Smallholder Risk Management Solutions (SRMS) In Malawi And Ethiopia Replicable Business Model, Malawi: Social Inclusion And Impact Evaluation

Author: Prepared by Oxford Policy Management on behalf of SAIRLA

Year: 2019

Category: Corporate Reports

Abstract

A Replicable Business Model (RBM) using a revolving seed fund and managed by a cooperative was introduced in Phalombe district, southern Malawi to increase the supply of certified seed of improved pigeonpea varieties. After two years of operation, a household survey was conducted in the 2018-19 cropping season to evaluate the RBM in terms of social inclusion and the commercialisation of pigeonpea. The survey compared a treatment group of participants with a control group of non-participants. A poverty scorecard showed that 42% of households participating in the RBM fell below the national poverty line, while 76% fell below the international poverty line of $1.90 per day in 2011 ($1.25 per day in 2005). This compares closely with the corresponding figures for the control group of 46% and 78%, respectively. Significant differences between participants and non-participants were found for some additional poverty indicators not included in the Poverty Scorecard, but these showed no consistent bias towards the treatment group. Propensity Score Matching was used to measure the impact of the RBM on commercialisation. In terms of improved pigeonpea varieties, the RBM increased farmers’ awareness of improved varieties, access to seed, and adoption by 46%. In terms of production, the RBM increased pigeonpea production by 65 kg per household, reflecting both a higher area planted (0.4 acres) and a higher yield (30 kg/acre). In terms of commercialisation, the RBM increased the share of households selling pigeonpea by 24%, the average quantity sold by 16 kg, and the average income from pigeonpea sales by MWK 4,741/household (US$ 5). The RBM also significantly increased the amount of pigeonpea used for home consumption by an average of 49 kg/household. We conclude that, although participants and non-participants differed in some poverty indicators, based on national and international poverty lines the RBM was socially inclusive. The RBM has also had a significant impact on improving access to certified seed and the adoption of improved varieties. However, the impact on commercialisation was modest. One third of the RBM participants did not sell any pigeonpea and two-thirds of pigeonpea production was not sold but kept for home consumption. In the case of staple food crops like pigeonpea, the twin objectives of social inclusion and commercialisation may prove too difficult to combine. On the other hand, by successfully combining social inclusion with higher household food security the RBM has benefitted poorer smallholders.

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