/Soaring-Food-Price-TC-Jan11

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Policy or programmatic measure

Expected effects

Conditions for recommendation

Caution

- Immediate support to production in family gardens and irrigated areas (3.4.2)

- rapid production of short cycle crops including vegetables in peri-urban areas and on irrigated land - supply of certain food items will be improved on some markets - prices of certain food items could be reduced on some markets - if targeting is effective, this could contribute to improving welfare of poor small farmers

- where input markets are working reasonably well and inputs are available, the voucher system is recommended - where input markets are not working seek to make contracts with existing private dealers for distributing input packs or make arrangements with NGOs, projects and government services - inputs must be available

- some risk of rent seeking - risk that this subsidized programme becomes a regular activity difficult to interrupt in the future. Need to agree at start with key stakeholders on an exit strategy - marketing arrangements should be planned in advance - too much attention to targeting can increase the time needed to put programme in place

- Input vouchers (seeds, fertilizer and tools) for vulnerable farmers (3.4.2)

- vulnerable farmers can decide which inputs of seeds, fertilizer and tools they want to get - it is cheaper to distribute input vouchers than to distribute food to the vulnerable - can improve the welfare of the poor

- requires a reliable and well functioning network of input dealers - need for an appropriate system to verify input quality, particularly seeds

- risk that vouchers become like a parallel currency - marketing arrangements should be planned in advance - not recommended in areas where there is high likeliness of drought or flood, as risks are too high, thereby reducing the advantage of this approach

- Pilot fertilizer and seed input credit schemes for smallscale farmers for the next cropping season (3.4.2)

- benefits to small farmers are potentially large - availability of certain food items will be improved in households of the pilot areas and in nearby markets - with good targeting, this can contribute to improve welfare of small farmers

- benefits well shared among stakeholders - initial revolving fund must maintain 100 percent of its initial purchasing power for the scheme to be sustainable - this integrated approach requires a safe and well enforced regulatory framework for contracts

- prices of certain food items are likely to be reduced particularly in less accessible areas - marketing arrangements should be planned in advance

- Input trade fairs (3.4.2)

- vulnerable farmer are able to chose the inputs (i.e. seeds, fertilizer and tools) that they need - can strengthen the local seed system

- requires good organization capacity - offers the opportunity for seed quality control - ITFs should be organized just prior to planting season

- it may be difficult to reach large numbers of farmers

- Direct Seed Distribution (3.4.2)

- beneficiary farmers have access to inputs that allow them to produce food

- procurement should be done well in advance of the production season - good source of quality seed - ability to deliver it to the vulnerable farmers - quality verification system for the seed

- this approach often does not build the local seed system - marketing arrangements should be planned in advance

- Measures to ensure availability of fertilizer (3.4.2)

- allocation of government budget resources for a credit line for private sector - organization of national or subregional bulk procurement - creation of a risk-sharing fund to facilitate the issuance of letters of credit - fertilizer available on time in appropriate quantities and quality

- platform for constructive dialogue among public and private sector fertilizer stakeholders

Production support measures

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