Vouchers versus Grants: Evidence from Malawi’s Starter Pack Program

The majority of Malawi’s smallholders use low purchased-input technologies and as a result, produce low yields; 40 to 60 percent of rural households face chronic food insecurity for two to five months every year. These households are therefore in need of a program to increase their productivity and improve their food security. Such a program, entitled the “starter pack program,” was initiated in 1998/99 by Malawi’s Ministry of Agriculture in collaboration with donor agencies. The program aimed to distribute “starter packs” to all farming households, containing small packs of hybrid maize seed, fertilizer, and either groundnuts or soybeans. The 1999 starter pack distribution also included a pilot voucher project that distributed two different types of vouchers, in a test to see whether the vouchers received by some of the farmers were more effective than the packs received by other farmers. The purpose of this paper is to evaluate that test. We examine the differences between the three distribution systems of the starter pack, starter pack voucher, and flexi voucher, in order to determine which is the more effective tool for improving food security among Malawian smallholder farmers. We also determine if the impacts depend on particular household characteristics, including gender and marital status of the household head.