Agricultural Input Subsidies


Book Description

This book takes forward our understanding of agricultural input subsidies in low income countries.







Fertilizer subsidies in Malawi: From past to present


Book Description

Malawi has been at the center of the debate on agricultural input subsidies in Africa ever since it significantly expanded its fertilizer subsidy program about two decades ago. When it did so, Malawi was a trailblazer, receiving international attention for seemingly leveraging the subsidy program to move the country from a situation characterized by food deficits and widespread hunger to crop production surpluses. In this paper we trace the history of Malawi’s subsidy program over the past 70 years, describing how the country arrived at that watershed moment earlier this century and how the subsidy program has developed since. We show how donor support for the program has wavered and how external pressure to remove the subsidy has repeatedly been unsuccessful. We also demonstrate how over the years the program’s total fiscal burden has fluctuated significantly. However, we find that since the expansion of the subsidy program in 2004, the fiscal costs of the program have shown little correlation with the maize harvest that same agricultural season. We show that the subsidy program has succeeded in raising awareness about the value of the fertilizer for increased crop productivity. However, despite its continued prominence in the country’s agricultural policy, most Malawian smallholder do not manage to grow sufficient maize to feed their households throughout the year, and every year millions depend on food assistance during the worst months of the lean season.




Agricultural Input Subsidies


Book Description

Agricultural input subsidies have been adopted on a large scale across different African countries in the last few years. However global experience with input subsidies has been mixed, and there is considerable concern that current input subsidies will turn out to be expensive political programmes with very limited development benefits. There is, however, also considerable enthusiasm for new, "smart" approaches in subsidies' delivery and for their potential to raise the productivity of millions of poor smallholder farmers and lift them out of poverty while promoting wider food security. This book takes forward our understanding of agricultural input subsidies in low income countries. A review and extension of current thinking on the potential roles of such subsidies provides the basis for a broad examination of recent documented experience in different African countries and then for: a detailed examination of Malawi's current agricultural input subsidy programme, the main focus of the book. This large programme has been the subject a very considerable international debate, much of it unfortunately little informed by the substantial amount of information available on the programme. Drawing on their extensive involvement with the programme over many years and on a wide range of information sources, the authors provide a detailed analysis of the historical, political and agro-economic roots and context of the programme, and its implementation and impacts from 2005 to 2011. Of interest in its own right, this also provides critical insights into the potential benefits and risks with such programmes, and on political and technical issues that are critical in success or failure.







Climate Impacts on Agricultural and Natural Resource Sustainability in Africa


Book Description

This book discusses knowledge-based sustainable agro-ecological and natural resource management systems and best practices for sustained agricultural productivity and ecosystem resilience for better livelihoods under a changing climate. With a focus on agriculture in Africa, the book assesses innovative technologies for use on smallholder farms, and addresses some of the key Sustainable Development Goals to guide innovative responses and enhanced adaptation methods for coping with climate change. Contributions are based on 'Capacity Building for Managing Climate Change in Malawi' (CABMACC), a five-year program with an overall goal to improve livelihoods and food security through innovative responses and enhanced capacity of adaptation to climate change. Readers will discover more about sustainable crop production, climate smart agriculture, on-farm energy supply from biogas and the potential of soil carbon sequestration in crop-livestock systems.




Measuring the Impacts of Malawi's Farm Input Subsidy Program


Book Description

We measure the impacts of Malawi's 2009 Farm Input Subsidy Program (FISP) on fertilizer use and maize yields in central and southern Malawi. Using three rounds of panel data and instrumental variables regression strategies to control for endogenous selection into the subsidy program we find positive and statistically significant correlations between participation in the FISP and fertilizer use intensity. Fertilizer use is found to be higher among households that plant improved maize varieties than among those that plant traditional varieties. Results are broadly robust to the inclusion of previous fertilizer intensity to control for household-specific differences in fertilizer use. We combine these results with those from a maize production function to calculate program-generated changes in average maize availability, accounting for estimated subsidy-induced changes in crop area. Our findings have implications for the way input subsidy programs are designed and implemented.




Agricultural Subsidies and Child Labour


Book Description

In response to the perennial low harvest and high food prices, a number of Sub-Saharan African countries have instituted agricultural input subsidy programmes to increase food production and reduce poverty among small-scale farmers. Given that agriculture employs a large portion of working children on the continent, this paper studies the effect of these subsidy programmes on child labour. The paper analyses three rounds of the Malawi Integrated Household Panel Survey to answer the research question. The econometric results show that the farm input subsidy program in Malawi has a significant and positive impact on child labour in the country. The results suggest that in spite of the success of the programme in achieving its core aims, there are unintended negative consequences that could negatively affect human capital development. This could in turn adversely affect the ultimate poverty eradication efforts in the country and in the sub-region. To mitigate this problem, governments and implementing agencies should consider conditioning the distribution of the inputs on positive outcome like the school performance of the wards of beneficiaries.




Going the Extra Mile


Book Description

Many countries subsidize agricultural inputs but require farmers to travel to retailers to access inputs, just as for normal purchases. What effect do travel costs have on subsidy take-up and input usage, particularly for remote farmers? We analyze Malawi's Farm Input Subsidy Program (FISP), and show that travel-cost-adjusted prices are substantially higher in remote areas. However, subsidy redemption is nearly universal. We make use of a policy change in 2017-19 which took centralized control of beneficiary selection and find that FISP eliminates the sizeable remoteness gradient that exists for non-beneficiaries. Our results demonstrate that subsidy programs may narrow spatial inequities.