Interim evaluation
The project was to be situated within the Kasungu Agricultural Development
Division (KADD). It would be part of the National Rural Development Programme
(NRDP) and comprise the Kasungu, Mchinji and Dowa East Rural Development
Projects. KADD covers 14% (13000km2) of the country and contains 11% (700000)
of Malawi's total rural population. The average household is about five.
Most of the project area falls under customary or communal land tenure
where only cultivation rights, rather than legal ownership, is granted
by the village headman. Within most of the project area matrilineal inheritantship
of cultivation rights prevail.
Kasungu RDP has a total area of about 550400ha, which includes a large
state sector and the Kasungu Flue-Cured Tobacco Authority (KFCTA). Of
the 416000ha of potentially cultivable land, 273000 ha supported (in 1984/85)
a smallholder farming sub-sector of 63600farm families distributed over
six EPAs. Farm holdings are slightly higher than the national average.
Soils are reasonably fertile and there is much potential for further agricultural
development through increasing the yield level of existing crops (maize,
groundnuts, tobacco, beans) and for broadening the range of crops grown
(oil seeds). Maize production occupies 70% of the cultivated area followed
by groundnuts (12%) and tobacco (3%). Livestock is important although
remaining comparatively underdeveloped. Mchinji RDP has a total area of
about 334600ha, of which about 151000ha was available to a smallholder
population of 49700 farm families. Farms are small and at least 70% of
the holdings are less than 2ha. Maize occupies 69% of the land while groundnuts
occupy 16% and tobacco 3%. Livestock is more numerous than in Kasungu
but remained relatively underdeveloped. Dowa East is the smallest of the
three RDPs with 136600ha, of which 79900ha was farmed in 1984/85 by 25200
smallholder families. Farms are small and at least 70% of the holdings
are less than 2ha. Maize cultivation takes up about 80% of the farm land,
groundnuts 5% and tobacco 4%, the remainder being taken up by root crops,
pulses, wheat and cotton. There is also a significant, mainly small stock,
livestock population.
Project objectives and design
Target group
The primary target group consists of smallholder members of farm clubs.
Government policy decrees that all seasonal crop production credit (which
is the central component of the project) be channeled through these clubs
and similar farm groups. At appraisal it was estimated that there were
about 600farm clubs in the three RDPs with around 19200 members. The secondary
target group consists of smallholders, whether club members or not, to
whom the benefits of improved extension services, veterinary facilities,
roads, water supply and farmer training can be extended through the respective
project components. The average household income at appraisal was estimated
at about MK180 (USD135), some 60% of which is derived from food and cash
crop production, 7% from livestock and the rest from other sources. Less
than 30% of the population has improved water supply from covered wells
or boreholes. The rest relies on open wells or streams.
Objectives and components
The project objectives were to focus on rural development in Kasungu,
Mchinji and Dowa East RDPs with particular reference to: (a)increase the
self-reliance of the rural poor in food production; (b)promote production-oriented
investments and essential infrastructure; (c)strengthen the institutional
development of the Kasungu ADD; and (d)minimize the burden of recurrent
costs.
Components. The project was to be carried out over a five-year period
and comprises the following components: (a)extension; (b)credit, a substantial
seasonal credit fund would be earmarked for the purchase of seasonal inputs
(fertilizers, seeds, insecticides). Medium-term credit was to be provided
for the purchase of farm carts, work oxen, ploughs and other farm implements;
(c)a pilot nutrition programme to assess the extent of malnutrition and
organize farmer-training courses; (d)training; (e)land husbandry to reduce
erosion particularly on hillsides and over-grazed areas of Dowa East and
Kasungu RDPs; (f)livestock production, livestock enterprises were to be
supported as part of mixed farming systems on smallholdings. Credit and
specialist technical support was to be given for improving pastures and
use of crops by-products; (g)marketing support to deal with input and
output supply, the locations of market sheds were to be selected on basis
of crop volumes produced and distances from farming villages; (h)roads;
(i)water supply; and (j)management support.
The project was managed solely by national staff. Although the management
performance has been satisfactory; nevertheless it has been negatively
affected by a weak management of information throughout the life of the
project.
Expected effects
and assumptions
The main objectives of the project are to improve the productive capacity
and the socio-economic welfare of the smallholder farmers in the area.
More intensive crop extension efforts, improved veterinary services, along
with credit facilities and better social services, are expected to expand
the productive capacity and generate economic benefits. The benefits from
increased crop and livestock production are quantifiable.
The basic assumptions of the project design were: (a)that area-specific
extension messages would be made available to the producers; (b)the markets
would be developed early in the life of the project through farm-to-market
roads construction and improvement to ensure timely and cost-effective
distribution of inputs and efficient transportation of produce; and (c)the
Government would introduce a pricing approach that would take into consideration
farmers' produce margins.
Evaluation
The Interim Evaluation Mission which consisted of six experts in the
fields of economics, sociology, agronomy, farming systems, nutrition and
monitoring and evaluation visited Malawi during August/September 1991.
The mission spent about 20days in the field as well as around one week
visiting with government officials. The mission had access to various
project reports and benefited from a number of field surveys and studies
undertaken by the M&E. The mission also met and discussed with government
and project authorities as well as with donors.
Implementation context
Malawi is a landlocked country, a fact which has important implications
for the supply of farm inputs and the marketing of the export crops. To
increase the effectiveness of extension services, the GOM restructured
its extension services on a geographic unit approach, based on ecological
principles consistent with administrative boundaries. The 180 Extension
Planning Areas (EPAs) will be grouped into 40 Development Areas. The project
would provide assistance to agricultural extension through the EPAs under
the KADD administration.
The project would be implemented within the context of the National
Rural Development Programme (NRDP), designed to provide a more extensive
level of services to a larger population. NRDP would increase smallholder
production through the provision of input and farm services. NRDP is financed
by a host of bilateral and multilateral donors.
Project achievements
Research. During the course of the project an adaptive research team
has been established. This was intended to complement the work of the
commodity teams at the main research stations. Details of a few of the
experiments which had been carried out were available. The quality of
presentation and analysis of the data is variable, but unfortunately none
of the work of the past seven years has provided extension staff with
any new technical information which would assist farmers in overcoming
their constraints. This activity is part of the national research programme
and modifications which might make it more effective will have to come
from the national level.
Extension. The extension service was expected to continue to work
with the modified Training and Visit (T&V) system which forms the
basis of the national programme. Most attenders of meetings are members
of credit clubs so that the system is not fulfilling its objective of
reaching out to the poorer members of the community. Part of the reason
for this is that a good deal of the instructions relates to crops (hybrid
maize, tobacco) which are not grown by the poorer families, and to practices
(the use of fertilizer and manure) which are beyond their resources. There
are considerable weaknesses in the content of the messages being passed
on to farmers. It is only in the case of hybrid maize that the farm household/baseline
survey data indicates that yields of fertilizer users are 37% higher compared
to non-users, i.e., 1600 versus 1170 kg/ha.
The land husbandry component was expected to strengthen KADD's capacity
to assist farmers with the control of soil erosion. The land husbandry
technical assistants were to be supported by 20field assistants trained
in the use of hand levels. They were to help with the re-alignment of
ridges along the contour.
The land husbandry section of KADD claims that between 1985 and 1991,
398.6km were pegged and 70.7km of marker ridges were constructed. Assuming
0.5km of marker ridge per ha this means that approximately 800ha were
pegged and ridges were actually re-aligned on some 140ha. Two facts stand
out from these figures. The first is that the area covered in five years
is such a small fraction of the cultivated land in need of contour ridging
that a continuation of this strategy would require several generations
to cover the whole project area. The second is that on a high proportion
of the fields that are pegged out by the staff the farmers do not re-align
their ridges so the staff's efforts are wasted.
Among the reasons for the low level of actual ridge re-alignment
following on the pegging of marker ridges is a policy of focussing attention
on catchments which are particularly prone to erosion. A whole area is
pegged irrespective of whether farmers have requested such action on their
fields. Apart from the marker ridge strategy the land husbandry division
has tried small experiments with Leucaena bushes on farmers fields. These
were intended both to raise soil fertility and provide a live barrier
to protect the soil. The plants have not grown well (a combination of
acid soil conditions and termite attack) and the strategy has been abandoned.
Credit. Recovery rates on both seasonal and medium term loans have
fallen during the life of the project. On the basis of a recent KADD Credit
Default Study, undertaken as a result of IFAD's 1989-MTE of the project,
and from discussions in the field, it appears that a number of factors
have contributed to the increase in arrears experienced since 1987/88.
These include: (a) poor club appraisal, management, supervision and training,
(b) willful defaulting, (c) embezzlement of funds by club officials, (d)
misuse of inputs by Field Assistants and Credit and Marketing Officers
and (e) illegal tobacco growing and/or the diversion of inputs into estates.
As a result of these findings a number of measures have been taken to
improve credit recovery. These include tightening up loan administrative
procedures, training club members and project officers and devising a
systematic means to reschedule loans to recover past arrears.
Input Supply and Marketing. All of the marketing facilities have
been constructed and are in use. The centres are staffed and the Agricultural
Development and Marketing Cooperation (ADMARC) is financing the operation
and maintenance costs. Fertilizer and seeds are supplied by
ADMARC on the basis of demand forecasts made by KADD and ADMARC for credit
and cash sales. There has been a shift away from cash to credit sales.
Farmers have often complained that fertilizers and other inputs have been
inadequate in terms of total amounts, sizes of packages and timeliness
of delivery, especially in areas where sheds have been closed to reduce
costs.
Effects, assessment
and sustainability
Beneficiaries and Income Effects. In the absence of a baseline study
of beneficiaries targeted by the community development component, one
can speak of impact only in general terms. Unless hybrid maize yields
can be increased significantly, for example through a better application
of fertilizer, it seems preferable for the smallholder to grow local maize
as returns are higher compared to all but one of the hybrid maize alternatives.
The exception is the high yield alternative (optimistic scenario) with
a gross margin of MK447 per ha and a return to labour of MK2.85per day.
The gross margin for the local maize alternative (given a yield of 900kg/ha
based on KADD observations over a number of years) are MK211 per ha and
MK1.23 per labour. In contrast with the above figures are the results
for burley tobacco: a gross margin of MK2149 and returns to labour of
MK13.78. These findings assume a price of MK4 per kg which the Government
agreed to be paid by ADMARC to smallholders in the 1990/91 season. If
farmers could sell directly to the auction floor at MK7 per kg, labour
returns would peak at MK21.63 per day. From the above it is obvious that
burley tobacco is by far the most profitable alternative.
Effects on Nutrition and Food Security. In general, 79% of all households
run out of local maize by December. The households that run out of maize
the earliest tend to be non-credit club members, non-hybrid maize growers,
female-headed, non-fertilizer users, and households with less than one
hectare. To compensate for maize shortages, households in the project
area pursue a number of strategies to meet their consumption needs. These
include crop diversification, Ganyu labour (i.e., casual labour), estate
work, handicraft and livestock sale. The nutritional impact of the project
is difficult to measure. Since the IFAD project was originally designed
to target farmers in credit clubs, many of the food insecure households
have remained outside the reach of project activities.
Over 70% of the male children and 55% of the female children in the
project area are nutritionally stunted. To compensate for this, the KADD
staff have put together a plan for reaching the poorer households in the
Division. Building upon the information generated by various surveys,
a strategy has been developed to identify the food-insecure households.
Households are to be selected by local committees consisting of village
headmen, field assistants, and family heads using a checklist of characteristics.
The households selected will be organized into groups for targeted interventions.
The evaluation team feels that this is a good start.
Specific Effects on Women. In general the women programme is fairly
uniform across all RDPs. It consists of forming women's groups, attempting
to target them with credit, activities related to crop improvement and
home economics, introducing Income Generating Activities (IGAs), and training
programmes. The number of women's credit groups has fluctuated during
the life of the project, but with the exception of Mchinji it has not
increased. There is no obvious factor, excepting the increase in arrears
in general among all clubs. Conventional wisdom insists that women clubs
are better at repaying their credit than men. However, the Smallholder
Agricultural and Credit Administration (SACA) notes that there is no evidence
to support this assertion and project data have not been desegregated
to test the hypothesis.
Environmental Effects. The project did not provide any alternative
to continuous cultivation. It did increase the supply of fertilizer to
the area. Under existing circumstances this led to the growth of stronger
plants which contributed to an increase in organic matter in the soil
(particularly through the increased root growth). It would not have counteracted
the decline in soil pH and only marginally reduced soil loss. The land
husbandry initiatives would have reduced soil loss but only on a tiny
fraction of the area. The increase in tobacco production stimulated under
the project would have increased the demand for fuelwood. The project
had no major component for counteracting this trend.
Effects on Local/National Development Trends. The rehabilitation
of roads and the improvement in marketing infrastructures have had a positive
impact on the economy of three RDPs. Attempts at diversification of crop
production should improve the local economy and assist the national policy
aiming at the development of the rural areas.
Credit. By 1991, credit targeted only 25% of all farm households
in the project area. Credit still reaches only a small percentage of farmers
in each RDP. Farmers visited generally indicated that their income had
increased as a result of having received credit under the project. There
are doubts, however, that the credit component reaches the poorer farmers.
The administrative costs of the small loans served are likely to be high.
In the absence of a baseline study of beneficiaries targeted by the
community development component, one can speak of impact only in general
terms. Given the National Credit Committee's refusal to raise interest
rates, the long-term costs of such lending, its effect on the viability
of the revolving fund, and the likelihood of its ability to improve the
well-being of smallholder farmers must be carefully considered. Finally,
considering the rather poor performance record of farmers clubs in recovering
credit, one must naturally ask if one extends credit to more marginal
farmers than those previously targeted by the project, would clubs be
even less well disciplined, inducing even higher arrears than in the past.
This raises the more general issue of whether targeting smallholders through
clubs with credit is the most effective and efficient way to reach Malawi's
poorest smallholders.
Monitoring and Evaluation (M&E). The quality and usefulness of
the M&E system has been mixed. On the one hand the M&E unit produced
useful studies and survey results, in particular the Credit Default Study,
the Household Food Security Surveys and recently the Farm Household/Baseline
Survey. On the other hand, however, the data management and reporting
system has been experiencing several problems. Data from the RDPs suffer
from a lack of comparability, standard formats are lacking and reports/data
are difficult to retrieve. Progress reports are often submitted too late
to be meaningful. They provide a lot of details but essential data are
missing. A system of beneficiary contact monitoring (including for example
a tracer study of credit recipients) has never been established. Part
of these problems can be explained from the high staff turnover during
the first years of the project and from the limited M&E staff available.
However, more staff will not solve the problems unless the skills of the
staff are upgraded through training and technical assistance (with on-the-job
training).
Sustainability. The project as designed was complex with about thirteen
components. Hence its implementation was the responsibility of many agencies.
Though its integration within the structure of the existing institutions
would supposedly ensure its future sustainability, a critical factor in
this respect would be the GOM price and marketing policies both at the
economy level and cropwise. Unless the flow of inputs, particularly fertilizer
and seeds and the input/product price ratio remained favourable to smallholders,
they would more likely revert to subsistence production. In this respect
the development of markets, through investment in infrastructure and equal
opportunities to all producers, are requisites for sustainability of project
benefits.
Sustainability of credit operations would depend on the farm clubs.
The evaluation revealed an inefficient performance in terms of deliveries
to the intended beneficiaries, the low recovery rates, the non-responsible
conduct of the office bearers and the consequent lack of sense of ownership
among the members. In such situations, the sustainability of credit, input
supply and other project services would be in jeopardy.
Main issues and recommendations
Macro-economic policies effects on farm sector, in particular, permission
for smallholders to grow export crops such as tobacco, the marketing arrangements
and the pricing system have a profound effect on the small sector development
and commercialization. In any future projects, the impact of these macro-economic
policies on project performance should be carefully analyzed during the
design stage. Alternative scenarios should be drawn and examined and discussed
with the concerned government.
To create a rural financial system to reach the target group, a number
of measures should be pursued:
(a) the system should respond to beneficiaries demands which means that
some need assessments/diagnostic surveys are essential;
(b) a target group oriented delivery mechanism should be established.
Since the farm clubs are not effective in reaching the most vulnerable
segment of the rural poor, credit groups in which these poor participate
should be formed; and
(c) loans repayments are low and farm clubs, particularly office bearers,
have high delinquency rates. To improve repayments, there is an urgency
to train and develop groups (training, savings mobilization, collective
action) to a high level of commitment for peers pressure to become effective
in repayments.
For effective extension, the requisites are:
(a) a clear extension message which is responsive to individual farmer
needs and constraints;
(b) improving contacts with low resource farming households, since contacts
are maintained with about 40% of better-off households;
(c) need for training of extension staff and providing them with appropriate
technical messages; and
(d) availability of attractive input/product price ratio through allowing
smallholders to grow burley tobacco on customary lands, improved delivery
mechanism, marketing and pricing.
For household food security, rural households apply a number of survival
strategies and policies and projects should be designed to augment the
returns from their alternative activities.
Lessons learned
The effects which macro-economic policies are likely to have on project
sub-components should be thoroughly investigated. The Malawi's land tenure,
marketing and price policies as well as its general support to the estate
sector have adversely affected smallholder crop production.
The need for a more dynamic, competitive and promotion-oriented marketing
system and a farmer-centered approach to development.
A sustainable rural financial system which starts with savings mobilization,
is demand led, and seeks to promote and develop a viable rural banking
system. The recent Credit Default Study indicates that once credit became
supply led farmers clubs expanded too rapidly and lost their cohesion.
The lesson learned is that group credit through clubs may have its limits
and alternative avenues and institutions through which to target farmers
with credit should be investigated in the future. Major project components,
such as credit, should not be implemented without a tracer study of those
targeted.
The active participation of the beneficiaries in the design and implementation
of the project is essential. There is much more scope for encouraging
active participation of beneficiaries in all project activities.
