IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-04586374.html
   My bibliography  Save this paper

Government fertilizer subsidies, input use, and income: The case of Senegal

Author

Listed:
  • Aymeric Ricome

    (UMR G-EAU - Gestion de l'Eau, Acteurs, Usages - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - BRGM - Bureau de Recherches Géologiques et Minières - IRD - Institut de Recherche pour le Développement - AgroParisTech - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement, Cirad-ES - Département Environnements et Sociétés - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement, JRC - European Commission - Joint Research Centre [Seville])

  • Jesus Barreiro-Hurle

    (JRC - European Commission - Joint Research Centre [Seville])

  • Cheickh Sadibou Fall

    (ISRA - Institut Sénégalais de Recherches Agricoles [Dakar])

Abstract

Most Sub-Saharan countries implement input subsidy programs (ISPs) in an attempt to increase fertilizer use, crop yields and farmers' income and to improve household food security. Senegal is no exception and has had an ISP in place for the last 15 years. This article assesses how access to subsidized fertilizer under the ISP is associated with changes in fertilizer and manure use and gross margin. Using household-level data from two agroecological zones, we employ an endogenous switching regression framework to control for the potential endogeneity of access to subsidized fertilizer. We find that access to subsidized fertilizer is associated with an increase in the total use of fertilizer of +39 % but also with a reduction in the use of commercial fertilizer of 18 %. Access to subsidized fertilizer is also associated with a reduction in the likelihood of using manure of 5 % and an increase in farmers' total gross margin of 11 %. Results are heterogeneous across agroecological zones, with a strong crowding-out of commercial fertilizer where widely available to farmers. In this case, revising the design of the ISP could lead to improved efficiency.

Suggested Citation

  • Aymeric Ricome & Jesus Barreiro-Hurle & Cheickh Sadibou Fall, 2024. "Government fertilizer subsidies, input use, and income: The case of Senegal," Post-Print hal-04586374, HAL.
    • Handle: RePEc:hal:journl:hal-04586374
    DOI: 10.1016/j.foodpol.2024.102623
    Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-04586374
    as

    Download full text from publisher

    File URL: https://hal.inrae.fr/hal-04586374/document
    Download Restriction: no
    File URL: https://libkey.io/10.1016/j.foodpol.2024.102623?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Arthur Lewbel, 2012. "Using Heteroscedasticity to Identify and Estimate Mismeasured and Endogenous Regressor Models," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 30(1), pages 67-80.
    2. 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.
    3. Abdoulaye Seck, 2017. "Fertiliser subsidy and agricultural productivity in Senegal," The World Economy, Wiley Blackwell, vol. 40(9), pages 1989-2006, September.
    4. Mason, Nicole & Tembo, Solomon, 2015. "Do Input Subsidies reduce Poverty among Smallholder Farm Households? Panel Survey Evidence from Zambia," 2015 Conference, August 9-14, 2015, Milan, Italy 212232, International Association of Agricultural Economists.
    5. Clougherty, Joseph A. & Duso, Tomaso & Muck, Johannes, 2016. "Correcting for Self-selection Based Endogeneity in Management Research: Review, Recommendations and Simulations," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 19, pages 286-347.
    6. Salvatore Di Falco & Marcella Veronesi & Mahmud Yesuf, 2011. "Does Adaptation to Climate Change Provide Food Security? A Micro-Perspective from Ethiopia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(3), pages 825-842.
    7. Michael Lokshin & Zurab Sajaia, 2004. "Maximum likelihood estimation of endogenous switching regression models," Stata Journal, StataCorp LP, vol. 4(3), pages 282-289, September.
    8. Wossen, Tesfamicheal & Abdoulaye, Tahirou & Alene, Arega & Feleke, Shiferaw & Ricker-Gilbert, Jacob & Manyong, Victor & Awotide, Bola Amoke, 2017. "Productivity and Welfare Effects of Nigeria's e-Voucher-Based Input Subsidy Program," World Development, Elsevier, vol. 97(C), pages 251-265.
    9. T.S. Jayne & David Mather & Nicole Mason & Jacob Ricker-Gilbert, 2013. "How do fertilizer subsidy programs affect total fertilizer use in sub-Saharan Africa? Crowding out, diversion, and benefit/cost assessments," Agricultural Economics, International Association of Agricultural Economists, vol. 44(6), pages 687-703, November.
    10. van Dijk, Michiel & Morley, Tom & Jongeneel, Roel & van Ittersum, Martin & Reidsma, Pytrik & Ruben, Ruerd, 2017. "Disentangling agronomic and economic yield gaps: An integrated framework and application," Agricultural Systems, Elsevier, vol. 154(C), pages 90-99.
    11. Pan, Lei & Christiaensen, Luc, 2012. "Who is Vouching for the Input Voucher? Decentralized Targeting and Elite Capture in Tanzania," World Development, Elsevier, vol. 40(8), pages 1619-1633.
    12. Sarah Baird & Craig McIntosh & Berk Özler, 2011. "Cash or Condition? Evidence from a Cash Transfer Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(4), pages 1709-1753.
    13. Michael Morris & Valerie A. Kelly & Ron J. Kopicki & Derek Byerlee, 2007. "Fertilizer Use in African Agriculture : Lessons Learned and Good Practice Guidelines," World Bank Publications - Books, The World Bank Group, number 6650, December.
    14. 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.
    15. Nicole M. Mason & T.S. Jayne & Rhoda Mofya-Mukuka, 2013. "Zambia's input subsidy programs," Agricultural Economics, International Association of Agricultural Economists, vol. 44(6), pages 613-628, November.
    16. Nicole M. Mason & Thomas S. Jayne, 2014. "Fertiliser subsidies and smallholder commercial fertiliser purchases: crowding out, leakage, and policy implications for Zambia," Journal of Agricultural Economics, Wiley Blackwell, vol. 65(2), pages 527-528, June.
    17. 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.
    18. Lenis Saweda O. Liverpool-Tasie & Hiroyuki Takeshima, 2013. "Input promotion within a complex subsector: fertilizer in Nigeria," Agricultural Economics, International Association of Agricultural Economists, vol. 44(6), pages 581-594, November.
    19. Bardhan, Pranab & Mookherjee, Dilip, 2005. "Decentralizing antipoverty program delivery in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 675-704, April.
    20. William J. Burke & Sieglinde S. Snapp & Thom S. Jayne, 2020. "An in‐depth examination of maize yield response to fertilizer in Central Malawi reveals low profits and too many weeds," Agricultural Economics, International Association of Agricultural Economists, vol. 51(6), pages 923-940, November.
    21. Stein Holden & Rodney Lunduka, 2012. "Do fertilizer subsidies crowd out organic manures? The case of Malawi," Agricultural Economics, International Association of Agricultural Economists, vol. 43(3), pages 303-314, May.
    22. Chibwana, Christopher & Shively, Gerald & Fisher, Monica & Jumbe, Charles & Masters, William A., 2014. "Measuring the impacts of Malawi’s farm input subsidy programme," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 9(2), pages 1-16, April.
    23. Mason, Nicole M. & Tembo, Solomon T., 2015. "Do Input Subsidy Programs Raise Incomes and Reduce Poverty among Smallholder Farm Households? Evidence from Zambia," Food Security Collaborative Working Papers 198702, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    24. 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.
    25. Jeffrey M. Wooldridge, 2015. "Control Function Methods in Applied Econometrics," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 420-445.
    26. Zhiying Xu & William J. Burke & Thomas S. Jayne & Jones Govereh, 2009. "Do input subsidy programs “crowd in” or “crowd out” commercial market development? Modeling fertilizer demand in a two‐channel marketing system," Agricultural Economics, International Association of Agricultural Economists, vol. 40(1), pages 79-94, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. 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.
    3. 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.
    4. 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.
    5. Holden, Stein T., 2018. "The Economics of Fertilizer Subsidies," CLTS Working Papers 9/18, Norwegian University of Life Sciences, Centre for Land Tenure Studies, revised 16 Oct 2019.
    6. Nicole M. Mason & Thomas S. Jayne & Nicolas van de Walle, 2017. "The Political Economy of Fertilizer Subsidy Programs in Africa: Evidence from Zambia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 99(3), pages 705-731.
    7. 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.
    8. Jayne, T.S. & Mason, Nicole M. & Burke, William J. & Ariga, Joshua, 2016. "Agricultural Input Subsidy Programs in Africa: An Assessment of Recent Evidence," Food Security International Development Working Papers 245892, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    9. 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.
    10. Yoko Kijima, 2022. "Effect of Nigeria’s e-voucher input subsidy program on fertilizer use, rice production, and household income," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 14(4), pages 919-935, August.
    11. 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.
    12. 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.
    13. Houssou, Nazaire & Andam, Kwaw S. & Collins, Asante-Addo, 2017. "Can better targeting improve the effectiveness of Ghana's Fertilizer Subsidy Program? Lessons from Ghana and other countries in Africa south of the Sahara," IFPRI discussion papers 1605, International Food Policy Research Institute (IFPRI).
    14. 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.
    15. Nicole M. Mason & Ayala Wineman & Lilian Kirimi & David Mather, 2017. "The Effects of Kenya's ‘Smarter’ Input Subsidy Programme on Smallholder Behaviour and Incomes: Do Different Quasi-experimental Approaches Lead to the Same Conclusions?," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(1), pages 45-69, February.
    16. Sylvester Amoako Agyemang & Tomáš Ratinger & Miroslava Bavorová, 2022. "The Impact of Agricultural Input Subsidy on Productivity: The Case of Ghana," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(3), pages 1460-1485, June.
    17. 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.
    18. Xavier Giné & Shreena Patel & Bernardo Ribeiro & Ildrim Valley, 2022. "Efficiency and equity of input subsidies: Experimental evidence from Tanzania†," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(5), pages 1625-1655, October.
    19. Morgan, Stephen N. & Mason, Nicole M. & Levine, N. Kendra & Zulu-Mbata, Olipa, 2019. "Dis-incentivizing sustainable intensification? The case of Zambia’s maize-fertilizer subsidy program," World Development, Elsevier, vol. 122(C), pages 54-69.
    20. Jayne, T.S. & Sitko, Nicholas J. & Mason, Nicole M., 2017. "Can Input Subsidy Programs Contribute To Climate Smart Agriculture?," Feed the Future Innovation Lab for Food Security Policy Research Papers 270626, Michigan State University, Department of Agricultural, Food, and Resource Economics, Feed the Future Innovation Lab for Food Security (FSP).

    More about this item

    Keywords

    Fertilizer subsidies; Crowding-out; Endogenous switching regression; Senegal; Fertilizer subsidies Crowding-out Endogenous switching regression Senegal;
    All these keywords.

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-04586374. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.