Can Agricultural Input Subsidy Help The Poor More Than Food Aid Supplies In Malawi?

Abstract

The study compared the pro-poorness of food aid and fertilizer input subsidy in Malawi. As a land-locked country food imports in Malawi are very expensive. The fertiliser subsidy enables farmers to grow more of their own food rather than rely on imported handouts in an increasingly volatile global market. The study relied on food aid and fertilizer subsidy data from Malawi Integrated Household Survey (IHS) of 2005. The survey was drawn using a two-stage stratified sampling procedure based on population census. The population covered by the survey was all individuals living in selected households. The sample frame includes all three regions of Malawi: North, Centre and South. The survey stratified the country into rural and urban strata. The total sample was 11,280 households. We analysed the data using Distributive Analysis Stata Package (DASP) procedure as indicated in Araar and Duclos (2009). In doing this, we compared the Lorenz curve of per capita consumption expenditure with concentration curve of participation in food aid distribution or fertilizer subsidy in the household. The result from the analysis reveals that food aid is not allocated based on food need in Malawi. For example, the proportions of under-weighed in Centre and Northern regions were about 40% and 28% respectively, and each of the region was allocated about 32% of free food aid. It also shows that the distribution of food-for-work is more pro-poor than that of free food aid, while fertilizer subsidy distribution is more pro-poor than any of the food aid. However, none of the three programmes is well-targeted at poor households and the differences among the three programmes are trivial. This is beacause the share of the poorest household in the fertilizer subsidy, free food and food for work aid were only 19.8%, 19.7% and 20% respectively. This implies that more has to be done to improve targeting of fertilizer subsidy and food aid distribution to reach the intended beneficiaries which are poorest housholds in Malawi. The starting point is to ensure that the most food insecured region(s) and rural areas are well targeted in the distribution of food aid and fertilizer subsidy.