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Economics of Farm Input Subsidies in Africa

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  • Stein T. Holden

Abstract

Fertilizer and other input subsidies have been prominent components of agricultural policies in many Asian and African countries since the 1960s. Their economic and political rationale is scrutinized with emphasis on the second generation of targeted input subsidy programs that were scaled up in Sub-Saharan Africa after 2005. The extent to which they fulfill the goal of being market smart is assessed after inspecting the potential for such subsidies in Sub-Saharan Africa. The new fertilizer subsidy programs do not live up to the market-smart principles and suffer from severe design and implementation failures. While a clear exit strategy was one of the key principles, this has been neglected, with the result that most current programs are more sticky than smart. They have only partially achieved the intended impacts and have resulted in a number of unintended negative impacts. Subsidy program redesign should start from a pilot stage testing basic mechanisms.

Suggested Citation

  • Stein T. Holden, 2019. "Economics of Farm Input Subsidies in Africa," Annual Review of Resource Economics, Annual Reviews, vol. 11(1), pages 501-522, October.
    • Handle: RePEc:anr:reseco:v:11:y:2019:p:501-522
    DOI: 10.1146/annurev-resource-100518-094002
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    Cited by:

    1. Kimsanova, Barchynai & Herzfeld, Thomas, 2022. "Policy analysis with Melitz-type gravity model: Evidence from Kyrgyzstan," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 80.
    2. Martin Limbikani Mwale & Tony Mwenda Kamninga, 2024. "Unintended consequences of farm input subsidies: women’s contraceptive usage and knock-on effects on children," Journal of Population Research, Springer, vol. 41(3), pages 1-28, September.
    3. MANO, Yukichi & ARIMOTO, Yutaka & Nguyen, Duy Can & Do, Van Hoang & KOJIN, Emi & Nguyen, Thiet & TSUKADA, Kazunari & Vo, Hong Tu, 2023. "Nutrient deficiencies and compositional variability in fertilizers : The case of the Mekong Delta in Vietnam," Discussion paper series HIAS-E-129, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    4. Theriault, Veronique & Smale, Melinda, 2021. "The unintended consequences of the fertilizer subsidy program on crop species diversity in Mali," Food Policy, Elsevier, vol. 102(C).
    5. Gatti, Nicolas & Cecil, Michael & Baylis, Kathy & Estes, Lyndon & Blekking, Jordan & Heckelei, Thomas & Vergopolan, Noemi & Evans, Tom, 2023. "Is closing the agricultural yield gap a “risky” endeavor?," Agricultural Systems, Elsevier, vol. 208(C).
    6. Mwale, Martin Limbikani, 2022. "Unintended consequences of farm input subsidies: women’s contraceptive usage and knock-on effects on children," MPRA Paper 112689, University Library of Munich, Germany.
    7. Nicole M. Mason & Ayala Wineman & Solomon T. Tembo, 2020. "Reducing poverty by ‘ignoring the experts’? Evidence on input subsidies in Zambia," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 12(5), pages 1157-1172, October.
    8. Karl Pauw, 2022. "A review of Ghana’s planting for food and jobs program: implementation, impacts, benefits, and costs," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 14(5), pages 1321-1335, October.
    9. Smale, Melinda & Assima, Amidou & Thériault, Véronique & Kone, Yénizié, 2020. "Effects of the Fertilizer Subsidy Program on Fertilizer Use, Farm Productivity and Crop Sales in Mali," Feed the Future Innovation Lab for Food Security Policy Research Papers 303951, Michigan State University, Department of Agricultural, Food, and Resource Economics, Feed the Future Innovation Lab for Food Security (FSP).
    10. Tebogo B. Seleka, 2022. "Old wine in a new bottle? Impact of the ISPAAD input subsidy program on the subsistence economy in Botswana," Review of Development Economics, Wiley Blackwell, vol. 26(1), pages 298-322, February.
    11. Edward B. Barbier, 2022. "The Policy Implications of the Dasgupta Review: Land Use Change and Biodiversity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 83(4), pages 911-935, December.
    12. Mumah, Edwin & Chen, Yangfen & Hong, Yu & Okello, Dickson, 2024. "Machinery Adoption and Its Effect on Maize Productivity among Smallholder Farmers in Western Kenya: Evidence from the Chisel Harrow Tillage Practice," Research on World Agricultural Economy, Nan Yang Academy of Sciences Pte Ltd (NASS), vol. 5(1), January.
    13. Diekert, Florian & Eymess, Tillmann & Goeschl, Timo & Gómez-Cardona, Santiago & Luomba, Joseph, 2022. "Subsidizing Compliance: A Multi-Unit Price List Mechanism for Legal Fishing Nets at Lake Victoria," Working Papers 0711, University of Heidelberg, Department of Economics.
    14. Winnie Fung & Lenis Saweda O. Liverpool‐Tasie & Nicole M. Mason & Ruth Uwaifo Oyelere, 2020. "Do crop purchase programs improve smallholder welfare? The case of Zambia's Food Reserve Agency," Agricultural Economics, International Association of Agricultural Economists, vol. 51(4), pages 519-533, July.
    15. KOJIN, Emi & DO, Van Hoang & NGUYEN, Thiet & ARIMOTO, Yutaka & VO, Hong Tu & MANO, Yukichi & NGUYEN, Duy Can & TSUKADA, Kazunari, 2023. "Government and market initiatives for the governance of fertilizer quality in Vietnam," Discussion paper series HIAS-E-130, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    16. Fujimoto, Takefumi & Suzuki, Aya, 2021. "Do Fertilizer and Seed Subsidies Strengthen Farmers' Market Participation? the Impact of Tanzania NAIVS on Farmers' Purchase of Agricultural Inputs and Their Maize-Selling Activities," 2021 Conference, August 17-31, 2021, Virtual 315044, International Association of Agricultural Economists.
    17. Bryan, Gharad & Chowdhury, Shyamal & Mobarak, Ahmed Mushfiq & Morten, Melanie & Smits, Joeri, 2021. "Encouragement and Distortionary Effects of Conditional Cash Transfers," IZA Discussion Papers 14326, Institute of Labor Economics (IZA).
    18. Ricome, Aymeric & Barreiro-Hurle, Jesus & Sadibou Fall, Cheickh, 2024. "Government fertilizer subsidies, input use, and income: The case of Senegal," Food Policy, Elsevier, vol. 124(C).
    19. Melinda Smale & Veronique Thériault & Nicole M. Mason, 2020. "Does subsidizing fertilizer contribute to the diet quality of farm women? Evidence from rural Mali," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 12(6), pages 1407-1424, December.
    20. Burke, William J. & Jayne, Thom S. & Snapp, Sieglinde S., 2022. "Nitrogen efficiency by soil quality and management regimes on Malawi farms: Can fertilizer use remain profitable?," World Development, Elsevier, vol. 152(C).
    21. Jongwoo Kim & Nicole M. Mason & David Mather & Felicia Wu, 2021. "The effects of the national agricultural input voucher scheme (NAIVS) on sustainable intensification of maize production in Tanzania," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(3), pages 857-877, September.
    22. Justice A. Tambo & Lenis Saweda O. Liverpool‐Tasie, 2024. "Are farm input subsidies a disincentive for integrated pest management adoption? Evidence from Zambia," Journal of Agricultural Economics, Wiley Blackwell, vol. 75(2), pages 740-763, June.
    23. Koffi Yovo & Ismaïla Ganiyou, 2023. "Impact of Fertilizer Price Subsidy on Agricultural Growth in Togo," Applied Economics and Finance, Redfame publishing, vol. 10(1), pages 2437-2437, February.

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