Malawi has over the last four years embarked on a comprehensive fertilizer and seed subsidy program to boost its agricultural production and to enhance food security in the country. The program aims to provide coupons for purchase of subsidized fertilizer and seeds to targeted poor rural households. It is of high interest to know more about the efficiency of the fertilizer-seed targeting program in reaching poor households, the productivity and food security impacts of the subsidized fertilizers and seeds, and whether fertilizer subsidies crowd out organic manures and other crops than maize. The targeting of fertilizer subsidies is affected by the fact that informal markets for fertilizer coupons as well as for subsidized fertilizers have emerged and which have productivity, poverty and equity effects that have not been studied in earlier impact assessments of the program. In this report we provide new evidence on the extent of leakages of coupons and seeds from the administrative program and how these leakages re-enter the rural economies through the informal markets. The targeting efficiency of the administrative coupon system is assessed given the targeting criteria. The relationships between household characteristics and access to administratively targeted coupons, purchased coupons and purchased cheap fertilizers are analyzed. The impacts of the program are assessed with a number of indicators at household and village levels based on household perceptions. Household preferences for fertilizer, willingness and ability to pay are examined through a number of social experiments.
The objectives of the project were to identify
1) The extent to which poor rural households benefit from the targeted fertilizer and seed subsidy program by receiving coupons for seeds and fertilizers that they are able to use to boost their own farm production to enhance their food security, income, and build-up of assets,
2) The extent to which the targeted fertilizer and seed subsidy program results in efficient utilization of these inputs through enhancement of farm plot level land productivity,
3) The productivity of alternative seed varieties of maize (HYVs, OPVs, recycled seeds, local seeds),
4) The extent to which fertilizer subsidies for maize crowd out other crops and the use of organic manures and have other sustainable land management implications,
This report primarily addresses objective 1) and provides a partial analysis of objective 4) based on analysis at household level. The next report will contain the more detailed analyses using farm plot level data. This report is fairly short and intends to make key findings easily accessible to readers from different disciplines. Some references are provided to earlier studies to make clear what is new or different in this study as compared to earlier findings. We plan to produce more thorough analyses for publications in scientific journals.