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This book takes forward our understanding of agricultural input subsidies in low income countries.
Malawi has been at the center of the debate on agricultural input subsidies in Africa ever since it significantly expanded its fertilizer subsidy program about two decades ago. When it did so, Malawi was a trailblazer, receiving international attention for seemingly leveraging the subsidy program to move the country from a situation characterized by food deficits and widespread hunger to crop production surpluses. In this paper we trace the history of Malawi’s subsidy program over the past 70 years, describing how the country arrived at that watershed moment earlier this century and how the subsidy program has developed since. We show how donor support for the program has wavered and how external pressure to remove the subsidy has repeatedly been unsuccessful. We also demonstrate how over the years the program’s total fiscal burden has fluctuated significantly. However, we find that since the expansion of the subsidy program in 2004, the fiscal costs of the program have shown little correlation with the maize harvest that same agricultural season. We show that the subsidy program has succeeded in raising awareness about the value of the fertilizer for increased crop productivity. However, despite its continued prominence in the country’s agricultural policy, most Malawian smallholder do not manage to grow sufficient maize to feed their households throughout the year, and every year millions depend on food assistance during the worst months of the lean season.
It is easy enough to calculate how much the Government of Malawi spends on subsidizing chemical fertilizer. Last year, for example, this was MWK 120 billion (about US$ 150 million) taking up over 50% of the agricultural budget. It is much harder, however, to calculate the benefits that these subsidies bring about and how they stack up against the costs. In this policy note, we combine multiple methods and sources of data to narrow down the range of possible benefit estimates, compare it to the cost of subsidies, and propose changes to current policies to make fertilizer subsidies more efficient and affordable.
The good practice guidelines - which form the basis of an interactive policymaker's tool kit included on a CD accompanying the book - relate not only to the more focused problem of encouraging increased fertilizer use by farmers, but also to the broader challenge of creating the type of enabling environment that is needed to support the emergence of efficient, dynamic and commercially viable fertilizer marketing systems."--Jacket.
This open access book discusses the current role of smallholders in connection with food security and poverty reduction in developing countries. It addresses the opportunities they enjoy, and the constraints they face, by analysing the availability, access to and utilization of production factors. Due to the relevance of smallholder farms, enhancing their production capacities and economic and social resilience could produce positive impacts on food security and nutrition at a number of levels. In addition to the role of small farmers as food suppliers, the book considers their role as consumers and their level of nutrition security. It investigates the link between agriculture and nutrition in order to better understand how agriculture affects human health and dietary patterns. Given the importance of smallholdings, strategies to increase their productivity are essential to improving food and nutrition security, as well as food diversity.
The fertilizer industry in Pakistan, with US$3.74 billion per year in sales, now stands at a crossroads where, after an initial substantial contribution in boosting crop productivity, its future potential is being challenged. Fertilizer-responsive crop varieties, supplementary irrigation water, and a favorable policy environment in Pakistan have induced fast growth in fertilizer demand. On the supply side, the availability of gas at low prices along with a favorable investment environment resulted in the buildup of excessive manufacturing capacity. But recently, a shortage of gas and monopolistic behavior has led to underutilization and greater imports. Restrictive laws put fertilizer processing and marketing in a few hands, which has also affected its efficiency. Moreover, the yield response of fertilizer has tapered off and per hectare use is fast reaching its optimal level. The existing policy environment leads to higher costs, inefficient use, and a heavy burden on the government as it charges one-fourth of the market price for feedstock gas used in fertilizer manufacturing. In addition, the government imports urea and absorbs the difference in international and domestic prices.
`This is a "must read" for anyone interested in value chain finance.---Kenneth Shwedel, Agricultural Economist --Book Jacket.
The book offers a rich toolkit of relevant, adoptable ecosystem-based practices that can help the world's 500 million smallholder farm families achieve higher productivity, profitability and resource-use efficiency while enhancing natural capital.
Continued population growth, rapidly changing consumption patterns and the impacts of climate change and environmental degradation are driving limited resources of food, energy, water and materials towards critical thresholds worldwide. These pressures are likely to be substantial across Africa, where countries will have to find innovative ways to boost crop and livestock production to avoid becoming more reliant on imports and food aid. Sustainable agricultural intensification - producing more output from the same area of land while reducing the negative environmental impacts - represents a solution for millions of African farmers. This volume presents the lessons learned from 40 sustainable agricultural intensification programmes in 20 countries across Africa, commissioned as part of the UK Government's Foresight project. Through detailed case studies, the authors of each chapter examine how to develop productive and sustainable agricultural systems and how to scale up these systems to reach many more millions of people in the future. Themes covered include crop improvements, agroforestry and soil conservation, conservation agriculture, integrated pest management, horticulture, livestock and fodder crops, aquaculture, and novel policies and partnerships.
This report assesses the achievements and challenges for microfinance service delivery in Malawi, with particular attention to rural and agricultural markets. It identifies key elements that influence the development of Malawi's financial system, and provides some recommendations and opportunities for investors, donors, government and private sector entities to support the development of an inclusive financial system.