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Malawi input voucher study: A literature review on agricultural marketing and input voucher systems - Phase 1
June 2007
Richard N Kachule and Thabbie MS Chilongo


Abstract

Conducted mainly through a desk study, this paper aimed at giving an overview of the agricultural sector in general and specifically, agricultural input marketing, voucher systems and the policy environment in Malawi. The agricultural sector in Malawi is dualistic where the smallholder and estate sub-sectors live side by side. This dualism was inherited from the colonial era but was also perpetuated soon after independence. Owing to its strategy on export-oriented growth, the post-independent Malawi formulated its policies in favour of the estate sub-sector such as limiting the production of high value crops such as burley tobacco to the estates. Thus the smallholder farmers were confined to producing low value mostly subsistence crops. Nevertheless, the smallholder sector still received some support from the government in form of subsidies up until mid 1990s. The structural adjustment programmes (SAPs) necessitated input market liberalization, which consequently led to the removal of the subsidies. Although liberalization led to a substantial increase in the number of input merchants, however, it also led to a sharp increase in input prices. In an attempt to alleviate the plight of those affected by declining agricultural productivity, the government, in collaboration with the donor community and various NGOs has had a number of interventions. Notable among these interventions were the Starter Pack Initiative, Targeted Input Programme and a policy reversal to the in subsidy programme from 2005/06 season. While the subsidy programme was conceived as a universal, vouchers were used to ensure that fertilizer was received by Malawian farmers, given the large amount of cross border trade and slowed down the speed of purchasing large consignments, discouraging traders. Some of the major challenges encountered so far with the vouchers include: identification and targeting of beneficiaries and conflict between government and private sector participation.

Despite having its own mineral resource raw materials for production of inorganic fertilizer, Malawi is a net importer of fertilizer. Malawi, however, does have fertilizer blending and granulation plants. Worthy noting is also the fact that Malawi does not have a clear and coherent policy on fertilizer. The country normally, embarks on ad hoc programs based on cabinet directives and sometimes motivated by donors. However, the country has a Fertilizer Act of 2003, which aims at protecting the consumer and persons selling fertilizer in Malawi by assuring that all fertilizer sold or offered for sale in Malawi is in compliance with the provisions of the Act and any regulations enacted under the Act. In contrast, the seed sector has both its policy and Act of Parliament. Malawi’s seed sector is highly dominated by hybrid maize and tobacco. Hybrid maize is principally traded by private sector while tobacco seed is traded by the Agricultural Research and Extension Trust (ARET).

Theoretically, the policy cycle consists of five interconnected steps of problem definition, agenda setting, policy formulation, implementation and restatement of policy or policy termination. Malawi’s experience on policy formulation may be categorized into three administrative periods namely the colonial era, the post colonial era and the multiparty democratic era. The colonial era saw most of the policies being imposed by the colonial masters without the involvement of the indigenous people in the formulation process. During the immediate post colonial era, the trend was almost similar to that of the colonial era in that much focus and emphasis in the agricultural sector was given to the estate sub-sector as the engine of growth. With the advent of multiparty politics and democratic rule a series of policy reforms were initiated in the agriculture and other sectors. The recent policy reforms have followed the theoretical process of a policy cycle with a wider participation of stakeholders at various levels.

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