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Modelling farm-household level impacts of fertilizer subsidy programs on productivity and food security: The case of Ethiopia

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  • Riesgo, Laura
  • Louhichi, Kamel
  • Paloma, Sergio Gomez y

Abstract

Fertilizer subsidy program is one of the most well-known and politically sensitive policies in Sub-Saharan countries. Countries such as Malawi, Nigeria, Ghana and Ethiopia are characterized by large funded fertilizer subsidy programs in recent years. Malawi, Ghana and Nigeria administer a targeted input subsidy program (e.g. fertiliser voucher program), while Ethiopia uses a universal subsidy program where the government imports fertilizer and distributes it among farmers at below-market price through the network of cooperative unions. These two programs, highly discussed in the literature, often raise a debate. This paper aims at contributing to this discussion by assessing the likely impacts of these two fertilizer subsidy programs (flexible and targeted programs) on the productivity and food security of Ethiopian smallholder farmers. A novel farm-household model, FSSIM-Dev (Farm System Simulator for Developing Countries), is used to test both programs as well as to assess their production, consumption and welfare effects on a nationally representative sample of farm households in Ethiopia.

Suggested Citation

  • Riesgo, Laura & Louhichi, Kamel & Paloma, Sergio Gomez y, 2016. "Modelling farm-household level impacts of fertilizer subsidy programs on productivity and food security: The case of Ethiopia," 2016 Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 249265, African Association of Agricultural Economists (AAAE).
    • Handle: RePEc:ags:aaae16:249265
    DOI: 10.22004/ag.econ.249265
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    References listed on IDEAS

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    1. Pierre Mérel & Santiago Bucaram, 2010. "Exact calibration of programming models of agricultural supply against exogenous supply elasticities," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 37(3), pages 395-418, September.
    2. Ricker-Gilbert, Jacob & Jayne, Thomas S., 2011. "What are the Enduring Effects of Fertilizer Subsidy Programs on Recipient Farm Households? Evidence from Malawi," Staff Paper Series 109593, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    3. Headey, Derek & Dereje, Mekdim & Taffesse, Alemayehu Seyoum, 2014. "Land constraints and agricultural intensification in Ethiopia: A village-level analysis of high-potential areas," Food Policy, Elsevier, vol. 48(C), pages 129-141.
    4. Christopher B. Barrett & Michael R. Carter, 2013. "The Economics of Poverty Traps and Persistent Poverty: Empirical and Policy Implications," Journal of Development Studies, Taylor & Francis Journals, vol. 49(7), pages 976-990, July.
    5. Louhichi, Kamel & Gomez y Paloma, Sergio, 2014. "A farm household model for agri-food policy analysis in developing countries: Application to smallholder farmers in Sierra Leone," Food Policy, Elsevier, vol. 45(C), pages 1-13.
    6. Louhichi, Kamel & Ciaian, Pavel & Espinosa, Maria & Colen, Liesbeth & Perni, Angel & Gomez y Paloma, Sergio, 2015. "Farm-level economic impacts of EU-CAP greening measures," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205309, Agricultural and Applied Economics Association.
    7. Kamel Louhichi & Sergio Gomez y Paloma & Hatem Belhouchette & Thomas Allen & Jacques Fabre & María Blanco Fonseca & Roza Chenoune & Szvetlana Acs & Guillermo Flichman, 2013. "Modelling Agri-Food Policy Impact at Farm-household Level in Developing Countries (FSSIM-Dev): Application to Sierra Leone," JRC Research Reports JRC80707, Joint Research Centre.
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    Cited by:

    1. Komarek, Adam M. & Drogue, Sophie & Chenoune, Roza & Hawkins, James & Msangi, Siwa & Belhouchette, Hatem & Flichman, Guillermo, 2017. "Agricultural household effects of fertilizer price changes for smallholder farmers in central Malawi," Agricultural Systems, Elsevier, vol. 154(C), pages 168-178.
    2. Hossein Azadi & Fien De Rudder & Koen Vlassenroot & Fredu Nega & Jan Nyssen, 2017. "Targeting International Food Aid Programmes: The Case of Productive Safety Net Programme in Tigray, Ethiopia," Sustainability, MDPI, vol. 9(10), pages 1-15, September.

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    Keywords

    Consumer/Household Economics; Food Security and Poverty;

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