISCAL Costs BCR Fiscal Efficiency 3.00250,000,000 - 50 100 150 200 250 300 0% US$mill 450 US$mill
  30. 30. Returns to FISP: Displacement & leakage effects 30September 2013 - 1.00 2.00 3.00 4.00 5.00 6.00 1,400 sts 2.50 3.00 - 0.50 1.00 1.50 2.00 2.50 - 50 100 150 200 250 300 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% US$mill Fertiliser leakage / displaement Displacement/ leakage NPV BCR Fiscal Efficiency 3.00 400 450 US$mill NPV (US$)
  31. 31. Returns to FISP: yield response effects 31September 2013 - 1.00 1,400 sts - 0.50 1.00 1.50 2.00 2.50 3.00 60% ts - 0.50 - 50 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Fertiliser leakage / displaement Fiscal Efficiency - 0.50 1.00 1.50 2.00 2.50 3.00 - 50 100 150 200 250 300 350 400 450 0% 20% 40% 60% 80% 100% 120% US$mill % of Simulation NUE Yield response NPV (US$) BCR Fiscal Efficiency
  32. 32. Returns to FISP: farmer contribution effects 32September 2013 - 1.00 - 50,000,000 - 200 400 600 800 1,000 1,200 1,400 Fetiliser price US$/mtTitle NPV (US$) TOTAL FISCAL Costs BCR Fiscal Efficiency - 0.50 1.00 1.50 2.00 2.50 3.00 - 50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 0% 10% 20% 30% 40% 50% 60% US$mill Farmer fertiliser contribution Farmer contribution NPV (US$) TOTAL FISCAL Costs BCR Fiscal Efficiency - 50 0% 1 - 50 100 150 200 250 300 350 400 450 0% US$mill
  33. 33. How much of the subsidy goes to the intended beneficiaries?  How much of the inputs goes to smallholder farmers?  Leakages?  Who are the intended beneficiaries?  Targeting? 33September 2013
  34. 34. Leakages 34September 2013 Fertiliser Maize seed Legume seed Fertiliser coupons 2010/11 2008/9 2006/7 Estimate as % redemptions/ sales, NSO hh North 77% 77% 82% 105% 73% 52% Centre 58% 52% 29% 74% 72% 67% South 65% 83% 68% 88% 71% 88% Total 63% 68% 52% 86% 71% 72% Estimate as % redemptions/ sales, MoAFS ff North 126% 126% 134% 171% 114% 80% Centre 99% 89% 49% 132% 111% 82% South 103% 132% 109% 132% 98% 121% Total 104% 113% 87% 139% 105% 95%
  35. 35. Numbers of farm families? 35September 2013 - 0.5 1.0 1.5 2.0 2.5 2005 2006 2007 2008 2009 2010 2011 2012 Farm famillies (millions)North Centre South 1 2011-12 rth ntre uth
  36. 36. Numbers of farm families? 36September 2013 - 0.5 1.0 1.5 2.0 2.5 -10% -5% 0% 5% 10% 15% 20% 25% 2005-6 2006-7 2007-8 2008-9 2009-10 2010-11 2011-12 Annual growth rate North Centre South
  37. 37. Targeting 37September 2013 2012/13 2010/11 2008/9 2006/7 Zero >0 &<1 1 Mean / recipi ent Zero Mean/ recipi ent Zero Mean / recipi ent Zero Mean / recipi ent North 48% 0% 9% 1.82 24% 1.81 28% 2.03 38% 1.9 Centre 40% 17% 31% 1.08 31% 1.34 35% 1.42 45% 1.7 South 38% 8% 37% 1.21 11% 1.46 33% 1.49 49% 1.7 National 40% 11% 31% 1.21 21% 1.44 33% 1.52 46% 1.7 Fertiliser Maize seed Legume seed Fertiliser coupons Average coupons received per hh 2010/11 2008/9 2006/7 North 0.94 0.46 0.42 1.38 1.46 1.21 Centre 0.65 0.29 0.15 0.92 0.93 0.96 South 0.75 0.48 0.37 1.29 1 0.84 Total 0.73 0.39 0.28 1.13 1.02 0.93
  38. 38. Targeting  Stated targeting criteria  resource poor Malawians owning land  explicit emphasis on more vulnerable households child or female headed households, people living with HIV/AIDS, vulnerable people and their guardians or carers, 38September 2013
  39. 39. Targeting 39September 2013 2012/13 2010/11 2008/9 2006/7 Zero >0 &<1 1 Mean / recipi ent Zero Mean/ recipi ent Zero Mean/ recipi ent Zero Mean / recipi ent National 40% 11% 31% 1.21 21% 1.44 33% 1.52 46% 1.7 Male headed 41% 11% 30% 1.22 20% 1.45 34% 1.55 43% 1.8 Female headed 37% 13% 35% 1.18 25% 1.41 32% 1.45 54% 1.6 Youth head 60% 12% 23% 0.93 na na na na N.A. Working age head 42% 11% 31% 1.15 21% 1.43 35% 1.53 Elderly head 27% 12% 34% 1.29 21% 1.53 28% 1.49
  40. 40. Targeting 40September 2013 2012/13 2010/11 2008/9 Zero >0 &<1 1 Mean/ recipie nt Zero Mean/ recipie nt Zero Mean/ recipie nt Maize for 4-7 months 41% 13% 35% 1.10 21% 1.41 30% 1.4 Maize for 8-10 months 36% 13% 36% 1.14 25% 1.34 27% 1.6 Maize for >10 months 33% 14% 29% 1.30 17% 1.3 36% 1.77 Poorest (Ovutikitsitsa) 41% 11% 33% 1.15 29% 1.29 40% 1.31 Ovutika 38% 12% 31% 1.23 19% 1.42 30% 1.5 Ovutikilako 37% 10% 33% 1.25 21% 1.42 30% 1.56 >= wapakatikati 46% 11% 28% 1.22 17% 1.69 36% 1.8
  41. 41. Targeting – respondent views 41September 2013  Poor people, female headed hh, more productive farmers, households with orphans, better off farmers all roughly no difference in targeting  VDC members a bit more likely to get coupons, civil servants & teachers less likely  FGDs – mixed reports
  42. 42. How can the implementation of FISP be improved?  Key determinants of impacts and return to investment?  Leakages & displacement  Targeting  Yield response  Programme costs  For each determinant  Challenges  Changes made  Potential options/ further changes 42September 2013
  43. 43. Leakages & displacement  Further changes? Sort out the number of farm families & rural households Transporter vetting & monitoring E vouchers Raise farmer contributions Universal allocation but smaller amount per beneficiary Further & earlier transparency/ information & participation  Genuine participatory allocations  Fuller & earlier information on numbers  Fuller implementation of public lists 43September 2013
  44. 44. Leakages & displacement  FGD proposals More participation Sealed coupon packages opened at village meetings? Marked fertiliser bags? More/ less involvement of VHs, FAs? Elected committees? Mixed views on universal but smaller ration versus targeting the poor 44September 2013 0 0.5 1 1.5 2 2.5 3 3.5 2008/9 2010/11 2012/13 targeting ‘the poor ‘ (100kg) targeting ‘the productive ‘ (100kg) for all hh, with ½ the amount (50kg) Scores: 4 = very good; 3= good; 2 = not good not bad; 1= bad; 0 = very bad
  45. 45. Targeting: allocations, distribution & access  Good targeting should promote:  Low diversion / losses  Low displacement  Effective input use  Reaching the poor & vulnerable low exclusion errors (the right people don’t get it) inclusion errors (the wrong people get it)  Issues: processes & outcomes  Scale of programme & disbursements  Area targeting:  regional & district distribution  Household targeting:  beneficiary characteristics  coupon access & redemption 45September 2013
  46. 46. 0.0 0.5 1.0 1.5 2.0 2.5 2005/6 2006/7 2007/8 2008/9 2009/102010/112011/122012/13 North Centre South All 0.0 0.5 1.0 1.5 2.0 2.5 2005/6 2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13 North Centre South All Area targeting: fertiliser vouchers redeemed per farm family 46September 2013 MoAFS farm families NSO rural households
  47. 47. Area targeting: beneficiaries per farm family by district 47September 2013 0% 10% 20% 30% 40% 50% 60% Chikhwawa Nsanje Lilongwe Dedza Mangochi Machinga Kasungu NkhotaKota Karonga Ntchisi Mulanje Salima Mchinji NkhataBay Dowa Mzimba Balaka Ntcheu Zomba Chiradzulu Chitipa Neno Blantyre Mwanza Thyolo Likoma Phalombe Rumphi
  48. 48. Targeting  Further changes? E vouchers Universal allocation but smaller amount per beneficiary Further & earlier transparency / information & participation  Genuine participatory allocations  Fuller & earlier information on numbers  FGD proposals  More participation  Sealed coupon packages opened at public village meetings?  Marked fertiliser bags?  More/ less involvement of VHs, FAs?  Elected committees? 48September 2013
  49. 49. Yield responses  Further potential changes to improve yield responses  Improving data on yield responses?  Improving timing of coupon and input delivery & access? Tender processes More private sector involvement in fertiliser sales Earlier & more transparent/ participative coupon allocation & distribution Eliminate annual farm family register  Improving extension reach  Increasing use of organic fertilisers, legume rotations, etc 49September 2013
  50. 50. Programme costs 50September 2013 0 50 100 150 200 250 300 2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13 US$ millions Total estimated other costs Other Transport Costs Net fertiliser Seeds – maize Seeds - flexi / legumes
  51. 51. 0 50 100 150 200 250 300 2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13 US$ millions Total estimated other costs Other Transport Costs Net fertiliser Seeds – maize Seeds - flexi / legumes Annual budget Programme costs 51September 2013
  52. 52. 0 50 100 150 200 250 300 2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13 US$ millions Total estimated other costs Other Transport Costs Net fertiliser Seeds – maize Seeds - flexi / legumes Annual budget Malawi Government Direct Donor Support Programme costs 52September 2013
  53. 53. Farmer contributions  Farmer contributions have fallen since establishment of FISP from around 35% to 3% of fertiliser cost 53September 2013 0% 5% 10% 15% 20% 25% 30% 35% 40% 2005/6 2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13
  54. 54. Programme costs  Changes implemented to date  Physical budget control  Financial budget control  Supplementary coupon control  Invoice payments …  Tender procedures …  Further potential improvements  Increase farmer contributions  Reduce beneficiary numbers  Reduce subsidised inputs per beneficiary  Reduction in leakages  Improved targeting to reduce displacement  FDG views  Mixed on reducing beneficiaries or subsidy/ beneficiary 54September 2013
  55. 55. 55 Thank you This material has been funded by UKaid from the Department for International Development; however the views expressed do not necessarily reflect the organisations’ official policies.
  56. 56. Leakages & displacement  Challenges  High value of inputs & of subsidy  Fake coupons  Supplementary coupons & diversion  Transport losses  Adulteration of inputs (eg sand in fertiliser)  Late deliveries, stockouts & queues  Seed claims  Local level diversion (TAs, Agric. staff, market staff)  Coupon sales, input sales, vendors 56September 2013
  57. 57. Leakages & displacement  Changes implemented to reduce leakages & displacement  No supplementary coupons  Better coupon security  Transport monitoring  Open meetings  Public beneficiary lists  Better market systems (eg rotation, committees)  Police & ACB involvement 57September 2013
  58. 58. Household targeting  Challenges (see earlier slides)  Little evidence of targeting reaching the poor & vulnerable – but they are not excluded…?  Redistribution & sharing very important for the poor  Interactions with leakages  Allocation & access both important  ‘We are all poor’, growing population, static coupons  Very difficult to improve it Participation & transparency? External involvement?  Changes implemented to improve area & hh targeting  See under leakages  Regional reallocations  Increased emphasis on poor & vulnerable  Actions to improve access (eg market systems)  Low farmer contributions? 58September 2013
  59. 59. Yield responses  Challenges  Data on actual yield responses  Improving timing of coupon and input delivery & access Tender processes Fertiliser storage capacity Delivery access to markets Matching market supply & demand Beneficiary identification & coupon distribution processes  Improving farmer crop management Farmer knowledge Farmer resource (food/cash/labour) constraints 59September 2013
  60. 60. Yield responses  Changes implemented to improve yield responses  Improving data on yield responses  Improving timing of coupon and input delivery & access Tender processes Delivery access to markets Beneficiary identification & coupon distribution processes  Some FGDs mentioned extension/ training & knowledge benefits 60September 2013
  61. 61. Programme costs  Challenges  Very large scale of programme, national budget & fiscal macroeconomic impacts  Multiple stakeholders & political importance  Physical & financial budgeting & control  Controlling leakages  Determining appropriate farmer contributions  World prices for fertiliser costs  Forex demands for fertiliser  Speedy payments to reduce supplier costs  Tendering procedures – time, quality, price 61September 2013
  62. 62. 62 Coordination & control Payments & control Stakeholders FARMERS MoAFS: HQ, LU, ADDs, DADOs, ASs, FAs DCs, TAs, VDCs, Police, CSOs Fertiliser importers, retailers Seed suppliers, retailers ADMARC: HQ, districts, markets SFFRFM: HQ, depots, markets Transporters Donors Planning & budgeting Secure coupon printing Coupon distribution to areas. Beneficiary identification Area allocations Farmer registration Coupon redemption Input distribution (transport & storage) Input purchase Coupon issue to farmers Market opening
  63. 63. 7 8 9 10 11 12 Fertiliser tenders Voucher allocations Transport tenders Voucher printing Voucher & lists to districts Seed supply contracts Month 2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13 Completion of contracts & voucher processes 63September 2013
  64. 64. Depot receipts timing, % parastatal fertiliser sales 64September 2013 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% End Sept % End Oct % End Nov % End Dec % 2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13
  65. 65. Uplifts timing, % total by month 65September 2013 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% End Sept % End Oct % End Nov % End Dec % Uplifts % total 2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13
  66. 66. Diversion?  Transport losses?  No of companies commissioned 2008/09 23 2009/10 26 2010/11 25 2011/12 23 2012/13 43  Logistics Unit reported 608MTS lost (0.4%) & MK108 mill (0.2%)  Logistics Unit also reported 4,902MT stock balance expected (3.2% of voucher redemptions)  Tampered vouchers: 13,083 (0.4%) 66September 2013
  67. 67. Outstanding invoice payments by season 67September 2013 0% 10% 20% 30% 40% 50% 60% 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13 MK billion End Nov (MK bill) End Dec (MK bill) End Jan (MK bill) End Nov % End Dec % End Jan %
  68. 68. Tendering  Initial tender call March 2012 opened in May  Second call July 2012 awarded mid September 68July 2013 740 760 780 800 820 840 860 880 900 Yafuka Price NPK, $/mt Suppliers Chirimba Kanengo Luwinga 740 760 780 800 820 840 860 880 900 Yafuka Price Urea, $/mt Suppliers Chirimba Kanengo Luwinga Optichem Paramount RAE Options Mzati ADMARC I Investment SFFRFM SFFRFM ADMARC
  69. 69. 0 100 200 300 400 500 600 700 800 900 1,000 2009 2010 2011 2012 Price US$/MT NPK, landed in depots Urea, landed in depots DAP, international Urea, E. Europe, Bulk FISP cost in markets US$/MT FAM prices US$/MT Fertiliser cost & price comparisons 69July 2013 2012/13 exchange rate: 365MK/US$
  70. 70. Total fertiliser voucher redemptions (millions) 70July 2013 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 2005/6 2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13 North Centre South All
  71. 71. 71September 2013 Targeting: scale of fertiliser sales 0 50 100 150 200 250 2005/6 2006/7 2007/8 2008/9 2009/102010/112011/122012/13 Fertiliser sales ('000 MT) Actual tobacco fertiliser Actual maize fertiliser Fertiliser budgeted
  72. 72. 72September 2013 0 2 4 6 8 10 12 0 50 100 150 200 250 2005/6 2006/7 2007/8 2008/9 2009/102010/112011/122012/13 Seed sales ('000MT) Fertiliser sales ('000 MT) Axis Title Actual tobacco fertiliser Actual maize fertiliser Fertiliser budgeted Maize seed Hybrid seed Legume seed Targeting: scale of fertiliser & seed sales
  73. 73. Malawi maize trade information 73September 2013 0 50 100 150 200 250 300 350 400 450 20002001200220032004200520062007200820092010201120122013 '000MT Export Import 0 5 10 15 20 25 2008Apr 2008Jul 2008Oct 2009Jan 2009Apr 2009Jul 2009Oct 2010Jan 2010Apr 2010Jul 2010Oct 2011Jan 2011Apr 2011Jul 2011Oct 2012Jan 2012Apr 2012Jul 2012Oct 2013Jan 2013Apr '000MT Imports Exports Monthly informal imports & exportsAnnual formal imports & exports ????
  74. 74. Beneficiary welfare, education, nutrition, health  Improved school attendance, diet, health mentioned in some FGDs  Past studies: U5 health, school attendance  Holden perceived health  Rickert Gilbert satisfaction with life  Ward TIPS reduced stunting 74September 2013
  75. 75. Input supply impacts: fertiliser procurement from private co. & parastatals 75September 2013 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0 50 100 150 200 2005/6 2006/7 2007/8 2008/9 2009/102010/112011/122012/13 '000 metric tons Brought forward MTS Parastatal tenders MTS Private sector tenders MTS Private sector % new supplies
  76. 76. Input supply system 76September 2013 42.6 31.6 39.8 62.5 20.4 24.2 18.6 12.5 37.0 44.2 41.5 25.0 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 Distributors ADMARC/SFFRFM Agro-Dealers OtherSuppliers Expand Contract No Change Percent Growth of Business: Number of Sales Outlets, 2010/11 - 2012/13
  77. 77. Input supply system 77September 2013 Distribut or / Importe r ADMAR C / SFFRFM Independ ent Agro- Dealers Other Supplier s All Seeds Sales Increase Decrease No Change N 38 56 6 50 8 72 20 25 28 38 35 199 38 44 19 16 28 44 28 290 Fertiliser Sales Increase Decrease No Change N 38 56 6 50 26 49 26 35 41 31 28 61 40 20 40 5 36 43 21 151 MAKE A BAR CHART OF THIS? Changes in Commercial Sales in past 5 agricultural seasons
  78. 78. 78September 2013 Indicators Seed sales Fertiliser Sales Reasons for Increase Higher farmer income, can procure more supplies Able to obtain credit from suppliers Subsidy programme has created more business Farmers had more money to purchase Improved farm produce prices Other N 19.5 2.4 53.7 14.6 4.9 4.9 82 16.4 - 20.0 40.0 14.6 9.1 55 Reasons for Decrease Lack of credit/cash to purchase supplies Subsidy programme has discouraged sale High input prices Farmers have no money for purchases Unable to participate in the subsidy pr Other N 2.3 61.7 14.8 11.7 2.3 7.0 128 3.1 52.3 30.8 6.2 1.5 6.2 65 Input supply system MAKE A BAR CHART OF THIS? Reasons for Changes in Commercial Sales in past seasons
  79. 79. Targeting 79September 2013 Fertiliser Coupon numbers per hh Zero >0 &<1 1 More than 1 Owned Area in ha 0.90 0.88 0.94 1.16 Value durable assets (‘000MK) 34,4 23,2 25,8 55,2 Value Livestock assets (‘000MK) 53,1 26,8 45,7 178.0 Total Value livestock & durable assets (‘000MK) 87,5 50,1 71,5 235,2 Subjective score of hh food consumption over past 12 months 1.4 1.4 1.5 1.6 Subjective score on welfare 2.2 2.2 2.2 2.3 Month after harvest that maize ran out 6.9 7.3 7.2 7.5
  80. 80. Information sources  Implementation reports (predominantly Logistics Units weekly reports and annual report),  Coupon access, redemption, crop management & other data from household survey, sample of 2000 households across 14 districts in the 3 regions  Input supplier data from survey in 10 districts 446 outlets  Focus group discussions, key informant interviews with different stakeholders (Ministry of Agriculture & local government staff, retailers, and different categories of rural people)  ‘community survey’ with key informant groups in sampled villages  Economy wide & maize crop simulation modelling  Other reports 80July 2013
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