Malawi’s Farm Input Subsidy Program (FISP) has dominated agriculture and food security policy debates since its inception in 2005/06. Yet, after eight years of intensive research and program evaluation, opinion about FISP’s impact and its overall desirability remains divided. This reflects the fact that FISP is partly motivated by political reasons; that the socio-economic criteria against which FISP should be evaluated is not always clear; and that data quality remains a challenge, which means conclusions drawn often depend on judgment calls about how data should be interpreted. As explained in a recent presentation by MaSSP’s Karl Pauw, the more pessimistic view is that on-farm productivity gains for FISP beneficiaries have been minimal. This only led to small increases in maize production, which in turn had limited spillover effects in terms of farm wage increases, maize price declines, and poverty reduction (as per official estimates). Others are much more optimistic about the marginal productivity benefits of increased fertilizer use, and hence the direct and indirect benefits of the program. MaSSP has been closely involved in research and debates around FISP impact and poverty outcomes in Malawi. Following a successful MaSSP research dissemination workshop in April 2014 entitled, we partnered with Lilongwe University of Agriculture and Natural Resources to host the National FISP Symposium in July 2014. Two UNU-WIDER/MaSSP studies that featured prominently at both these events are now available as UNU-WIDER Working Papers.
- Pauw, K., Beck, U., and Mussa, R. 2014. Did rapid smallholder-led agricultural growth fail to reduce rural poverty? Making sense of Malawi’s poverty puzzle. WIDER Working Paper No. 2014/123 (October 2014)
- Arndt, C., Pauw, K., and Thurlow, J. 2014. The economywide impacts and risks of Malawi’s farm input subsidy programme. WIDER Working Paper No. 2014/099 (July 2014)
The poverty study presents much more optimistic poverty outcomes for Malawi between 2004/05 and 2010/11 compared to official estimates, including a substantial 7.3 percentage point decrease in national poverty, driven largely by a sharp reduction in rural poverty. These results, the authors argue, are more consistent with the observed level of economic growth and improvements in several non-monetary dimensions of well-being. The FISP study adopts a unique economywide method to program evaluation and reports potentially substantial indirect benefits of the program, arising from, inter alia, more efficient land allocation, maize price declines, and wage increases. Compared to partial equilibrium evaluation approaches, this general approach shows that the program can still yield net benefits even at relatively low fertilizer use efficiency rates.
