How best to target agricultural subsidies? The case for an indicator-based targeting system in Malawi

Over the past few years, Malawi made remarkable progress toward increasing its national maize production and achieving food security owing to its Farm Input Subsidy Program (FISP). Likewise, the implementation of the subsidy program is continuously being improved upon as the country learns from past experience. Recent evaluations of the Fertilizer Input Support Programs (FISP) by Dorward and Chirwa (2011, 2012) suggest that various components of the program have been redesigned over time. These include timeliness of fertilizer delivery, fertilizer coupon receipts, regional distribution, area targeting, allocation and distribution processes, and coupon use and redemption. However, the issue of beneficiary identification and targeting remains a continuing challenge for the pro-gram. Drawing on recent research by Houssou and Zeller (2010, 2011, 2012), this brief proposes an alternative approach to effectively target the poor within the group of potential program beneficiaries.