1. Design and implementation
of FISP:
evolution, challenges, and
innovations
Ephraim Chirwa and Andrew Dorward

2. Facts
By 2013/14 season, FISP has been with us for 8
agricultural seasons
Subsidy budget has risen from 6.8% of total budget
in 2006/07 to 10% in 2013/14
The amount of subsidized fertilizers has ranged from
131,000 MT to 216,000 MT, stabilized at 140,000MT
The subsidy on fertilizer has increased from 64% in
2005/06 to 96.8% in 2013/14 of the unsubsidized
price

3. No major changes in the design have occurred
during this period, except
Consideration of farm households in addition to
maize areas in area targeting
Taking out smallholder tobacco, tea and coffee,
cotton seeds and chemicals
Introduction of legumes
Main Design Features and Changes

4. Design & Implementation Features &Changes
Targeting
Resource poor smallholder farmers : 2 bags of fertilizer
50 kg bag 23:21:0+4s ( NPK) – basal fertilizer
50 kg bag urea
Improved maize seeds and legumes
Main Changes over time
More emphasis on targeting vulnerable groups
Intermittent introduction of subsidy on cash crops
Cotton seeds and chemicals in 2007/8
Tea & coffee in 2008/9
No tobacco since 2009/10
More regional equity in subsidy targeting

5. Design & Implementation Features & Changes
Main challenges in targeting
Poor are more likely targeted than the non-poor
(random targeting?)
Non-poor get more on average than the poor
High proportion of repeat beneficiaries – some have
received it 8 times (can some farmers graduate?)

6. Design & Implementation Features & Changes
Coupon Allocation & Distribution
Initially through traditional authorities
Supplementary coupons – less transparent
More recently, farm registers and distribution through
MoAFS and VDCs
Main Changes over time
Use of farm registers and beneficiary verification
Distribution MoAFS
Elimination of supplementary coupons since 2009/10
Open system of coupon allocation and distribution
Public display of beneficiary lists in the communities

7. Design & Implementation Features & Changes
Main challenges in coupon distribution
Enormous undertaking for MoAFS to register farm
households
Variable district performance in accomplishing this
exercise
Provides opportunities for creation of ghost villages
Farm families numbers inconsistent with NSO
national population of rural households
Increased intra-village re-distribution

8. Design & Implementation Features & Changes
 Coupon Redemption
Fertilizer coupons mainly through ADMARC and SFFRFM
Variable participation of private sector in fertilizer voucher
redemption
Private sector participation in seed voucher redemption
Use of Agricultural Development Divisions for cotton inputs
Main Changes over time
Private sector participation in fertilizer redemption in 2006/7 and
2007/8
Private sector participation in seed redemption from 2006/7
Farmer coupon redemption price falling from MK950 2006/7 to
MK500 since 2009/10 (64% to 98% subsidy)
Use of voter IDs for voucher redemption
Use of e-vouchers in seed subsidy in pilot areas in 2013/14
Improved security features of coupons

9. Design & Implementation Features & Changes
Main challenges in coupon redemption
Long distance to markets
Long queues – facilitating ‘tips’ and ‘bribes’
Intermittent supply of subsidized fertilizers in some
markets – frequent stock-outs
Political interference in coupon redemption price
setting
Diversion and fraud

10. Strengths Weaknesses
Operational innovation given
political space
Reaching out to a large
proportion of rural
households
Critical role in household
food security given growing
population
Some diversification &
growth impacts
Positive benefit costs ratios
Private input market
development in seeds
Private sector exclusion in
redemption of fertilizer coupons
Targeting inefficiencies
Unclear productivity effects
Displacements in both seeds
and fertilizer markets
Uncertainty in farm families
Poor timing & stock-outs of
inputs
One fertilizer formulation
package fit-all-soils
Delayed payments to suppliers
Delayed input delivery
SWOT Analysis

11. Opportunities Threats
Efficiency gains – earlier
timing
Coordination with other
programmes – extension,
markets, social protection,
infrastructure, soil fertility
Private sector retail of
subsidized fertilizers
Reduced cost / increased
farmer contribution
Graduation
Fertiliser formulations
E vouchers /id cards
High fertilizer prices
Security of vouchers and fraud
Fiscal budget pressures
 Lack of sustainability
High maize prices
Low farmer redemption prices
Inefficient payment system
Population growth
SWOT Analysis

12. Strategic Areas of Further Innovation
Programme objective
Targeting and coordination
Graduation and sustainable impacts
Other innovations

13. Strategic Innovation ………
Programme objective
Primary objective should focus on achievement of
productivity
“To increase land and labour productivity of smallholder
maize production”
Secondary objectives that maybe achieved consequentially
Food security is implicit in increased maize productivity
Increases productivity also deals with improved incomes
and hence poverty reduction
Improved productivity ensure sustainable outcomes
Farm and non-farm diversification

14. Strategic Innovation ………
Targeting
Targeted households should be resource poor productive
smallholder farmers (poor but not ultra-poor)
Resource poor unproductive farmers (ultra-poor) should be
targeted for social cash transfers
If transfers under SCT are lower than under FISP – cost savings
Other considerations
Ensure minimal displacement effects
Use of objective and multidimensional criteria
Ensure providing platform for stepping-up or stepping-out
Strong coordination with social protection programmes to
avoid multiple dipping
Targeting challenges & costs
National identification system

15. Poverty Targeting: SCT & FISP (50% R HH)
0.0
3.3
8.7 10.4 11.2
14.8 15.3
41.9
37.9
31.2 29.1 28.1
23.7 23.1
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
0.00 4.82 12.74 15.23 16.43 21.69 22.43
MKbillion
% under SCT
SCT: MK2,000/month/hh; FISP: 2 bags of 50 kg -MK29,400
SCT FISP
0.0
4.0
10.5
12.5 13.5
17.8 18.4
41.9
37.9
31.2
29.1 28.1
23.7 23.1
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
0.00 4.82 12.74 15.23 16.43 21.69 22.43
MKbillion
% under SCT
SCT: MK2,400/month/hh; FISP: 2 bags of 50 kg -MK29,400
SCT FISP
0.0
4.9
13.1
15.6 16.9
22.2 23.0
41.9
37.9
31.2
29.1 28.1
23.7 23.1
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
0.00 4.82 12.74 15.23 16.43 21.69 22.43
MKbillion
% under SCT
SCT: MK3,000/month/hh; FISP: 2 bags of 50 kg -MK29,400
SCT FISP
Assumptions
Projected population of rural households 2.8 million
(NSO figures)
Totalpercentage of rural households under SCT and FISIP
is fixed at 50% (half of rural households)
Value of subsidy for 2 bags is MK29,400
SCT Targeting Options
0.0%: None (50% FISP)
4.85%: MH >5 (poor FCS)
12.74%: Labour constrained & food insecure
15.23%: MH >5 (7 days food consumption)
16.43%: MH >5 (poor & borderline FCS)
21.69%: MH >5 (12 months food consumption)
22.43%: Ultra-poor IHS3

16. Strategic Innovation ………
Sustainable Graduation
Design must embrace the concept of sustainable
graduation
Fixed subsidy and flexible farmer voucher redemption
price or increasing farmer contributions
Other considerations
Requires complementary interventions – soil
conservation & fertility, diversification, credit access,
extension services, maize markets
Political commitment to sustainable approaches to
subsidization
Strong internal monitoring and evaluation to determine
achievement of objective and graduation conditions

17. Other innovations
Private sector involvement
Fertiliser formulations
Budget & tender timing & processes
Targeting methods

18. Design and implementation
of FISP:
evolution, challenges, and
innovations
Ephraim Chirwa and Andrew Dorward

19. 0.0
3.3
8.7 10.4 11.2
14.8 15.3
41.9
37.9
31.2 29.1 28.1
23.7 23.1
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
0.00 4.82 12.74 15.23 16.43 21.69 22.43
MKbillion
% under SCT
SCT: MK2,000/month/hh; FISP: 2 bags of 50 kg - MK29,400
SCT FISP
0.0
3.3
8.7 10.4 11.2
14.8 15.3
43.3
39.1
32.3 30.1 29.1
24.5 23.9
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
0.00 4.82 12.74 15.23 16.43 21.69 22.43
MKbillion
% under SCT
SCT: MK2,000/month/hh; FISP: 2 bags of 50 kg - MK30,400
SCT FISP
0.0
3.3
8.7 10.4 11.2
14.8 15.3
49.3 44.5
36.7 34.3 33.1 27.9 27.2
0.0
10.0
20.0
30.0
40.0
50.0
60.0
0.00 4.82 12.74 15.23 16.43 21.69 22.43
MKbillion
% under SCT
SCT: MK2,000/month/hh; FISP: 2 bags of 50 kg - MK34,600
SCT FISP
Assumptions
Projected population of rural households 2.8 million
(NSO figures)
Totalpercentage of rural households under SCT and FISIP
is fixed at 50% (half of rural households)
Fertilizer prices increase but redemption price remains
MK500
SCT Targeting Options
0.0%: None (50% FISP)
4.85%: MH >5 (poor FCS)
12.74%: Labour constrained & food insecure
15.23%: MH >5 (7 days food consumption)
16.43%: MH >5 (poor & borderline FCS)
21.69%: MH >5 (12 months food consumption)
22.43%: Ultra-poor IHS3
Poverty Targeting: SCT & FISP (50% R HH)

20. Multidimensional Poverty (MH)
Dimension Indicator Deprived of … Weight
Education Years of schooling No member with 5 years 1/6
Children school
attendance
Any school age child not in primary school 1/6
Health Child mortality Any child death in the family 1/6
Nutrition Food consumption less than adequate 1/6
Standard of
living
Electricity Household has no electricity 1/18
Sanitation Household’s sanitation facility is not
improved
1/18
Safe drinking water Household does not have access to safe
drinking water
1/18
Floor of house Household has a mud or sand floor 1/18
Cooking fuel Household cooks with wood or charcoal 1/18
Assets Household does not own more than one
asset (radio, TV, telephone, bike,
motorbike, refrigerator, car)
1/18