Cost benefit analysis of alternative agriculture and social protection policy options in Malawi Cost Benefit Analysis of alternative Agriculture and Social Protection Policy Interventions in Malawi 1. Background The Government of Malawi (GoM) is implementing the Malawi National Social Support Programme (MNSSP) that aims to strengthen coherence and coordination between social support instruments aimed at: I. Reaching the poorest families with welfare interventions; II. Protecting and building productive assets of the ultra-poor families to help build their resilience in the event of shocks; and III. Supporting moderately poor and vulnerable households to enhance their income-generation capacities; and IV. Ensuring linkages amongst interventions. The MNSSP includes five programmes implemented by different sectoral ministries with policy oversight and guidance provided by the Ministry of Finance, Economic Planning and Development (MoFEPD): I. Social Cash Transfer Programme (SCTP); II. Local Development Fund Public Works Programme (LDF PWP); III. Village Savings and Loans scheme (VSL); IV. School Feeding programme (SF), and V. Financial micro-institutions. The Social Cash Transfer (SCT) Programme in Malawi is an unconditional transfer targeted at ultra-poor and labour-constrained households managed by the Ministry of Gender, Children, Disability and Social Welfare (MoGCDSW). As of August 2015, the program reached 18 districts with approximately 160,000 households and 706,000 individuals. The main objectives of the SCT are to reduce poverty and hunger and to increase school enrolment. Transfer amounts vary by household size and number of children enrolled in school. The basic allowance transfer varies between MK 1,700 and MK 3,700 per month, depending on the size of the households with a bonus of MK 500 per month for each child enrolled in primary school, and MK 1000 for each child in secondary school. The Local Development Fund Public Works Programme (LDF PWP) is a conditional cash transfer targeted at ultra-poor and operated by district councils, which are under the Ministry of Local Government and Rural Development (MoLGRD). The programme is expected to cover the whole country and aims at reaching up to 570,000 households in 2015/16 and 240,000 households in subsequent years for 3 years (same beneficiaries). Transfer amounts per beneficiary is MKW 5,820 per cycle, with four cycles per year, around MKW23, 280 per year. The main objective of the PWP is to increase incomes and food security of poor households and create productive community assets. The Village Savings and Loans Programme scheme (VSL) is aimed at reducing household vulnerability to shocks and increasing income generation capacity through investments and is supported by NGOs. The groups are self-formed and the schemes are based on member contribution of cash, which is used as a deposit for future short-term loans provided to members. The level of contribution and interest rates charged for loans vary across groups, since each group is free to set its own operating guidelines. The VSL schemes are growing in their popularity partly as they fill an important gap in formal financial institutions that are rarely available in rural contexts (Government of Malawi, 2012): In 2012, for example, the COMSIP groups mobilized MK434.6 million (US$1.3 million) in savings (World Bank, 2013). In the 2005/06 season the Government of Malawi introduced the Farm Input Subsidy programme (FISP) against the background of bad weather impacting on production, prolonged food shortage and high input prices in absence of soft farm input loans for smallholder farmers. The primary purpose of the programme was to increase resource poor smallholder farmers’ access to improved agricultural farm inputs in order to achieve food self-sufficiency and to increase resource poor small holder farmer’s income through increased food and cash crop production. The programme is nationwide and covers around 50% of smallholder farmers (1.5 million households). Transfers amount to two vouchers a