552
Conditioning access to input subsidies on adoption of soil fertility management and
climate-smart technologies (Snapp et al. 2014) is potentially a remedy to solve the
problem of resource substitution and enhance the positive impact of the program.
This chapter discusses the impact of subsidized inorganic fertilizer and integration
of inorganic and organic fertilizer on maize productivity. The chapter further discusses suggestions on enhancing the impact of FISP by targeting the application of
subsidized inorganic fertilizer on soils where CSA technologies have been used.
This review is necessary for Malawi as FISP remains a priority policy tool for the
government (Snapp et al. 2014), at least in the foreseeable future. The results are
also of policy relevance beyond Malawi given the global popularity of the current
Malawi FISP. Some countries in SSA have used (Messina et al. 2017) or may use
the Malawi FISP model to introduce their own farm input subsidies, and the conclusions of this chapter may be applicable in their settings.
3 Background and Implementation of the Farm Input
Subsidy Program Vis-à-Vis Climate-Smart Agriculture
Technologies
Farm input subsidies are government programs through which farmers receive farm
inputs at below-market prices (Jayne et al. 2018). Smallholder farmers, particularly
in SSA, face the low-input/low-output poverty trap exacerbated by market failures
(Dorward et al. 2008). Input subsidies break this trap by reducing input cost and
overcome market failures. The first set of input subsidies were introduced in the late
1960s in most African countries including Malawi (Chirwa and Dorward 2013;
Wiggins and Brooks 2010). Such subsidies were implemented as across-the-board
price subsidies and were universal, accessed by all producers.
In Malawi, the government funded a universal fertilizer subsidy in addition to
providing cheap credit for smallholders through the state-run Agricultural
Development and Marketing Corporation (ADMARC) and Smallholder Agricultural
Credit Administration. Such policy instruments were responsible for the national
food self-sufficiency in non-drought years, until early 1990s when the economic
policy regimes changed and the country adopted economic liberalization, and farm
input subsidies were removed. Agricultural markets were liberalized, the smallholder agricultural credit system collapsed, and the local currency was sharply
devalued (Chinsinga and Poulton 2014). Farm inputs eventually became unaffordable to most smallholder farmers, and this resulted in dismal maize production.
Exacerbated by an influx of Mozambican refugees and regular droughts, the country
shifted from national food self-sufficiency to food deficit and reliance on food
imports (Chinsinga 2008; Chinsinga and Poulton 2014).
In response, the government introduced the Starter Pack Scheme (SPS) in
1998–1999, which was heavily supported by the UK’s Department for International
Development (DFID) (Chirwa 2010). The SPS consisted of free inputs containing
S. P. Katengeza
Conditioning access to input subsidies on adoption of soil fertility management and
climate-smart technologies (Snapp et al. 2014) is potentially a remedy to solve the
problem of resource substitution and enhance the positive impact of the program.
This chapter discusses the impact of subsidized inorganic fertilizer and integration
of inorganic and organic fertilizer on maize productivity. The chapter further discusses suggestions on enhancing the impact of FISP by targeting the application of
subsidized inorganic fertilizer on soils where CSA technologies have been used.
This review is necessary for Malawi as FISP remains a priority policy tool for the
government (Snapp et al. 2014), at least in the foreseeable future. The results are
also of policy relevance beyond Malawi given the global popularity of the current
Malawi FISP. Some countries in SSA have used (Messina et al. 2017) or may use
the Malawi FISP model to introduce their own farm input subsidies, and the conclusions of this chapter may be applicable in their settings.
3 Background and Implementation of the Farm Input
Subsidy Program Vis-à-Vis Climate-Smart Agriculture
Technologies
Farm input subsidies are government programs through which farmers receive farm
inputs at below-market prices (Jayne et al. 2018). Smallholder farmers, particularly
in SSA, face the low-input/low-output poverty trap exacerbated by market failures
(Dorward et al. 2008). Input subsidies break this trap by reducing input cost and
overcome market failures. The first set of input subsidies were introduced in the late
1960s in most African countries including Malawi (Chirwa and Dorward 2013;
Wiggins and Brooks 2010). Such subsidies were implemented as across-the-board
price subsidies and were universal, accessed by all producers.
In Malawi, the government funded a universal fertilizer subsidy in addition to
providing cheap credit for smallholders through the state-run Agricultural
Development and Marketing Corporation (ADMARC) and Smallholder Agricultural
Credit Administration. Such policy instruments were responsible for the national
food self-sufficiency in non-drought years, until early 1990s when the economic
policy regimes changed and the country adopted economic liberalization, and farm
input subsidies were removed. Agricultural markets were liberalized, the smallholder agricultural credit system collapsed, and the local currency was sharply
devalued (Chinsinga and Poulton 2014). Farm inputs eventually became unaffordable to most smallholder farmers, and this resulted in dismal maize production.
Exacerbated by an influx of Mozambican refugees and regular droughts, the country
shifted from national food self-sufficiency to food deficit and reliance on food
imports (Chinsinga 2008; Chinsinga and Poulton 2014).
In response, the government introduced the Starter Pack Scheme (SPS) in
1998–1999, which was heavily supported by the UK’s Department for International
Development (DFID) (Chirwa 2010). The SPS consisted of free inputs containing
S. P. Katengeza