Malawi input voucher study: a literature review on agricultural marketing and input voucher systems

The agricultural sector in Malawi is dualistic where the smallholder and estate sub-sectors live side by side. This dualism was inherited from the colonial era but was also perpetuated soon after independence. Owing to its strategy on export-oriented growth, the post-independent Malawi formulated its policies in favour of the estate sub-sector, such as limiting the production of high value crops (e.g. tobacco) to the estates. Thus the smallholder farmers were confined to producing low value, mostly subsistence crops. Nevertheless, the smallholder sector still received some support from the government in form of subsidies up until the mid 1990s. The structural adjustment programmes (SAPs) necessitated input market liberalisation, which consequently led to the removal of the subsidies. Although liberalisation led to a substantial increase in the number of input merchants, however, it also led to a sharp increase in input prices. In an attempt to alleviate the plight of those affected by declining agricultural productivity, the government, in collaboration with the donor community and various NGOs has had a number of interventions. In the last ten to fifteen years, Malawi has experienced continued food deficits for a number of reasons including recurring natural disasters (droughts and floods) and poor macro-economic factors. A combination of these factors has contributed to declining productivity of the agricultural sector and hence food insecurity at both household and national levels. Prevalence of HIV/AIDS has also exacerbated the decline in agricultural productivity due to its impact on availability of labour and diversion of financial resources to caring for those affected by the pandemic. <br /><br />The objective of the study is to: <br /> Provide an overview of the agricultural sector in general and specifically agricultural input marketing, voucher systems and the policy environment in Malawi.<br />The use of vouchers faces a lot of challenges. Some of these challenges have been documented and verified from various studies which include: <br /> Targeting: Although vouchers were introduced to ensure that only the intended beneficiaries get the inputs, evidence suggests that targeting remains a problem. Sustainability: One common characteristic of all the government input interventions is that no matter what form they take, they are expensive. Monitoring of input use: It is very difficult to monitor how the farmers use the inputs. This in turn proves to be a challenge in assessing impact. Involvement of private sector: In 2005/06, the private sector cried foul because of not being involved with the input vouchers. On the other hand, the government justified its decision by citing among other reasons that some of the private sector players lack capacity.