The Impact of Fertilizer Subsidies on National Fertilizer Use: An Example from Malawi

Replaced with revised version of paper 06/30/08.Agricultural and Food Policy, Crop Production/Industries,

What are the Enduring Effects of Fertilizer Subsidy Programs on Recipient Farm Households? Evidence from Malawi

Replaced with revised version of paper 08/23/11.fertilizer subsidies, Malawi, Sub-Saharan Africa, endogeneity, panel data, International Development, Political Economy, C23, C26, Q12, Q13, Q18,

What are the Dynamic Effects of Fertilizer Subsidies on Household Well‐being? Evidence from Malawi

This study uses household level panel data from Malawi to measure the contemporaneous and dynamic impacts of fertilizer subsidies on different indicators of household well‐being. Well‐being is measured in this paper using indicators contained in available survey data, such as area cultivated, maize production, asset wealth, respondent‐stated adequacy of food consumption and respondent-stated life satisfaction. The study uses fixed effects and instrumental variable methods to control for endogeneity caused by the non‐random distribution of targeted fertilizer subsidies. Results indicate that the quantity of subsidized fertilizer acquired by a household has a positive contemporaneous effect on area planted, area planted to maize and maize production at the household level. The subsidy also has a significant dynamic effect on the quantity of maize that households produce. Subsidized fertilizer has no significant contemporaneous or dynamic effect on household asset accumulation. Receiving more subsidized fertilizer does not make households feel that their food consumption has been adequate over the past year, but receiving more subsidized fertilizer makes household heads say that they are more satisfied with their lives. Subsidized fertilizer appears to be going to people with more land. In addition, people in villages where members of parliament reside also receive greater quantities of subsidized fertilizer. These findings raise questions about how subsidy recipients are targeted. Improving targeting could increase the positive impacts of fertilizer subsidies on household well‐being.Food Security and Poverty,

Does Subsidizing Fertilizer Increase Yields? Evidence from Malawi

Despite their strain on government and donor budgets, fertilizer subsidies have once again become popular policy tools in several Sub-Saharan Africa countries as a potential way to increase yields in staple crops like maize. Policy makers often assume that farmers who receive the subsidy will achieve yield responses that are similar to those obtained by farmers who pay commercial prices for the input. This notion has not been verified empirically. Our study uses panel data from Malawi, a country that recently implemented a fertilizer subsidy program, to compare maize yield response to fertilizer from farmers who received subsidized fertilizer with yield responses from those who paid commercial prices for the input. Descriptive results indicate that maize plots using commercial fertilizer obtain higher yields per kilogram of fertilizer than maize plots that used subsidized fertilizer. Conversely, the results obtained using a fixed-effects estimator indicate that when other factors are controlled for, maize plots that use subsidized fertilizer obtain a higher yield response than other plots. The results seems to be influenced by a group of farmers who used no fertilizer before the subsidy program began, but used subsidized fertilizer after the program was implemented. This group of farmers obtained significantly higher yields in the year when they receive the subsidy than did the rest of the farmers in the sample during that year. These findings indicate that in order to be effective, government officials should specifically target fertilizer subsidies to farmers who lack access to commercial markets or would not otherwise find it profitable to purchase the input.Malawi, Fertilizer Subsidies, Production Function, Crop Production/Industries,

Measuring the Impacts of Agricultural Input Subsidies in Sub-Saharan Africa: Evidence from Malawi\u27s Farm Input Subsidy Program

Malawi, a small, land-locked country in south Eastern Africa has been at the forefront of the recent push to reestablish subsidies as a way of boosting agricultural production and improving food security, especially among the poor. Its programs have been widely observed, scrutinized, and emulated. This policy brief examines Malawi’s Farm Input Subsidy Program (FISP) and distills a set of key research findings drawn from research conducted recently at Purdue University

Malawi’s Maize Marketing System

National food security in Malawi depends on improving the performance of maize markets. Ensuring that grain is consistently available at tolerable prices is crucial for consumers’ food security. At the same time, surplus producing farmers need to receive farm-gate prices consistently above production costs to intensify the use of fertilizer and other productivity enhancing technologies in a sustainable manner. These concerns give rise to the classic food price dilemma for policy makers in Malawi: how to keep prices low enough to ensure low income consumers’ access to food while keeping prices high enough to promote farm production incentives. These tensions cannot be avoided but they can be relieved through reducing food marketing margins, which shrink the wedge between producer and consumer prices. Moreover, Malawi faces major political and economic problems associated with food price instability especially given its dependence on rain fed agriculture in a region prone to drought. These issues show that improving the performance of maize markets is at the core of achieving sustainable food security and poverty reduction in Malawi.food security, Malawi, maize, marketing, food policy, Agricultural and Food Policy, Community/Rural/Urban Development, Food Security and Poverty, International Development, Marketing, q12, q18,

The effects of attribute non-attendance, simple validation questions, and their interactions on willingness to pay estimates for meat choice experiments

During an online survey, respondents were randomly assigned to a choice experiment for either pork chops or chicken breasts and were then explicitly asked which attributes they did not consider while making their choices. A simple validation question, which directed respondents to choose a specific answer, was also included. Accounting for either stated or inferred attribute non-attendance alone had no statistically significant effect on willingness-to-Pay (WTP) estimates. Those who passed the validation question had statistically significant and higher WTP for some attributes of pork chops and chicken breasts when the variable was interacted with inferred or stated attribute non-attendance (ANA). While use of a validation question appears promising, more research is needed on this point before it can be concluded that ANA alone has no impact on the WTP estimates for food choice experiments

Impact of Improved Maize Adoption on Welfare of Farm Households in Malawi: A Panel Data Analysis

This paper assesses improved maize adoption in Malawi and examines the link between adoption and household welfare using a three-year household panel data. The distributional effect of maize technology adoption is also investigated by looking at impacts across wealth and gender groups. We applied control function approach and IV regression to control for endogeneity of input subsidy and improved maize adoption. We found that modern maize variety adoption is positively correlated with the household’s own maize consumption, income and asset holdings. We found evidence that improved maize adoption has stronger impact on welfare of female-headed households and poorer households

Impact of Improved Maize Adoption on Welfare of Farm Households in Malawi: A Panel Data Analysis

This paper assesses improved maize adoption in Malawi and examines the link between adoption and household welfare using a three-year household panel data. The distributional effect of maize technology adoption is also investigated by looking at impacts across wealth and gender groups. We applied control function approach and IV regression to control for endogeneity of input subsidy and improved maize adoption. We found that modern maize variety adoption is positively correlated with the household’s own maize consumption, income and asset holdings. We found evidence that improved maize adoption has stronger impact on welfare of female-headed households and poorer households