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Fertilizer subsidies and private market participation: the case of Kano State, Nigeria

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  • Lenis Saweda O. Liverpool-Tasie

Abstract

This article estimates the effect of a fertilizer voucher program on farmer participation in the private fertilizer market in Nigeria. Using a double-hurdle model (to address corner solution challenges with estimating input demand) and a control function approach (to account for the endogeneity of subsidized fertilizer acquired), the study finds evidence that receiving subsidized fertilizer in Kano, Nigeria increased both the probability and extent of participation in the private fertilizer market. Findings demonstrate that under certain circumstances, e.g., where input dealers’ links to farmer are weak; there could be significant gains from the temporary use of voucher programs to strengthen such links.

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  • Lenis Saweda O. Liverpool-Tasie, 2014. "Fertilizer subsidies and private market participation: the case of Kano State, Nigeria," Agricultural Economics, International Association of Agricultural Economists, vol. 45(6), pages 663-678, November.
    • Handle: RePEc:bla:agecon:v:45:y:2014:i:6:p:663-678
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    1. David L. Mather & Thomas S. Jayne, 2018. "Fertilizer subsidies and the role of targeting in crowding out: evidence from Kenya," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 10(2), pages 397-417, April.
    2. Sibande, Lonester & Bailey, Alastair & Davidova, Sophia, 2017. "The impact of farm input subsidies on maize marketing in Malawi," Food Policy, Elsevier, vol. 69(C), pages 190-206.
    3. Paudel, Jayash & Crago, Christine L., 2017. "Fertilizer Subsidy and Agricultural Productivity: Empirical Evidence from Nepal," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258464, Agricultural and Applied Economics Association.
    4. Jayne, Thomas S. & Mason, Nicole M. & Burke, William J. & Ariga, Joshua, 2018. "Review: Taking stock of Africa’s second-generation agricultural input subsidy programs," Food Policy, Elsevier, vol. 75(C), pages 1-14.
    5. Mason, Nicole M. & Wineman, Ayala & Kirimi, Lilian & Mather, David, 2016. "The Effects of Kenya’s ‘Smarter’ Input Subsidy Program on Smallholder Behavior and Incomes: Do Different Quasi-Experimental Approaches Lead to the Same Conclusions?," Food Security Collaborative Working Papers 232090, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    6. Sheahan, Megan & Olwande, John & Kirimi, Lilian & Jayne, Thom S., 2014. "Targeting of Subsidized Fertilizer Under Kenya's National Accelerated Agricultural Input Access Program (NAAIAP)," Working Papers 202590, Egerton University, Tegemeo Institute of Agricultural Policy and Development.
    7. Aminou Arouna & Jeffrey D. Michler & Wilfried G. Yergo & Kazuki Saito, 2021. "One Size Fits All? Experimental Evidence on the Digital Delivery of Personalized Extension Advice in Nigeria," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(2), pages 596-619, March.
    8. Mather, David & Minde, Isaac, 2016. "Fertilizer subsidies and how targeting conditions crowding in/out: An assessment of smallholder fertilizer demand in Tanzania," Food Security Collaborative Working Papers 260442, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    9. Omotilewa, Oluwatoba J. & Jayne, T.S. & Muyanga, Milu & Aromolaran, Adebayo B. & Liverpool-Tasie, Lenis Saweda O. & Awokuse, Titus, 2021. "A revisit of farm size and productivity: Empirical evidence from a wide range of farm sizes in Nigeria," World Development, Elsevier, vol. 146(C).
    10. Jayne, T.S. & Mason, Nicole M. & Burke, William J. & Ariga, Joshua, 2016. "Agricultural Input Subsidy Programs In Africa: An Assessment Of Recent Evidence," Feed the Future Innovation Lab for Food Security Policy Research Papers 259509, Michigan State University, Department of Agricultural, Food, and Resource Economics, Feed the Future Innovation Lab for Food Security (FSP).
    11. Hayatullah Ahmadzai, 2018. "Factor market participation and tests for separability in Afghanistan," Discussion Papers 2018-10, University of Nottingham, CREDIT.
    12. 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).
    13. Takeshima, Hiroyuki & Liverpool-Tasie, Lenis Saweda O., 2015. "Fertilizer subsidies, political influence and local food prices in sub-Saharan Africa: Evidence from Nigeria," Food Policy, Elsevier, vol. 54(C), pages 11-24.
    14. Mathy Sane & Miroslav Hajek & Chukwudi Nwaogu & Ratna Chrismiari Purwestri, 2021. "Subsidy as An Economic Instrument for Environmental Protection: A Case of Global Fertilizer Use," Sustainability, MDPI, vol. 13(16), pages 1-20, August.
    15. Drall, Anviksha & Mandal, Sabuj Kumar, 2021. "Investigating the existence of entry barriers in rural non-farm sector (RNFS) employment in India: A theoretical modelling and an empirical analysis," World Development, Elsevier, vol. 141(C).
    16. Amadu, Festus O. & Miller, Daniel C. & McNamara, Paul E., 2020. "Agroforestry as a pathway to agricultural yield impacts in climate-smart agriculture investments: Evidence from southern Malawi," Ecological Economics, Elsevier, vol. 167(C).
    17. Khor, Ling & Zeller, Manfred, 2015. "Perception of Substandard Fertilizer and Its Impact on Use Intensity," 2015 Conference, August 9-14, 2015, Milan, Italy 211843, International Association of Agricultural Economists.
    18. Kaiyatsa, Stevier & Jumbe, Charles & Ricker-Gilbert, Jacob, 2017. "Supply-side Crowding-out and Crowding-in Effects of Malawi’s Farm Input Subsidy Program on Private-sector Input Marketing: A Quasi-experimental Field Study," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258135, Agricultural and Applied Economics Association.
    19. Levine, Kendra & Mason, Nicole M., 2014. "Do input subsidies crowd in or crowd out other soil fertility management practices? Evidence from Zambia," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170689, Agricultural and Applied Economics Association.
    20. Jacob Ricker-Gilbert & T. S. Jayne, 2017. "Estimating the Enduring Effects of Fertiliser Subsidies on Commercial Fertiliser Demand and Maize Production: Panel Data Evidence from Malawi," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(1), pages 70-97, February.
    21. Tristan Le Cotty & Elodie Maître d'Hôtel & Moctar Ndiaye & Sophie Thoyer, 2016. "Output price risk and fertilizer use decisions in Burkina Faso," Post-Print hal-01419764, HAL.

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