1

FISP Implementatio

n 2012/13

Wednesday, 11th July 2013

Andrew Dorward, Ephraim Chirwa, Mirriam Matita, Wezi

Mhango, Peter Mvula School of Oriental and African Studies,

University of LondonWadonda Consult

Outline

Objective – consideration of critical issues for cost effective impact of FISP

Costs Overall costs Tender prices

Impacts Incremental production

Yield responses, displacement & diversionTimingScale, targeting & allocation , distribution,

receipts, redemption & coupon use Maize price impacts Supplier impacts

2July 2013

Information sources

Preliminary report implementation reports (predominantly Logistics Units

weekly reports and annual report), Preliminary analysis of key implementation data from

household survey, sample of 2000 households across 14 districts in the 3 regions, in all livelihood zones

Full report (end August) All the above, with full analysis of relevant household

survey data focus group discussions, key informant interviews with

different stakeholders (Ministry of Agriculture & local government staff, retailers, and different categories of rural people)

‘community survey’ with key informant groups in sampled villages

reports by other organisations

3July 2013

COSTSOverall costsTender pricesFarmer contribution

4July 2013

Programme costs

5July 2013

0

50

100

150

200

250

300

2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13

US$ millionsTotal estimated other costsOtherTransport CostsNet fertiliserSeeds – maize Seeds - flexi / legumes

0

50

100

150

200

250

300

2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13

US$ millionsTotal estimated other costsOtherTransport CostsNet fertiliserSeeds – maize Seeds - flexi / legumesAnnual budget

Programme costs

6July 2013

0

50

100

150

200

250

300

2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13

US$ millionsTotal estimated other costsOtherTransport CostsNet fertiliserSeeds – maize Seeds - flexi / legumesAnnual budgetMalawi GovernmentDirect Donor Support

Programme costs

7July 2013

Tendering

Initial tender call March 2012 opened in May Second call July 2012 awarded mid September

8July 2013

740

760

780

800

820

840

860

880

900

Yafuka

Price NPK, $/mt

Suppliers

Chirimba Kanengo Luwinga740

760

780

800

820

840

860

880

900

Yafuka

Price Urea, $/mt

Suppliers

Chirimba Kanengo Luwinga

Optichem

ParamountRAE

OptionsMzati

ADMARCI Investment

SFFRFM

SFFRFM

ADMARC

0

100

200

300

400

500

600

700

800

900

1,000

2009 2010 2011 2012

Price US$/MT

NPK, landed in depots Urea, landed in depotsDAP, international Urea, E. Europe, BulkFISP cost in markets US$/MT FAM prices US$/MT

Fertiliser cost & price comparisons

9July 2013

2012/13 exchange rate: 365MK/US$

Farmer contributions

Farmer contributions have fallen since establishment of FISP from around 35% to 3% of fertiliser cost

10July 2013

0%

5%

10%

15%

20%

25%

30%

35%

40%

2005/6 2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13

IMPACTS Incremental production, displacement &

diversion Yield responses Timing Scale of programme Targeting & coupon use

Maize price impactsSupplier impacts

11July 2013

Yield responses

Difficulties in obtaining reliable information on smallholder yields and yield responses

New information from commissioned maize simulation study under smallholder conditions (Anthony Whitbread et al, Goettingen University)

Historical weather records (1928 -2004) Different soils Smallholder crop management (planting times,

weeding regimes, fertiliser rates and timing, plant densities, varieties)

Realistic results Average yields Critical yield factors Nutrient (nitrogen and phosphate responses)

12July 2013

Illustrative N Response, hybrid without & with P

13July 2013

Illustrative N Response, local without & with P

14July 2013

Simulated yield response

Good potential returns to N and impact Importance of

hybrid seed early planting good agronomy potential for lower N rates variable returns to N

Planned further work Further analysis of simulation results Analysis of On Farm Trial results Analysis of IHS3 crop data Analysis of Crop Cutting data Incremental legume production?

15July 2013

Timing

early planting needs early access to seed & fertiliser ……….

16July 2013

7

8

9

10

11

12

Fertilisertenders

Voucherallocations

Transporttenders

Voucherprinting

Voucher &lists to

districts

Seedsupply

contracts

Month

2006/7

2007/8

2008/9

2009/10

2010/11

2011/12

2012/13

Completion of contracts & voucher processes

17July 2013

Depot receipts timing, % parastatal fertiliser sales

18July 2013

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

End Sept % End Oct % End Nov % End Dec %

2006/7

2007/8

2008/9

2009/10

2010/11

2011/12

2012/13

Uplifts timing, % total by month

19July 2013

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

End Sept % End Oct % End Nov % End Dec %

Uplifts % total

2006/7

2007/8

2008/9

2009/10

2010/11

2011/12

2012/13

Targeting: allocations, distribution & access

Good targeting should promote: Low diversion / losses Low displacement Effective input use Poor & vulnerable

1. Scale of programme & disbursements2. Area targeting:

regional & district distribution3. Household targeting:

beneficiary characteristics coupon access & redemption

20July 2013

21July 2013

Subsidy sales : fertilisers

0

50

100

150

200

250

2005/6 2006/7 2007/8 2008/9 2009/102010/112011/122012/13

Fertiliser sales ('000 MT)

Actual tobaccofertiliser

Actual maizefertiliser

Fertiliserbudgeted

22July 2013

Subsidy sales : fertilisers & seeds

0

2

4

6

8

10

12

0

50

100

150

200

250

2005/6 2006/7 2007/8 2008/9 2009/102010/112011/122012/13

Seed sales ('000MT)

Fertiliser sales ('000 MT)

Axis Title

Actual tobaccofertiliser

Actual maizefertiliser

Fertiliserbudgeted

Maize seed

Hybrid seed

Legume seed

Total fertiliser voucher redemptions (millions)

23July 2013

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2005/6 2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13

North Centre South All

0.0

0.5

1.0

1.5

2.0

2.5

2005/6 2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13

North Centre South All

0.0

0.5

1.0

1.5

2.0

2.5

2005/6 2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13

North Centre South All

Fertiliser vouchers redeemed per farm family

24July 2013

MoAFS farm families

NSO rural households

Beneficiaries per farm family by district

25July 2013

0%

10%

20%

30%

40%

50%

60%Ch

ikhw

awa

Nsa

nje

Lilo

ngw

eD

edza

Man

goch

iM

achi

nga

Kasu

ngu

Nkh

ota

Kota

Karo

nga

Ntc

hisi

Mul

anje

Salim

aM

chin

jiN

khat

a Ba

yD

owa

Mzi

mba

Bala

kaN

tche

uZo

mba

Chira

dzul

uCh

itipa

Nen

oBl

anty

reM

wan

zaTh

yolo

Liko

ma

Phal

ombe

Rum

phi

How many coupons received by how many households?

26July 2013

2.7 million (NSO) or 4.4 million (MoAFS) rural/ farm households?Note: Receipts by urban households are omitted (about 5% of rural receipts)

2012/13 2010/11 2008/9

Fert. MaizeLegum

e Ferti. Maize Legume Fert. Flex

Coupons received per hhold

0.78 0.39 0.28 1.13 0.68 0.41 1.12 0.57Estimated total coupons, NSO hh ('000)

2,131 1,078 776 2,733 1,613 968 2,794 1,419Estimated total coupons , MoAFS hh ('000)

3,427 1,733 1,247 4,420 2,649 1,600 4,108 2,087

MoAFS Total Voucher redemptions ('000)

2,979 1,529 1,427 3,183 1,988 1,363 4,046 2,758

Fertiliser Coupon Receipts & Targeting

27July 2013

  Coupons/hh

2012/13 2010/11 2008/9 2006/7

0>0 to

1>1 Mean 0 Mean 0 Mean 0 Mean

North  47% 9% 43% 2.22 24% 1.81 28% 2.03 38% 1.9Centre 41% 47% 12% 1.09 31% 1.34 35% 1.42 45% 1.7South 38% 43% 19% 1.30 11% 1.46 33% 1.49 49% 1.7National 40% 41% 19% 1.30 21% 1.44 33% 1.52 46% 1.7Poor 45% 42% 13% 1.14 29% 1.29 25% 1.34 50% 1.49Ovutika 36% 44% 19% 1.32 19% 1.42 20% 1.39 35% 1.6Ovutikilako 38% 38% 24% 1.34 21% 1.42 24% 1.56 30% 1.91>=wapakatikati

47% 27% 27% 1.74 17% 1.69 24% 1.6 26% 2.81

Perceptions of likelihood of different types of people getting coupons

28July 2013

Scores: 1 = more likely; 2= no difference; 3 = less likely

  

Total

Poor people 1.97Female headed hh 2.07More productive farmers

2.09

Hh with orphans 2.04Better off hh 2.12Civil servants & teachers

2.48

VDC members 1.79

Average scores mostly around 2: no difference – no apparent clear targeting

29July 2013

  Open meetings inRedistr-ibution?

Suppl-ementary? 

Allocation

Distribution

North 97% 98% 37% 1%Centre 65% 77% 64% 2%South 70% 77% 66% 17%Total 71% 79% 62% 9%

Fertiliser voucher allocation & distribution: open meetings?

 

Village head/TA

VDC Agric. staff

Villagers in open

meeting North 67% 21% 0% 6%Centre 79% 8% 4% 4%South 69% 8% 4% 5%Total 73% 9% 4% 5%

But who actually decides on allocations?

Fertiliser voucher allocation & distribution: beneficiary List

30July 2013

  

List? Public?

Place publishedVillage head house

School/Health Centre

Agric. Office

ADMARC/Input

MarketNorth 95% 7% 75% 0% 11% 7%Centre 73% 40% 66% 27% 0% 3%South 76% 46% 59% 22% 3% 9%National

77% 38% 63% 23% 2% 7%

When published?Seen by

hh?

HH member included?

<=Oct Nov Dec JanNorth 38% 45% 10% 7% 31% 87%Centre 46% 39% 14% 1% 36% 80%South 51% 42% 4% 2% 33% 81%National

49% 41% 8% 2% 34% 82%

Beneficiary List – perceived receipts by listed householdsAmong those who saw the list… % who think nearly all those listed received

31July 2013

at least part of a fertiliser coupon

two or more

fertiliser coupons

North 61% 22%Centre 34% 6%South 75% 23%National 56% 16%

Perceptions of quality of allocation & distribution processes

32July 2013

Scores: 4 = very good; 3= good; 2 = not good not bad; 1= bad; 0 = very bad

0

0.5

1

1.5

2

2.5

3

3.5

2005/6 2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13

Number of coupons Timing of distribution

Distribution methods Allocation criteria

Preferences for targeting criteria

33July 2013

Scores: 4 = very good; 3= good; 2 = not good not bad; 1= bad; 0 = very bad

0

0.5

1

1.5

2

2.5

3

3.5

2008/9 2010/11 2012/13

targeting ‘the poor ‘ (100kg)targeting ‘the productive ‘ (100kg)

for all hh, with ½ the amount (50kg)

Coupon payments

Just over 1% of fertiliser coupons were reported as obtained with some payment (2% in 2010/11, 5% in 2008/9 and 2006/7)

Reported sources included traders, TAs and headmen, and agricultural staff, with traders about twice as common as each of the others

Reported prices varied from MK200 to MK6,500 (with a mean of around MK1750 and median of around MK750

34

Coupon use and redemption

95% fertiliser coupons & 97% maize seed coupons and 91% legume seed coupons used to buy inputs

Limited coupon sales (5% fertiliser coupons, v few seed coupons)

9% of households paid a ‘tip’ to redeem their fertiliser coupon (same as in 2010/11, 14% in 2008/9, 20% in 2006/7), most commonly paid between MK750 and MK1,000 extra. Mean redemption payment was around MK1,300

35

Coupon redemption

36July 2013

Hours travel & waiting

Transport & misc expenses

(MK)

Distance to nearest

ADMARC / SFFRFM (km)

Distance to nearest

private selling point (km)

Median Median Median Median2012/13

8 250 5 6

2010/11 12 200 4 62008/8 9 200 5 82006/7 7 150 5 5

Coupon redemption

Most beneficiaries got the fertiliser they wanted (99%) Maize seed beneficiaries: 84% got the variety they

wanted, 13% wanted a different hybrid variety, very few (around

1%) wanted but could not have an OPV. Legume seed beneficiaries: 94% of beneficiaries got

what they wanted

37July 2013

Seed coupon redemptions: variety shares

38July 2013

Household survey

Reported sales (LU)

Maize seed redemptions

Hybrid 85% 78%

OPV 15% 22%

Legume seed redemptionsBeans seed 17% 23%

Cow peas seed 1% 1%

Groundnuts seed 59% 65%

Soya Seed 14% 8%

Pigeon pea 2% 2%

Coupon redemption: financing

39July 2013

General savings

GanyuFamily/

neighboursOther

2012/13 62% 20% 7% 9%

2010/11 72% 15% 5% 8%

2008/9 77% 11% 6% 5%

Serious redemption problems experienced, % customers by outlets

40July 2013

Fertiliser Maize seedADMAR

CSFFRM

Parastatal

ChainAgrodeale

rLong queues 47% 50% 32% 14% 7%Queue jumping 37% 47% 23% 9% 5%Scrambling/fighting

34% 21% 30% 16% 12%

Vendors  33% 27% 22% 4% 3%Long distance 32% 25% 16% 4% 10%Slow service 28% 34% 13% 3% 3%Gender violence 26% 15% 18% 5% 2%Late /early hours 24% 23% 11% 7% 2%Demands for ‘tips’

21% 9% 9% 9% 2%

Input shortages 20% 13% 8% 3% 1%No M/F toilets 18% 25% 13% 3% 5%No toilets 17% 23% 15% 7% 6%Sexual demands 11% 4% 3% 6% 1%Abusive language

8% 0% 3% 3% 0%

No drinking water

3% 1% 1% 6% 0%

Stake holder roles in fertiliser redemption (% respondents)

41July 2013

ADMARC SFFRFM

Not present

Present Not presen

t

Present

Helpful Problem HelpfulProble

mVendors 59% 2% 29% 72% 0% 23%Police 42% 51% 2% 44% 53% 0%VDC members

27% 61% 3% 29% 59% 1%

Market committee

57% 24% 3% 52% 32% 0%

Village head 13% 75% 3% 10% 83% 1%Market Clerk 49% 32% 5% 50% 32% 0%Other Market officials

60% 19% 4% 63% 18% 0%

Politician 85% 5% 1% 88% 7% 0%Agricultural Officials

56% 28% 2% 60% 29% 1%

Subsidised input use

42

Almost all coupon fertiliser was used in people’s own garden or shared with others (3%), and almost all was applied to different maize varieties

Local 26%

OPV 11%

Hybrid 63%

Burley 0%

Almost all coupon seed was used in people’s own gardens.

 Hybrid maize

OPV maize

Soya seed

G/Nuts seed

Beans seed

Other specify

Pigeon pea

Own garden

96% 92% 88% 87% 80% 100% 92%

Shared 1% 2% 2% 1% 1% 0% 0%Sold 0% 0% 0% 0% 1% 0% 0%Kept 2% 6% 5% 2% 1% 0% 0%Other 1% 0% 5% 9% 17% 0% 8%

Diversion? Transport losses?

No of companies commissioned2008/09 232009/10 262010/11 252011/12 232012/13 43

Logistics Unit reported 608MTS lost (0.4%) & MK108 mill (0.2%)

Logistics Unit also reported 4,902MT stock balance expected (3.2% of voucher redemptions)

Tampered vouchers: 13,083 (0.4%)

43July 2013

Input supply impacts: fertiliser procurement from private co. & parastatals

44July 2013

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

50

100

150

200

2005/6 2006/7 2007/8 2008/9 2009/102010/112011/122012/13

'000 metric tons

Brought forward MTS Parastatal tenders MTS

Private sector tenders MTS Private sector % new supplies

Outstanding invoice payments by season

45July 2013

0%

10%

20%

30%

40%

50%

60%

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13

MK billion End Nov (MK bill)

End Dec (MK bill)

End Jan (MK bill)

End Nov %

End Dec %

End Jan %

Summary / conclusions

Cost control – good as regards budgeted costs, potential for reducing costs & diversion with larger farmer contributions

Timing of tender processes is critical (but if earlier then other processes & transport /storage may become limiting)

Preliminary simulation yield response information is promising, & suggests positive returns to FISP and importance of early input access

Targeting – there are declining fertiliser coupons per hh, a more even regional balance, & no clear household targeting. Open meetings & beneficiary lists are being implemented, but more enforcement of their proper use is needed

Redemption problems reported are much as expected & need on-going attention

Difficult to estimate scale of diversion – needs careful attention & constant innovation (coupon security is better but transport security a concern…)

46July 2013

47

Thank you

This material has been funded by UKaid from the Department for International Development; however the views expressed do not necessarily reflect the organisations’ official policies.