1. 1
FISP
Implementation
2012/13
Wednesday, 11th
July 2013
Andrew Dorward, Ephraim Chirwa,
Mirriam Matita, Wezi Mhango,
Peter Mvula
School of Oriental and African Studies,
University of London
Wadonda Consult

2. Outline
 Objective – consideration of critical issues for cost
effective impact of FISP
 Costs
 Overall costs
 Tender prices
 Impacts
 Incremental production
Yield responses, displacement & diversion
Timing
Scale, targeting & allocation , distribution,
receipts, redemption & coupon use
 Maize price impacts
 Supplier impacts
2July 2013

3. 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

4. COSTS
Overall costs
Tender prices
Farmer contribution
4July 2013

5. 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$ millions
Total estimated other costs
Other
Transport Costs
Net fertiliser
Seeds – maize
Seeds - flexi / legumes

6. 0
50
100
150
200
250
300
2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13
US$ millions
Total estimated other costs
Other
Transport Costs
Net fertiliser
Seeds – maize
Seeds - flexi / legumes
Annual budget
Programme costs
6July 2013

7. 0
50
100
150
200
250
300
2006/7 2007/8 2008/9 2009/10 2010/11 2011/12 2012/13
US$ millions
Total estimated other costs
Other
Transport Costs
Net fertiliser
Seeds – maize
Seeds - flexi / legumes
Annual budget
Malawi Government
Direct Donor Support
Programme costs
7July 2013

8. 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 Luwinga
740
760
780
800
820
840
860
880
900
Yafuka
Price Urea,
$/mt
Suppliers
Chirimba Kanengo Luwinga
Optichem
Paramount
RAE
Options
Mzati
ADMARC
I Investment
SFFRFM
SFFRFM
ADMARC

9. 0
100
200
300
400
500
600
700
800
900
1,000
2009 2010 2011 2012
Price US$/MT
NPK, landed in depots Urea, landed in depots
DAP, international Urea, E. Europe, Bulk
FISP cost in markets US$/MT FAM prices US$/MT
Fertiliser cost & price comparisons
9July 2013
2012/13 exchange rate: 365MK/US$

10. 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

11. IMPACTS
 Incremental production, displacement &
diversion
 Yield responses
 Timing
 Scale of programme
 Targeting & coupon use
 Maize price impacts
 Supplier impacts
11July 2013

12. 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

13. Illustrative N Response, hybrid
without & with P
13July 2013

14. Illustrative N Response, local
without & with P
14July 2013

15. 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

16. Timing
 early planting needs early access to seed &
fertiliser ……….
16July 2013

17. 7
8
9
10
11
12
Fertiliser
tenders
Voucher
allocations
Transport
tenders
Voucher
printing
Voucher &
lists to
districts
Seed
supply
contracts
Month
2006/7
2007/8
2008/9
2009/10
2010/11
2011/12
2012/13
Completion of contracts &
voucher processes
17July 2013

18. 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

19. 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

20. Targeting: allocations, distribution
& access
 Good targeting should promote:
 Low diversion / losses
 Low displacement
 Effective input use
 Poor & vulnerable
1. Scale of programme & disbursements
2. Area targeting:
 regional & district distribution
1. Household targeting:
 beneficiary characteristics
 coupon access & redemption
20July 2013

21. 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 tobacco
fertiliser
Actual maize
fertiliser
Fertiliser
budgeted

22. 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 tobacco
fertiliser
Actual maize
fertiliser
Fertiliser
budgeted
Maize seed
Hybrid seed
Legume seed

23. 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

24. 0.0
0.5
1.0
1.5
2.0
2.5
2005/6 2006/7 2007/8 2008/9 2009/102010/112011/122012/13
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
household
s

25. Beneficiaries per farm family
by district
25July 2013
0%
10%
20%
30%
40%
50%
60% Chikhwawa
Nsanje
Lilongwe
Dedza
Mangochi
Machinga
Kasungu
NkhotaKota
Karonga
Ntchisi
Mulanje
Salima
Mchinji
NkhataBay
Dowa
Mzimba
Balaka
Ntcheu
Zomba
Chiradzulu
Chitipa
Neno
Blantyre
Mwanza
Thyolo
Likoma
Phalombe
Rumphi

26. 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. Maize Legume Ferti. Maize Legume Fert. Flex
Coupons received per hhold
0.78 0.39 0.28 1.13 0.68 0.41 1.12 0.57
Estimated total coupons, NSO hh ('000)
2,131 1,078 776 2,733 1,613 968 2,794 1,419
Estimated 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

27. 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% 1.9
Centre 41% 47% 12% 1.09 31% 1.34 35% 1.42 45% 1.7
South 38% 43% 19% 1.30 11% 1.46 33% 1.49 49% 1.7
National 40% 41% 19% 1.30 21% 1.44 33% 1.52 46% 1.7
Poor 45% 42% 13% 1.14 29% 1.29 25% 1.34 50% 1.49
Ovutika 36% 44% 19% 1.32 19% 1.42 20% 1.39 35% 1.6
Ovutikilako 38% 38% 24% 1.34 21% 1.42 24% 1.56 30% 1.91
>=wapakati
kati
47% 27% 27% 1.74 17% 1.69 24% 1.6 26% 2.81

28. 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 1.97
Female headed hh 2.07
More productive farmers 2.09
Hh with orphans 2.04
Better off hh 2.12
Civil servants & teachers 2.48
VDC members 1.79
Average scores mostly around 2: no difference – no
apparent clear targeting

29. 29July 2013
Open meetings in
Redistr-
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?

30. Fertiliser voucher allocation
& distribution: beneficiary List
30July 2013
List? Public?
Place published
Village
head
house
School/Health
Centre
Agric.
Office
ADMARC/
Input
Market
North 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 Jan
North 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%

31. Beneficiary List – perceived receipts
by listed households
Among 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%

32. 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

33. 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)

34. 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

35. 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

36. 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 Median
2012/13 8 250 5 6
2010/11 12 200 4 6
2008/8 9 200 5 8
2006/7 7 150 5 5

37. 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

38. Seed coupon redemptions:
variety shares
38July 2013
Household
survey
Reported sales
(LU)
Maize seed redemptions
Hybrid 85% 78%
OPV 15% 22%
Legume seed redemptions
Beans seed 17% 23%
Cow peas seed 1% 1%
Groundnuts seed 59% 65%
Soya Seed 14% 8%
Pigeon pea 2% 2%

39. Coupon redemption: financing
39July 2013
General
savings
Ganyu
Family/
neighbours
Other
2012/13 62% 20% 7% 9%
2010/11 72% 15% 5% 8%
2008/9 77% 11% 6% 5%

40. Serious redemption problems
experienced, % customers by outlets
40July 2013
Fertiliser Maize seed
ADMAR
C
SFFRM Parastatal Chain Agrodealer
Long 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%

41. Stake holder roles in fertiliser
redemption (% respondents)
41July 2013
ADMARC SFFRFM
Not
present
Present Not
present
Present
Helpful Problem Helpful Problem
Vendors 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%

42. 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%

43. Diversion?
 Transport losses?
 No of companies commissioned
2008/09 23
2009/10 26
2010/11 25
2011/12 23
2012/13 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

44. 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

45. 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 %

46. 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. 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.