SOAS Research Online

Abstract

This report reviews the 2009/10 implementation of the Farm Input Subsidy Programme 2009/10 in the context of experience from 2005/6 to 2008/9. The 2009/10 programme differed from previous years in restriction of fertiliser subsidies to maize production, reduced fertiliser distribution budgets which were also adhered to, large increases in maize (particularly hybrid) and legume seed distribution, considerable carry forward of fertiliser stocks from previous year purchases, and earlier sales of fertiliser. These changes all have important positive implications for the programme’s effectiveness and efficiency as a result of reduced displacement, improved targeting, reduced programme costs (which also benefited from lower fertiliser prices), improved returns to use of subsidised fertiliser on hybrid maize, and food security, diversification and soil fertility benefits from the increased legume seed sales. Increased maize and legume seed sales through private retailers should also stimulate input market development. The economic benefit cost ratio for the programme is estimated at 1.12, a respectable result (despite the many difficulties with this analysis and its blindness to many longer term and intangible benefits) with considerable potential for further improvement. The macro-economic costs of the programme have also been substantially reduced as compared with the previous year and the year on year rises in costs halted. These are important achievements. There are two main areas where it is proposed that programme implementation could look for substantial improvements in the future: first in achieving greater transparency in beneficiary identification and coupon issues and second in allowing earlier sales of inputs. Greater transparency in beneficiary identification and coupon issues should build on achievements over the last four years (for example in improved targeting and use of open meetings) by (a) resolving inconsistencies both in changing MoAFS farm family numbers across regions and with NSO estimates, (b) improving effective communication about coupon allocation and distribution systems, (c) increasing the transparency and accountability of these processes with, for example, the involvement of different stakeholders representing farmers, and (d) sharing and implementing good practice in particular districts or areas more widely across the country. Earlier input sales are important for reducing the costs and risks faced by farmers in redeeming coupons, promoting higher yield responses from earlier planting and fertiliser application, reducing pressures and costs in fertiliser deliveries to markets, and giving farmers more voice and choice when redeeming coupons. This requires that the 2009/10 improvements in fertiliser deliveries and in seed contracting are sustained and accompanied by earlier finalising of coupon allocations and printing than in 2009/10 – as has already been recognised by strenuous attempts to achieve earlier commencement of sales in 2010.