Chapter 21: Case Study 11. Input Subsidy Programme, Malawi
OVERVIEW The Input Subsidy Programme (ISP) in Malawi is a fertilizer and maize seed subsidy programme covering the entire country. It has operated since 2005/06 and 2006/07, and is a successor to earlier input subsidy schemes such as the Targeted Input Programme (2000–04) and Starter Pack (1998–2000). ISP is funded by the Government of Malawi and implemented by the Ministry of Agriculture, as well as by the public fertilizer distribution agencies Agricultural Development and Marketing Corporation (ADMARC) and the Smallholder Farmers Fertilizer Revolving Fund Malawi (SFFRFM). ISP is a coupon-based subsidy scheme. Eligible small maize farmers receive two coupons, one for 50 kilograms basal dressing (NPK 23–21–0) and one for 50 kilograms urea, entitling the holder to purchase the fertilizer at MK950 (US$6.8) per bag. Coupons are also issued to tobacco farmers for compound D and CAN (‘tobacco fertilizers’). In 2005/06 the subsidized purchase price of tobacco fertilizers was higher than for maize, at MK1450 (US$10.4) per bag, while in 2006/07 the single price of MK950 per bag was used across all fertilizers. In addition, in 2006/07 maize seed coupons were issued permitting purchase at MK400 per 3-kilogram bag. The overall cost of the scheme, net of sales revenue, was US$51.4 million in 2005/06 and US$73.9 million in 2006/07, representing almost half of the Ministry of Agriculture’s budget in 2006/07. Donors contributed around 13 per cent of net costs in 2006/07, mainly covering seed supply, transport and logistics (Dorward et al., 2008)...
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