Farm Input Subsidy Program Research Articles

The politics of agricultural policy and nutrition: A case study of Malawi's Farm Input Subsidy Programme (FISP).

The concept of food and nutrition policy has broadened from simply being an aspect of health policy, to policy interventions from across a wide range of sectors, but still with potentially important impact on nutritional outcomes. This wider and more complex conceptualisation involves policy with multiple objectives and stakeholder influences. Thus, it becomes particularly important to understand the dynamics of these policy processes, including policy design and implementation. To add to this literature, we apply the Kaleidoscope Model for understanding policy change in developing country contexts to the case-study of an agricultural input subsidy (AIS) programme in Malawi, the Farm Input Subsidy Programme (FISP), exploring the dynamics of the FISP policy process including nutritional impact. Over a three-month period between 2017 and 2019 we conducted in-depth interviews with key stakeholders at national and district levels, and focus groups with people from rural districts in Malawi. We also undertook a review of literature relating to the political economy of the FISP. We analysed the data thematically, as per the domains of the Kaleidoscope Model. The analysis across the FISP policy process including policy design and implementation highlights how stakeholders' ideas, interests and influence have shaped the evolution of FISP policy including constraints to policy improvement-and the nutritional impacts of this. This approach extends the literature on the tensions, contradictions and challenges in food and nutrition policy by examining the reasons that these occur in Malawi with the FISP. We also add to the political science and policy analysis literature on policy implementation, extending the concept of veto players to include those targeted by the policy. The findings are important for consideration by policymakers and other stakeholders seeking to address malnutrition in rural, food-insecure populations in Malawi and other low-income settings.

Do subsidies on seed and fertilizer lead to child labour? Evidence from Malawi

SummaryMotivationSub‐Saharan African governments have subsidized farm inputs—fertilizer and seed especially—to increase food production by small‐scale farmers to improve food security. A potential drawback of such schemes is that they may encourage farmers to put their children to work in the fields, harming their education.PurposeDid the Malawi Farm Input Subsidy Programme that began in 2005/2006 increase child labour on the holdings of beneficiary smallholders?Methods and approachThe article analyses data from the Malawi Integrated Household Panel Survey to examine the effect of seed and fertilizer subsidies on child labour. The study employs a correlated‐random‐effects‐control function regression, using district coupon allocation as an instrumental variable for coupons received by households.FindingsThere was statistically significant evidence that the Farm Input Subsidy Programme (FISP) increased child labour. The effect, however, was relatively small. At the sample mean, it was estimated that the programme led to a 12 percentage point increase in the likelihood that children would work on the farm and that the children would work an additional 72 minutes a week on the fields. The FISP, however, did not affect the enrolment of children in school.Effects varied socially: children in male‐headed, uneducated, and smallholder households were the most affected.Policy implicationsAlthough the observed effects are not large, they are unwelcome. Two policy corrections could eliminate them. One, the award of subsidy coupons could be made conditional on children's school performance. Two, given that the effects barely applied in households where parents had been to school, agricultural training should stress the importance of children attending school and not working in the fields.

How effectively might agricultural input subsidies improve nutrition? A case study of Malawi’s Farm Input Subsidy Programme (FISP)

How effectively might agricultural input subsidies improve nutrition? A case study of Malawi’s Farm Input Subsidy Programme (FISP)

Improving wasting among children under-5 years in Malawi: The role of farm input subsidies.

Wasting among children under-5 years remains a public health problem in Malawi, despite the quest to improve food availability through Farm Input Subsidy Program (FISP). As such, the study examined the link between FISP and child wasting. Using Malawi Integrated Household Panel Surveys for 2013, 2016, and 2019, two-stage least squares approach was employed to run a Cobb Douglas production function and a correlated Random Effects (CRE) Model to account for endogeneity challenges and an unbalanced panel dataset. The study hypothesized the role of FISP to dietary diversity at the household level on child wasting [weight-for-height (WHZ)]. Based on the analysis, the study found that household access to FISP coupons was not a stand-alone predictor for low wasting among children under-5 years. However, increased maize production due to FISP coupon access significantly correlated with lower wasting likelihood incidences at the household level. Worth to note, that in 2015/16, households that had accessed FISP coupons and were in the central region had higher wasting probabilities among the children under-5 years in Malawi compared to other counterparts panels. This implies challenges to addressing wasting among children under-5 years– which can be attributed to higher redemption costs of the FISP coupon. Therefore, the current study suggests that input subsidies can improve the reduction of wasting among children under-5 years through specific pathways, among them, increased maize production and considering appropriate targeted approaches to ensure households access the inputs for sustained food availability, which in turn enhances improved the children under-5 years health dividends in Malawi.

Child nutrition and farm input subsidies: The complementary role of early healthcare and nutrition programs in Malawi

Despite significant efforts to improve under-nutrition, the prevalence of low height-for-age in the world’s population remains high. It is highest in sub-Saharan Africa, where extensive early childhood nutrition programs, and the reintroduction of the farm input subsidy program have not significantly altered under-nutrition. Empirical evidence shows that early-life nutrition interventions have limited effects in the long-term. Even though subsidy programs are aimed at enhancing food security, they only improve nutrition outcomes that are sensitive to intervention typically in the short-run, weight-for-age and weight-for-height, but not height-for-age, which is the outcome of a range of interventions and circumstances that effect nutrition cumulatively over the life cycle. We argue that farm input subsidies only support height-for-age as part of a set of in utero and early life investments in nutrition that are complemented by post-infancy community nutrition programs. We use the 2010–2013 Malawi Integrated Household Panel Survey and the 2010 Malawi Demographic and Health Survey for our analysis. We find a positive impact of farm input subsidy vouchers on height-for-age only when maternal health and child nutrition interventions during the in utero and early-life phases have first taken place. When the results are considered by age group, they show that the subsidy positively relates to height-for-age amongst children younger than three years when complemented by maternal access to a WHO-recommended level of maternal healthcare. We find some support to show that the maternal investment only sustains beyond three years of age conditional on a child also participating in a nutrition enhancement program. Increasing long-run child nutrition demands coordinating agricultural and healthcare policies. The sustained impact of investments made during early-life requires follow-up nutrition interventions in later years and financial liquidity to activate the benefits of health policies. Policy coordination is not a ”nice to have”. Rather, co-ordinating a range of responses that target multiple life stages and policy domains is essential for unlocking the benefits of earlier investments later in children’s lives.

Subsidizing improved legume seeds for increased household dietary diversity: Evidence from Malawi’s Farm Input Subsidy Programme with implications for addressing malnutrition in all its forms

Many sub-Saharan African countries implementing agricultural input subsidies programmes (AISP) concentrate on fertilizers and staple food crops which may have little or no effect on consumption of diverse nutrient dense non-staple foods. The programme in Malawi – the Farm Input Subsidy Programme (FISP) – includes legume seeds, but little research has been undertaken to evaluate the effects of this strategy on household dietary diversity. In this study, we used two waves of integrated household panel survey data of 2013 and 2016 to examine the dietary diversity gains from inclusion of legume seed coupons in the programme. The control function approach for dealing with selection bias into a programme is used in Poisson regression of panel data. The results show that access as well as redemption of legume coupons is positively associated with diversified diets. This is especially through location fixed effects in the southern region of Malawi, higher production diversity, greater land holding sizes and the sale of maize. Further, households that had less need to satisfy hunger through the growing of maize were those likely to redeem legume coupons. The results suggest a more nuanced pathway of impact from coupon access, redemption or type of crop produced to dietary diversity than the pathway that might be expected, and have implications for how best to understand and conceptualise the tensions and synergies between addressing different aspects of malnutrition in all its forms – and suggest the importance of addressing food insecurity constraints that potentially limit the growing of nutrient-rich legume crops as well as wider increases to dietary diversity. The results also point to the importance of the income pathway and food markets in facilitating greater dietary diversity. Further consideration of these issues by policymakers and the wider agri-nutrition community will be important to advance the discussion and research of how best to design AISP and other public policy to address malnutrition in all its forms.

Exploring adoption effects of subsidies and soil fertility management in Malawi

AbstractFarm input subsidies and integrated soil fertility management (ISFM) technologies are popular policy interventions in sub‐Saharan Africa, often with the stated goals of increasing crop yields and incomes while reducing hunger and poverty. However, little is known about the combined adoption effects of input subsidies and ISFM technologies on farm productivity and household nutrition in developing countries. Using a decade of nationally representative panel data from Malawi, we analyse joint adoption effects of input subsidies and ISFM technologies on smallholder household welfare. We use multivariate probit, dynamic random effects probit, and multinomial endogenous treatment effects models to account for selection bias and endogeneity originating from both observed and unobserved heterogeneity. We find that participation in a farm input subsidy programme is strongly associated with a 15–29 percentage point increase in the probabilities of adoption of three ISFM technologies: conservation agriculture, soil and water conservation, and organic fertiliser. Furthermore, we find that the joint use of input subsidies and ISFM technologies increased crop income and micronutrient consumption by at least 12%. Our findings suggest that the joint use of input subsidies and ISFM technologies are among potential strategies to address low productivity and nutritional insecurity through improvements in soil health.

The effects of the Malawi Farm Input Subsidy Program on household per-capita consumption convergence

ABSTRACT The Malawi Farm Input Subsidy Program (FISP) was praised for turning the country's food deficit into a surplus after inception in 2005. It is, however, not clear whether these food security gains spill over to equity in distribution of welfare. We examine the effects of the FISP on per-capita consumption convergence, on 2251 households interviewed in 2010–2013 Malawi Integrated Household Panel Survey. The analysis employs a Lewbel method of instrumental variables to account for non-random selection of beneficiaries into the programme. The results reveal that FISP helps relatively poor farmers increase household per-capita consumption towards converging to that of the relatively rich. This convergence is robust only among small but not large farmers. Past studies that evaluated the FISP while not paying attention to the welfare equity gains in household per-capita consumption, may have underestimated its benefits. Therefore, policy should support the programme with an additional objective of reducing inequality, beyond the primary aim of enhanced food security. Considering that the effects of FISP are limited to small farmers, alternative interventions such as inputs for credit should be made available to large farmers. This will allow FISP to induce widespread welfare gains.

An alternative approach to measuring the welfare implications of input subsidies: Evidence from Malawi

AbstractMost studies that have evaluated the welfare impacts of agricultural input subsidy programmes (ISPs) in developing countries have focused on measuring their effects on various outcomes of interest such as agricultural productivity. I estimate the consumer surplus accrued by direct and indirect beneficiaries of ISPs in Malawi. Malawi's Farm Input Subsidy Programme (FISP), introduced in 2005, is the largest such scheme in sub‐Saharan Africa. I find that the programme provides low direct benefits compared to the public costs of the programme. At the national level, the benefit‐cost ratio (BCR) is up to 0.37 for FISP households with no option to resell the fertiliser accessed through the programme. When reselling of the fertiliser is allowed for, the BCR increases to 0.64 including spillover benefits to direct non‐beneficiaries of FISP. I also found 60% of all fertiliser vouchers and benefits accrued to farm households with above the median wealth level. Many farmers demand 25 kg of fertiliser or less at the subsidised price. Thus, when resource poor direct beneficiaries have the option to buy 25 kg bags of fertiliser in addition to the 50 kg bags currently being offered under FISP, their benefits increase by about 53% compared to the status quo. Overall, my results suggest that a more flexible redemption of the fertiliser vouchers as well as complementary investments such as improved access to credit could increase the programme's contribution to farmers’ welfare.

Coping with negative shocks and the role of the farm input subsidy programme in rural Malawi

AbstractThis study uses household panel data from Malawi's 2010/11 and 2012/13 Integrated Household Panel Survey to investigate the mitigating role of its Farm Input Subsidy Programme (FISP) against the deleterious impacts of negative rainfall shock on households’ welfare in rural Malawi. The study finds that the FISP has a cushioning role on the negative impact of rainfall shocks. The use of a farm input subsidy scheme enables rural households to substantially increase their food consumption and overall food security, despite the increasing threat of climate change. The results of this study highlight the importance of agricultural policy, such as the FISP, in rural households’ mitigation of weather risk.

The Politics of Hunger in an SDG Era: Food Policy in Malawi

This study focuses on the relationship between politics and hunger and the national political discourse on food security in Malawi. Our aim is to better understand the role of local and national actors in pursuing policies that aim to achieve the 2030 Agenda and the Sustainable Development Goals (SDGs). The empirical focus is on the Farm Input Subsidy Program (FISP), introduced by the Malawian government in 2005–2006, which supports smallholder farmers to better access to agricultural inputs. We provide an overview of the food security discourse and highlight the importance of political commitment for policy coherence that is required for achieving the SDGs. Thereafter, we introduce the policymaking scene in Malawi and FISP before critically examining the policy narratives on food security in the country. Our goal is to examine why some issues are effectively dealt with and not others. We argue that food security policies in Malawi are influenced by the political incentives they provide for electoral campaigns and for securing a regular flow of financial resources in agriculture projects that are highly dependent on foreign aid.

Understanding Malawian farmers' slow adoption of composting: Stories about composting using a participatory video approach

AbstractSoil and land degradation is a common issue in Sub‐Saharan Africa leading to poor yield and threatening food security, yet soil conservation technologies remain underutilized. To build on prior work that primarily emphasizes demographic differences in adoption, this study contributes by identifying underlying social and cultural factors that influence farmers' perceptions about and willingness to adopt soil conservation management practices in a rural region of Malawi. Key informant interviews were first conducted to identify constraints slowing composting adoption, which were then used to structure the creation of participatory videos—videos created with the active participation of local farmers that demonstrated compost manure practices and benefits. Farmers from the same communities subsequently participated in focus group discussions before and after the moderated screening and discussion of these videos in order to obtain a more in‐depth understanding of the constraints and possible ways to overcome them. Among the identified constraints to the use of composting were inefficient government programs such as the Farm Input Subsidy Program that contributed to a belief that only subsidized chemical fertilizers provided positive returns on investment, a lack of support from extension services that diminished compost use, social norms around gender that hindered women farmers from attempting to use composting, and livelihood strategy changes that led to labour shortages. Findings from the focus groups showed that the participatory video method encouraged adoption by helping farmers, and especially women, to reconsider composting, test it, and reflect upon social and cultural constraints impeding adoption. Over half of the farmers in the study tested composting for the first time after discussing the videos and changed their perception of both the value of composting and their own ability to use these types of soil conservation practices.

Nurturing natural capital

Nurturing natural capital

Agricultural Subsidies and Child Labour: Evidence from Malawi’s Farm Input Subsidy Programme

In response to the perennial low harvest and high food prices, a number of Sub-Saharan African countries have instituted agricultural input subsidy programmes to increase food production and reduce poverty among small-scale farmers. Given that agriculture employs a large portion of working children on the continent, this paper studies the effect of these subsidy programmes on child labour. The paper analyses three rounds of the Malawi Integrated Household Panel Survey to answer the research question. The econometric results show that the farm input subsidy program in Malawi has a significant and positive impact on child labour in the country. The results suggest that in spite of the success of the programme in achieving its core aims, there are unintended negative consequences that could negatively affect human capital development. This could in turn adversely affect the ultimate poverty eradication efforts in the country and in the sub-region. To mitigate this problem, governments and implementing agencies should consider conditioning the distribution of the inputs on positive outcome like the school performance of the wards of beneficiaries.

What does Malawi's Fertiliser Programme do to Private Sector Fertiliser Sales? A Quasi‐Experimental Field Study

AbstractMalawi implemented reforms to its Farm Input Subsidy Program (FISP) during the 2015/16 agricultural season that allowed certain large‐scale, private sector fertiliser dealers to sell subsidised fertiliser at their network of retail stores in select districts on a pilot basis. At the same time, small‐scale independent fertiliser dealers were excluded from participating in the pilot. We use a unique panel dataset of large‐scale corporate fertiliser dealers and small‐scale independent fertiliser dealers collected before and after the policy change to estimate the impacts of the FISP on those who participated in the pilot and those who did not, using a difference‐in‐differences estimator. Results indicate that large‐scale dealers who sold the FISP fertiliser under the pilot programme in 2015/16 did not have their commercial sales either crowded‐in or crowded‐out by the FISP pilot. Instead, the average volume of fertiliser sold at each of their retail stores increased by 59% due to an increase in subsidised fertiliser sales. Conversely, small‐scale independent fertiliser dealers who were not allowed participate in the pilot had their commercial sales crowded‐out by the programme. They experienced a 60% decline in the volume of commercial fertiliser sales on average at each store. This implies that the FISP reforms have mainly benefited large‐scale fertiliser dealers who sell 90% of the fertiliser in Malawi, but caused some harm to the many small‐scale independent fertiliser dealers who sell about 10% of the private sector's fertiliser in Malawi, but often operate their businesses in more remote areas.

Adoption of Drought Tolerant Maize Varieties under Rainfall Stress in Malawi

AbstractWe examine adoption of drought tolerant (DT) maize varieties using a four‐round panel dataset from six districts in Malawi. There is an increase in adoption of DT maize from 3% in 2006 to 43% in 2015 in our data. We focus on the effect of past drought exposure on adoption and the likelihood of DT maize being distributed under the Farm Input Subsidy Programme (FISP). Results show that past exposure to drought increases the probability of DT maize seed being distributed through FISP. Farmers who accessed maize seed subsidy coupons and were previously exposed to late season dry spells are more likely to use the seed subsidy coupon to redeem DT maize seed. The likelihood of adoption and adoption intensity (area under DT maize) are positively influenced by previous early season dry spells and access to seed subsidy. Previous late season droughts also positively affect adoption intensity. On the other hand, area share under DT maize is positively correlated with early season dry spells and past exposure to late season dry spells but negatively related to seed subsidy. FISP in Malawi appears to have stimulated adoption of DT maize directly through subsidy and indirectly through generating farmers’ experiences of the performance of DT varieties under drought conditions.

How diversified is cropping in Malawi? Patterns, determinants and policy implications

Micro- and macroeconomic evidence suggest that the promotion of agricultural diversification in agriculture-based developing countries is beneficial. At the microeconomic level, increased agricultural diversification promotes human nutrition and raises household incomes, while allowing farmers to adapt to the challenges posed by climate change. Using Malawi as a case study, we analyzed the recent patterns and determinants of farm level crop diversification in order to better understand how policies impact on diversification and how they can be better formulated or implemented to effectively promote diversification. The study used descriptive and econometric approaches to study crop diversification. Data from two nationally representative household surveys, which covered cropping seasons in 2004/05 and 2010/11, show that crop diversification has deteriorated nationally in different Agricultural Development Divisions (ADDs), although beneficiaries of the widely-implemented Farm Input Subsidy Program (FISP) have become more diversified. The study also found that crop diversification varies significantly across agro-ecological zones. Results also indicate that deliberately targeted policies lead to more commercially orientated crop diversification. We conclude that further crop diversification could be promoted among different types of farmers with the aim of contributing to economic growth, risk reduction, and nutrition security in Malawi.

Unraveling the effect of targeted input subsidies on dietary diversity in household consumption and child nutrition: The case of Malawi

Malawi’s Farm Input Subsidy Program (FISP) has generated significant attention, with several studies showing an increase in maize production since the inception of the program in 2005, but stagnating poverty levels. In this study, I examine whether and how FISP has affected dietary diversity in household food consumption and child nutrition. I find that children under the age of five living in households that received a voucher between 2008 and 2013 for the purchase of fertilizer have a statistically significantly higher (at the 1% level) weight-for-age, weight-for-length/height and body mass index than children living in non-recipient households. I also find that households having received a voucher consume cereals, nuts, vegetables, meats and fruits more frequently than non-recipient households. The analysis uses two stage least squares to account for the endogeneity of selection into the fertilizer subsidy program. I test the robustness of these results using child fixed effects. The results indicate that past studies evaluating FISP failing to account for the positive gains in child nutrition and household food consumption diversity may be underestimating its benefits.

Improving the efficiency targeting of Malawi's farm input subsidy programme: Big pain, small gain?

The Farm Input Subsidy Programme (FISP) in Malawi was introduced in the 2005/2006 season against a background of bad weather affecting production and prolonged food shortages. Vouchers are distributed empowering eligible farmers to exchange them for fixed quantities of inputs at subsidized prices. Since its inception, there has been a debate at national level about whether the FISP’s potential has been fully exploited, with policy makers exploring options to improve the programme. Proposals include targeting efficient and productive farmers to maximize returns. In this paper, we evaluate the effectiveness of these proposed changes to the existing FISP design by utilizing two waves of the LSMS-ISA survey merged with climatic data. We estimate how the national demand for agricultural inputs varies according to a variation in the targeting criteria by means of a two-stage demand system. Then, we identify more efficient farmers by means of a stochastic frontier approach. We observe a mismatch between voucher recipients and efficiency, with approximately 60% of vouchers being allocated to the three bottom quintiles of efficiency. This mismatch is observed also at the spatial level with more vouchers going to districts characterized by less efficient production. While concerns on the distributional impacts of the new criteria are discussed together with some suggestions for spatially diversifying the structuring of the policy and incentivizing crop diversification, our results highlight a high substitutability of commercial with subsidized inputs by new eligible farmers. Consequently, simulating the targeting policy variation we obtain an outcome that would lead only to a limited increases in predicted food expenditure ranging from 0.27% to 0.8% and maize production from 0.2% to 1.3. Scope for analysing different adjustments in the functioning of FISP are, thus, proposed to policy makers.

One Plus One can be Greater than Two: Evaluating Synergies of Development Programmes in Malawi

ABSTRACTThis paper investigates the interplay between the Social Cash Transfer Programme (SCTP) and the Farm Input Subsidy Programme (FISP) in Malawi. We take advantage of data collected from a 17-month evaluation of a sample of households eligible to receive SCTP, which also provided information about inclusion into FISP. We estimate two types of synergies: i) the complementarity between SCTP and FISP, that is whether the impact of both interventions run together is larger than the sum of the impacts of these interventions when run separately, and ii) the incremental impact of receiving FISP when a household already receives SCTP, as well as the incremental impact of receiving SCTP when a household already receives FISP. The analysis shows that there are synergies between the two policy interventions, mainly in terms of incremental impacts of each programme over the other, in increasing expenditure, agricultural production and livestock.