Presentation Outline

1. Policies for integrating Relief and Commercial market Sources of Agricultural Inputs: Agricultural Input Vouchers to target Poor Support to Poor Rural Farmers By Julius Mangisoni and Richard Kachule Centre for Agricultural Research & Development Bunda College of Agriculture Paper Presented at FANRPAN Stakeholders Regional Policy Dialogue and AMG Crossroads Hotel, Lilongwe, 2-5th September, 2008

2. Presentation Outline Background Purpose and Objectives of the Study Major Findings Potential Benefits Challenges

3. THE POTENTIAL OF USING AN INPUT VOUCHER SYSTEM TO INTEGRATE THE COMMERCIAL AND NON-COMMERCIAL INPUT DISTRIBUTION SYSTEMS:A CASE OF MALAWI, MOZAMBIQUE AND ZAMBIA

4. Background • Studies conducted in Malawi, Mozambique and Zambia • 2 parallel input distrbtn channels (comm. & non comm) identified. • Such parallel markets currently not well integrated.

5. OBJECTIVES cont… • To bring about policy changes for enhancing input supplies to small farmers. • To develop training materials for policy analysts to engage in complete policy analysis cycle. • To conduct training of policy analysts at national level.

6. MAJOR FINDINGS • key input in Zambia and Mozambique is seed via SV&F • key inputs in Malawi are hybrid seed and fertilizers used on maize (urea and 23:21:0+4S) and tobacco (CAN & D compound). • -smallholders in Malawi prefer OPVs

7. Registration of beneficiaries • Registration of beneficiaries -Zambian registration process more systematic and transparent than the Malawian process -Local leaders, NGOs, donors to play a supportive role in registration

8. Registration of beneficiaries -Evidence in Malawi and Zambia shows that some unintended beneficiaries benefited from the program due to: favoritism; selling of vouchers; selling of inputs acquired through vouchers; vouchers found with foreigners -Challenges in coordination between govt, input companies and other players led to more or fewer coupons being distributed.

9. Distribution network • Main fertilizer and seed companies involved:ADMARC, SFFRFM, Farmers World, Kulima Gold, Chipiku Stores, NASFAM, SEEDCO. • Zambia used a tendering process. Some traders left out. • Mozambique used SEMOC. • Mozambique and Malawi reported poor quality inputs were distributed in certain cases. • Quality of inputs were quite good in Zambia. • Late delivery of inputs was common to all countries.

10. Potential benefits of vouchers • Impact on smallholder farmers -Two year surplus production in Malawi -Progressive increase in yield from less than a tonne to 2.04MT/ha -Increased use of new technologies e.g. hybrid seed. -In Zambia stakeholders noted that it has potential to promote the development of farmers’ seed systems and allow quicker transactions between seed sellers and farmers. -In Mozambique, econometric estimation showed that emergency seed distribution is associated with 3-22% decrease in producers’ probability of buying commercial seed.

11. Potential benefits of vouchers • Commercial marketing -In Malawi, program allowed increase in private traders’ seed and fertilizer sales. Seed sales rose from 4000MT to 6700MT -Creation of competition amongst players -Involvement of the private sector led to improvements in timely distribution of inputs -Reopening of previously closed market outlets -Creation of employment. -In all countries, sellers allowed to expand network into rural areas, saved government distribution trouble.

12. CHALLENGES • Sustainability of the voucher system • Exit strategy • graduation of beneficiaries • Harmonization of policies in the region (cross border trade) • Input composition (Fert, seed, pesticides, equipment e.g treadle pumps) • Registration of beneficiaries(definition of beneficiaries) • Fraud and Corruption • Development of output markets (emphasis has been on production & not marketing) • Socio-economic benefits (change in beneficiaries’ status)

13. THANK YOU FOR YOUR ATTENTION 13

14. PHASE 3 OF FANRPAN INPUT VOUCHER STUDIES BY Julius Mangisoni Department of Agricultural & Applied Economics, Bunda College

15. 2 more courtiers added • Lesotho • Swaziland This is in addition to • Malawi • Mozambique & • Zambia

16. Lesotho and Swaziland • Review literature and document results of work on input vouchers from other countries such as Malawi, Zambia, Mozambique, Ethiopia and Kenya. • Introduce the results of the work on the input vouchers from the other countries to stakeholders such as government, NGOs, farmers and the private sector, particularly seed and fertilizer companies.

17. In consultation with stakeholders, design a study to assess the experience of Lesotho and Swaziland with input vouchers. • Assess and document the experiences of Lesotho and Swaziland with input vouchers.

18. Zambia and Mozambique • consultations with policy makers (government) and other key stakeholders and build on research and experiences to design a detailed input voucher implementation plan. • Develop an input voucher implementation plan and share this with the key stakeholders in order to achieve buy-in from the policymakers and stakeholders.

19. Assess whether an input voucher program can be included in the next national fiscal year budgets.

20. Malawi • Estimate costs and benefits of the input voucher program since its inception. • Estimate costs and benefits of alternative programs for distributing inputs to farmers such as farmer clubs. • Compare qualitatively and quantitatively the input voucher program being implemented by Government with alternatives and recommend the most cost-effective mechanism for distributing the inputs to smallholder farmers.

21. Assess challenges experienced in the implementation of the input voucher program. • Document lessons as a basis for better implementation of the input voucher program.

22. APPROACHES The study has two phases: Phase 1 • Literature review by each country node carried out and updated country studies on relief seed trade recently conducted in Malawi, Mozambique, South Africa and Zambia. Phase 2 • Rapid field research

23. THANK YOU