Impact Of Agricultural Market Reforms On Smallholder Farmers In ...

crops is also difficult because tobacco is a historic crop that has developed well established
markets and institutions in Malawi. Expanding new export markets for crops such as paprika will
take more time to achieve.
Agricultural Productivity Investment Project (APIP)
The continuous devaluation of the Malawi currency, rising inflation, and the removal of
agricultural inputs and food subsidies in 1994/95 were viewed as having had adverse impacts on
agricultural production costs, fertilizer use, and food security for the poor. In order to promote
smallholder productivity, halt the declining soil fertility in the country, and promote food security,
the government, through donor assistance from the European Union, adopted the Agricultural
Productivity Investment Project (APIP). A pilot phase was started in 1997/98, where about 15,000
mt of fertilizer were distributed to 150,000 credit-worthy farmers. The credit package (made up of
50 kg of urea, 50 kg of NPK, and 20 kg of hybrid maize), was interest free . Farmers were supposed
to pay back the amount of the loan at the end of July of the year following the receipt of the credit
package. Farmers could repay in cash or in kind. The program was repeated again in 1998/99 and
1999/2000, but only farmers who had not defaulted on their loans during the previous year were
eligible for the continued assistance.
Starter Pack Scheme (SPS)
The SPS is a scheme funded jointly by the Malawi government, the Department for
International Development (DFID), the European Commission (EU), and the World Bank. The SPS
was primarily envisaged as a short term action to help small-scale farmers improve their
agricultural productivity and food security. The scheme was initiated during the 1998/99 season
and about 2.8 million starter packs were distributed to all smallholder farm families country-wide.
The free input packs included fertilizer (about 10 kg of urea or NPK) and seeds (about 2.5 kgs of
maize and legumes) for 0.1 hectare per household. While the Malawi Government was responsible
for the purchase of all the fertilizer in the program, the donors were responsible for the purchase of
all the seeds. The Starter Pack Scheme was repeated during the 1999/2000 season.
General Observations on the Interventions
The SPS and the APIP have been associated with bumper crops amongst the majority of the
smallholder farmers in 1999 and 2000. However, the sustainability of these programs is
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