Fertiliser Input Susbsidy Programme in Malawi preliminary workshop presentation 2012 13

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Fertiliser Input Susbsidy Programme in Malawi preliminary workshop presentation 2012 13

  1. 1. 1 FISP Implementation 2012/13 Wednesday, 11th July 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  Objective – consideration of critical issues for cost effective impact of FISP  Costs  Overall costs  Tender prices  Impacts  Incremental production Yield responses, displacement & diversion Timing Scale, targeting & allocation , distribution, receipts, redemption & coupon use  Maize price impacts  Supplier impacts 2July 2013
  3. 3. Information sources  Preliminary report  implementation reports (predominantly Logistics Units weekly reports and annual report),  Preliminary analysis of key implementation data from household survey, sample of 2000 households across 14 districts in the 3 regions, in all livelihood zones  Full report (end August)  All the above, with full analysis of relevant household survey data  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  reports by other organisations 3July 2013
  4. 4. COSTS Overall costs Tender prices Farmer contribution 4July 2013
  5. 5. Programme costs 5July 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
  6. 6. 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 6July 2013
  7. 7. 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 7July 2013
  8. 8. Tendering  Initial tender call March 2012 opened in May  Second call July 2012 awarded mid September 8July 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, $/mt Suppliers Chirimba Kanengo Luwinga Optichem Paramount RAE Options Mzati ADMARC I Investment SFFRFM SFFRFM ADMARC
  9. 9. 0 100 200 300 400 500 600 700 800 900 1,000 2009 2010 2011 2012 Price US$/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 9July 2013 2012/13 exchange rate: 365MK/US$
  10. 10. Farmer contributions  Farmer contributions have fallen since establishment of FISP from around 35% to 3% of fertiliser cost 10July 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
  11. 11. IMPACTS  Incremental production, displacement & diversion  Yield responses  Timing  Scale of programme  Targeting & coupon use  Maize price impacts  Supplier impacts 11July 2013
  12. 12. Yield responses  Difficulties in obtaining reliable information on smallholder yields and yield responses  New information from commissioned maize simulation study under smallholder conditions (Anthony Whitbread et al, Goettingen University)  Historical weather records (1928 -2004)  Different soils  Smallholder crop management (planting times, weeding regimes, fertiliser rates and timing, plant densities, varieties)  Realistic results  Average yields  Critical yield factors  Nutrient (nitrogen and phosphate responses) 12July 2013
  13. 13. Illustrative N Response, hybrid without & with P 13July 2013
  14. 14. Illustrative N Response, local without & with P 14July 2013
  15. 15. Simulated yield response  Good potential returns to N and impact  Importance of  hybrid seed  early planting  good agronomy  potential for lower N rates  variable returns to N Planned further work  Further analysis of simulation results  Analysis of On Farm Trial results  Analysis of IHS3 crop data  Analysis of Crop Cutting data  Incremental legume production? 15July 2013
  16. 16. Timing  early planting needs early access to seed & fertiliser ………. 16July 2013
  17. 17. 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 17July 2013
  18. 18. Depot receipts timing, % parastatal fertiliser sales 18July 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
  19. 19. Uplifts timing, % total by month 19July 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
  20. 20. Targeting: allocations, distribution & access  Good targeting should promote:  Low diversion / losses  Low displacement  Effective input use  Poor & vulnerable 1. Scale of programme & disbursements 2. Area targeting:  regional & district distribution 1. Household targeting:  beneficiary characteristics  coupon access & redemption 20July 2013
  21. 21. 21July 2013 Subsidy sales : fertilisers 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
  22. 22. 22July 2013 Subsidy sales : fertilisers & seeds 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
  23. 23. Total fertiliser voucher redemptions (millions) 23July 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
  24. 24. 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 Fertiliser vouchers redeemed per farm family 24July 2013 MoAFS farm families NSO rural household s
  25. 25. Beneficiaries per farm family by district 25July 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
  26. 26. How many coupons received by how many households? 26July 2013 2.7 million (NSO) or 4.4 million (MoAFS) rural/ farm households? Note: Receipts by urban households are omitted (about 5% of rural receipts) 2012/13 2010/11 2008/9 Fert. Maize Legume Ferti. Maize Legume Fert. Flex Coupons received per hhold 0.78 0.39 0.28 1.13 0.68 0.41 1.12 0.57 Estimated total coupons, NSO hh ('000) 2,131 1,078 776 2,733 1,613 968 2,794 1,419 Estimated total coupons , MoAFS hh ('000) 3,427 1,733 1,247 4,420 2,649 1,600 4,108 2,087 MoAFS Total Voucher redemptions ('000) 2,979 1,529 1,427 3,183 1,988 1,363 4,046 2,758
  27. 27. Fertiliser Coupon Receipts & Targeting 27July 2013    Coupons/hh 2012/13 2010/11 2008/9 2006/7 0 >0 to 1 >1 Mean 0 Mean 0 Mean 0 Mean North  47% 9% 43% 2.22 24% 1.81 28% 2.03 38% 1.9 Centre 41% 47% 12% 1.09 31% 1.34 35% 1.42 45% 1.7 South 38% 43% 19% 1.30 11% 1.46 33% 1.49 49% 1.7 National 40% 41% 19% 1.30 21% 1.44 33% 1.52 46% 1.7 Poor 45% 42% 13% 1.14 29% 1.29 25% 1.34 50% 1.49 Ovutika 36% 44% 19% 1.32 19% 1.42 20% 1.39 35% 1.6 Ovutikilako 38% 38% 24% 1.34 21% 1.42 24% 1.56 30% 1.91 >=wapakati kati 47% 27% 27% 1.74 17% 1.69 24% 1.6 26% 2.81
  28. 28. Perceptions of likelihood of different types of people getting coupons 28July 2013 Scores: 1 = more likely; 2= no difference; 3 = less likely     Total Poor people 1.97 Female headed hh 2.07 More productive farmers 2.09 Hh with orphans 2.04 Better off hh 2.12 Civil servants & teachers 2.48 VDC members 1.79 Average scores mostly around 2: no difference – no apparent clear targeting
  29. 29. 29July 2013   Open meetings in Redistr- ibution? Suppl- ementary?  Allocation Distribution North 97% 98% 37% 1% Centre 65% 77% 64% 2% South 70% 77% 66% 17% Total 71% 79% 62% 9% Fertiliser voucher allocation & distribution: open meetings?   Village head/TA VDC Agric. staff Villagers in open meeting   North 67% 21% 0% 6% Centre 79% 8% 4% 4% South 69% 8% 4% 5% Total 73% 9% 4% 5% But who actually decides on allocations?
  30. 30. Fertiliser voucher allocation & distribution: beneficiary List 30July 2013     List? Public? Place published Village head house School/Health Centre Agric. Office ADMARC/ Input Market North 95% 7% 75% 0% 11% 7% Centre 73% 40% 66% 27% 0% 3% South 76% 46% 59% 22% 3% 9% National 77% 38% 63% 23% 2% 7% When published? Seen by hh? HH member included?<=Oct Nov Dec Jan North 38% 45% 10% 7% 31% 87% Centre 46% 39% 14% 1% 36% 80% South 51% 42% 4% 2% 33% 81% National 49% 41% 8% 2% 34% 82%
  31. 31. Beneficiary List – perceived receipts by listed households Among those who saw the list… % who think nearly all those listed received 31July 2013 at least part of a fertiliser coupon two or more fertiliser coupons North 61% 22% Centre 34% 6% South 75% 23% National 56% 16%
  32. 32. Perceptions of quality of allocation & distribution processes 32July 2013 Scores: 4 = very good; 3= good; 2 = not good not bad; 1= bad; 0 = very bad 0 0.5 1 1.5 2 2.5 3 3.5 2005/6 2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13 Number of coupons Timing of distribution Distribution methods Allocation criteria
  33. 33. Preferences for targeting criteria 33July 2013 Scores: 4 = very good; 3= good; 2 = not good not bad; 1= bad; 0 = very bad 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)
  34. 34. Coupon payments  Just over 1% of fertiliser coupons were reported as obtained with some payment (2% in 2010/11, 5% in 2008/9 and 2006/7)  Reported sources included traders, TAs and headmen, and agricultural staff, with traders about twice as common as each of the others  Reported prices varied from MK200 to MK6,500 (with a mean of around MK1750 and median of around MK750 34
  35. 35. Coupon use and redemption  95% fertiliser coupons & 97% maize seed coupons and 91% legume seed coupons used to buy inputs  Limited coupon sales (5% fertiliser coupons, v few seed coupons)  9% of households paid a ‘tip’ to redeem their fertiliser coupon (same as in 2010/11, 14% in 2008/9, 20% in 2006/7), most commonly paid between MK750 and MK1,000 extra. Mean redemption payment was around MK1,300 35
  36. 36. Coupon redemption 36July 2013 Hours travel & waiting Transport & misc expenses (MK) Distance to nearest ADMARC / SFFRFM (km) Distance to nearest private selling point (km) Median Median Median Median 2012/13 8 250 5 6 2010/11 12 200 4 6 2008/8 9 200 5 8 2006/7 7 150 5 5
  37. 37. Coupon redemption  Most beneficiaries got the fertiliser they wanted (99%)  Maize seed beneficiaries: 84% got the variety they wanted,  13% wanted a different hybrid variety, very few (around 1%) wanted but could not have an OPV.  Legume seed beneficiaries: 94% of beneficiaries got what they wanted 37July 2013
  38. 38. Seed coupon redemptions: variety shares 38July 2013 Household survey Reported sales (LU) Maize seed redemptions Hybrid 85% 78% OPV 15% 22% Legume seed redemptions Beans seed 17% 23% Cow peas seed 1% 1% Groundnuts seed 59% 65% Soya Seed 14% 8% Pigeon pea 2% 2%
  39. 39. Coupon redemption: financing 39July 2013 General savings Ganyu Family/ neighbours Other 2012/13 62% 20% 7% 9% 2010/11 72% 15% 5% 8% 2008/9 77% 11% 6% 5%
  40. 40. Serious redemption problems experienced, % customers by outlets 40July 2013 Fertiliser Maize seed ADMAR C SFFRM Parastatal Chain Agrodealer Long queues 47% 50% 32% 14% 7% Queue jumping 37% 47% 23% 9% 5% Scrambling/fighting 34% 21% 30% 16% 12% Vendors  33% 27% 22% 4% 3% Long distance 32% 25% 16% 4% 10% Slow service 28% 34% 13% 3% 3% Gender violence 26% 15% 18% 5% 2% Late /early hours 24% 23% 11% 7% 2% Demands for ‘tips’ 21% 9% 9% 9% 2% Input shortages 20% 13% 8% 3% 1% No M/F toilets 18% 25% 13% 3% 5% No toilets 17% 23% 15% 7% 6% Sexual demands 11% 4% 3% 6% 1% Abusive language 8% 0% 3% 3% 0%
  41. 41. Stake holder roles in fertiliser redemption (% respondents) 41July 2013 ADMARC SFFRFM Not present Present Not present Present Helpful Problem Helpful Problem Vendors 59% 2% 29% 72% 0% 23% Police 42% 51% 2% 44% 53% 0% VDC members 27% 61% 3% 29% 59% 1% Market committee 57% 24% 3% 52% 32% 0% Village head 13% 75% 3% 10% 83% 1% Market Clerk 49% 32% 5% 50% 32% 0% Other Market officials 60% 19% 4% 63% 18% 0% Politician 85% 5% 1% 88% 7% 0% Agricultural Officials 56% 28% 2% 60% 29% 1%
  42. 42. Subsidised input use 42 Almost all coupon fertiliser was used in people’s own garden or shared with others (3%), and almost all was applied to different maize varieties Local 26% OPV 11% Hybrid 63% Burley 0% Almost all coupon seed was used in people’s own gardens.   Hybrid maize OPV maize Soya seed G/Nuts seed Beans seed Other specify Pigeon pea Own garden 96% 92% 88% 87% 80% 100% 92% Shared 1% 2% 2% 1% 1% 0% 0% Sold 0% 0% 0% 0% 1% 0% 0% Kept 2% 6% 5% 2% 1% 0% 0% Other 1% 0% 5% 9% 17% 0% 8%
  43. 43. 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%) 43July 2013
  44. 44. Input supply impacts: fertiliser procurement from private co. & parastatals 44July 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
  45. 45. Outstanding invoice payments by season 45July 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 %
  46. 46. Summary / conclusions  Cost control – good as regards budgeted costs, potential for reducing costs & diversion with larger farmer contributions  Timing of tender processes is critical (but if earlier then other processes & transport /storage may become limiting)  Preliminary simulation yield response information is promising, & suggests positive returns to FISP and importance of early input access  Targeting – there are declining fertiliser coupons per hh, a more even regional balance, & no clear household targeting. Open meetings & beneficiary lists are being implemented, but more enforcement of their proper use is needed  Redemption problems reported are much as expected & need on-going attention  Difficult to estimate scale of diversion – needs careful attention & constant innovation (coupon security is better but transport security a concern…) 46July 2013
  47. 47. 47 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.

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