Dis-incentivizing sustainable intensification? The case of Zambia’s maize-fertilizer subsidy program

Poor and declining soil fertility is a major constraint to increased cereal yields in sub-Saharan Africa. While input subsidy programs (ISPs) for inorganic fertilizer are a popular and expensive tool used by African governments to increase smallholder farmers’ cereal yields, far fewer resources are devoted to promoting other soil fertility management (SFM) practices that can improve soil health, increase cereal yield response to inorganic fertilizer, and support sustainable agricultural intensification. Moreover, little is known about how ISPs affect farmers’ use of such SFM practices. We examine whether and to what extent household participation in Zambia’s maize-fertilizer subsidy program affects the household’s use of fallowing, intercropping, crop rotation, and animal manure. Using nationally-representative panel survey data from Zambian smallholder farm households, we find that Zambia’s maize-fertilizer subsidy program reduces the probability and extent of fallowing and intercropping of maize with other crops. In addition, we find some evidence that the program induces an increase in continuous maize cultivation on the same plot over time; however, the weight of the evidence suggests no statistically significant ISP effects on the use of animal manure. The analysis uses the Mundlak-Chamberlain device to control for time-invariant unobserved heterogeneity and addresses concerns related to the endogeneity of selection into the subsidy program with an instrumental variables/control function approach. Overall, our results suggest that Zambia’s maize-fertilizer subsidy program may have dis-incentivized sustainable intensification rather than promoted it.