Malawi, where agriculture forms the backbone of the economy—contributing nearly a quarter of its GDP and employing three-quarters of the population—is embarking on a significant agricultural reform. Facing recurrent shocks and poverty that threaten to push over a quarter of Malawians into crisis-level food insecurity by early 2025, the country is shifting its resources to more cost-efficient and impactful programs, moving from a vicious cycle of unsustainable subsidies to a virtuous one of targeted productivity. The World Bank supports this systemic transformation.
The previous, centrally managed input support program, which provided crucial yet heavily subsidised inputs like fertilizer, proved to be a severe fiscal burden, consuming approximately 75 percent of the Ministry of Agriculture’s budget around 2015. Despite massive expenditure, the initiative was plagued by delays, cost overruns, and failed to achieve its primary objective of boosting food security, instead driving an unsustainable reliance on maize that led to micronutrient deficiencies and environmental degradation. The former approach failed to reach the most productive farmers, limiting overall food supply improvement.
In response, the Ministry of Agriculture, Irrigation and Water Development has undertaken a major reform of the Affordable Input Subsidy Program (AIP), initiated in 2020. The redesigned program focuses on reducing the overall size of the subsidy and targeting those farms with the greatest potential for productive input use. An online platform tracking and managing farming data across Malawi has been instrumental in this improved targeting, enabling the government to focus the AIP primarily on roughly one million of the country’s most productive farmers. To mitigate the impact on the poorest, non-productive households, beneficiaries with the lowest incomes have been transitioned to cash transfer and public works programs. The system is also strategically shifting procurement and distribution towards private sector-led channels.
Further strengthening the sector, the government is working to scale up digital infrastructure, research, and irrigation under the regional Food System Resilience Program. A US$20 million grant from the FoodSystems 2030 Trust Fund is fueling a critical pilot project to refine the AIP’s design and enhance its impact on soil health and livelihoods. This pilot introduces a new e-voucher system, built on a digital farmer registry, that tests data-driven subsidy allocation across twelve districts. This system incorporates expanded subsidies for diverse inputs like legume seeds, lime, and organo-mineral fertilizers, and mandates that farmers adopt at least one conservation measure, bundling input access with extension services and soil and water conservation practices.
Early results from the soil health pilot are promising, having supported over 23,000 farmers, 43% of whom are women, with improved practices. These farmers and over 100 agricultural extension workers received training in soil health management. Maize yields have increased, demonstrating the effectiveness of tailored fertilizer recommendations based on 1,500 collected soil samples. Minister of Agriculture, Hon. Samuel Kawale, emphasised the reform’s milestone, stating, “What we are now doing is to reform the subsidy program, but more money has gone toward commercial farming where a lot of Malawians are very happy to find themselves, away from the subsidies to the commercial farming.” As Malawi enters the next phase of reforms, it plans to repurpose its annual US$300 million input program based on the pilot’s findings, doubling down on training for farmers and agro-dealers, and ensuring the new flexible e-vouchers reach their intended recipients. The ultimate goal, according to Minister Kawale, is clear: to end hunger, increase household income, and boost exports for future generations.
