Institutional Alternatives to Implement Block Farming
The block farms program (BFP), which is conceptualized to exploit scale economies including lower unit cost of input and service delivery, is meant to bring several beneficiaries together onto one large production area and provide them with extension services and credit in the form of mechanization services (via the AMSEC program), certified seed, subsidized fertilizer (via the fertilizer subsidy program) and pesticides. The cost of the mechanization services and inputs (seed, fertilizer, and pesticides) are recovered in-kind at time of harvest, which is used to contribute to the government’s emergency food security via the buffer stock program of NAFCO. In addition to increasing adoption of modern inputs, productivity and incomes of farmers, the BFP aims at targeting the youth and at improving agriculture and farming as a business.
In 2011, an evaluation was carried out of the block farms program and 3 other MoFA programs and this study seeks to follow up on the preliminary assessment with a more thorough analysis of the block farms program. Initial evaluation results show that there is keen interest in the BFP on the part of farmers. Participating farmers attest to the benefits they received including access to low-cost credit in the form of inputs and mechanization services, which have led to greater productivity, production, and incomes on the block farms. However, the recovery rates are very low, making it difficult to infer that farmers will be able to buy and pay for such inputs and services on their own farms—the learning effect anticipated of the program. The evaluation results show that average input use and maize yields are slightly higher on own farms of participating farmers compared to average input use and maize yields on the farms of non-participating farmers, suggesting that there is some learning effect. However, it is not clear whether this is a true learning effect or mere diversion of inputs meant for the block farms to farmers’ own plots outside the block farms.
This activity seeks to develop alternative institutional arrangements for implementing block-farm type of programs that are private sector based to a greater extent -- involving credit institutions, for example – financially sustainable, and effective in facilitating learning. Building on the ministry’s receptiveness to the 4 evaluations and requests for more in-depth work with specific recommendations, the objective of this follow-up activity is to identify potentially superior alternatives -- in terms of transaction costs and effectiveness in spreading technology adoption beyond block farms – and persuade the ministry to pilot the alternatives in selected districts structured as randomized trials so that effectiveness of various institutional arrangements can be rigorously assessed and the ministry can scale up arrangements that are found to be superior.