Evaluation of the 2006/2007 Agricultural Input Subsidy Programme, Malawi

Using a combination of quantitative and qualitative methods, this report evaluates the 2006/7 Malawi Government Agricultural Input Subsidy Programme (AISP). The main objective of the evaluation is to assess the impact and implementation of the AISP in order to provide lessons for future interventions in growth and social protection. <br /><br />The analysis of evidence available identifies that the programme has potential to contribute positively to its stated objectives and to wider government objectives for pro-poor growth. Overall, the findings of the study suggest that there is a considerable potential to improve on the outcomes of the 2006/07 programme. Implementing these improvements will ensure that the programme reaches its full potential not only in terms of better programme outcomes but also in terms of more efficient use of government resources. There are substantial dangers that without explicit action to improve effectiveness and control its costs, the programme could become an unsustainable drain on resources, pulling down rather than promoting growth, food security and poverty reduction. These dangers are illustrated by the results of the benefit/cost analysis and are likely to be exacerbated by recent and projected increases in international fertiliser prices. <br /><br />A number of areas for improvement are highlighted including:<br /> programme objectives - a more comprehensive and consistent framework of objectives is needed to resolve apparent conflicting objectives and to allow appropriate achievement targets and budgetary allocations to be set for long and short term plans&nbsp; agricultural sector and programme information needs - there are fundamental information gaps that prevent proper planning and management of the AISP and of agricultural and rural programmes&nbsp; engagement of the private sector and timely transparent implementation - although the private sector's market share increased over 2005/06, it has the capacity to supply much greater quantities. Allowing the private sector to supply a larger share of the market in the future would enable the government to reduce programme costs as well as enhance the long-term viability of the private sector&nbsp; co-ordination with other policies and programmes - there are strong complementarities between the AISP and other investments that support agricultural and rural development, notably roads and agricultural research, and the greater stability of maize prices. It is important that adequate investments are made in these areas and that AISP costs are controlled and pruned so that it does not starve these other investments of resources. <br />