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Input voucher study: Malawi and Zambia
26 April 2007
Julius H Mangisoni
University of Malawi

Acknowledgements: The author invites comments on this paper.


Abstract

The input voucher study aims to test the potential benefits of using voucher systems to integrate the commercial and non-commercial agricultural production input distribution channels. Another dimension of the study is to demonstrate the potential impact of implementing a full cycle of policy research, analysis and engagement using the case of seed and fertilizer input vouchers. The studies are underway in Malawi and Zambia. Mozambique will join later1. The first phase of the study focused on reviewing voucher-related literature and updating previous studies done on the subject.

The first phase has revealed that a number of interventions are used in Malawi and Zambia to assist households facing chronic food insecurity to increase their productivity and improve their food security. These include direct input distribution to target households, seed vouchers and fairs, starter packs, and vouchers of different types. The Zambian Government uses the direct input distribution through the Fertilizer Support Program and Program Against Malnutrition's Food Security Pack. NGOs and international organizations in Zambia and Malawi also use direct input distribution. However, there are pockets of seed vouchers and fairs being used by NGOs and donors.

The starter pack scheme and targeted input program were used in Malawi from 1998 to 2004. Currently, the Malawi Government is implementing a combination of direct input distribution and vouchers. The voucher system was first tested in Malawi in 1999 alongside the starter pack program. The results showed that flexi-vouchers are the most economically enhancing tool for smallholder farmers, especially the poorest. Distribution of flex-vouchers allowed households to have freedom in the selection of goods. The Malawi study and other international literature reveal a number of likely outcomes from use of vouchers. First, utilization of local retail outlet goods for distribution instead of distribution of prepackaged inputs increases availability of desired goods such as fertilizer at retail level. Second, direct input distribution such as the starter packs has minimal impact on enhancement of household discretionary cash and maize production. Third, direct input distribution does not allow the private sector to expand its retail distribution networks countrywide into the rural areas, as is apparent in Zambia where the private sector normally operates only in urban and peri-urban areas. Fourth, direct input distribution is costly to government and is susceptible to pilferage and fraud compared to the voucher-based systems.

One way to make the vouchers or coupons more effective is for governments to consider percentile coupons. Such coupons can indicate for example that 75% of the value is for fertilizer, 10% for seed, 5% for chemicals and 10 percent for labor. In this way vouchers can help a government to achieve social objectives through commercial means. Alternatively, efforts should be made to ensure that if the voucher value is less than the cost of the inputs, then farmers should be allowed to redeem the difference for cash or for other necessities. Flexi-vouchers can be redeemed for inputs or for other basic needs from shops.


Footnote:
  1. A separate study of Mozambique's experiences has recently been commissioned by the FANRPAN Secretariat.

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