Essays On The Impact Of Farm Input Subsidies On Farm Households In Malawi

Farm input subsidies are assumed to improve agricultural production and productivity for small resource poor farmers in developing countries by promoting the use of improved farm inputs, mainly inorganic fertilizers and hybrid seeds. This is expected to contribute to increased income from produce sales, improved food security at household and national levels, and consequently, contributing to poverty alleviation. Limited existing empirical evidence on the impact of farm input subsidies on food marketing, household welfare and migration suggests marginal effects. This thesis contributes to the existing literature by analysing the impact of farm input subsidies on farm households' maize market participation, welfare and migration by using the most recent nationally representative integrated household panel survey data for Malawi of 2010 and 2013. This thesis uses the quantity of subsidised fertilizer the household redeemed to measure the impact of farm input subsidies. Different indicators and empirical models from the ones used in the existing literature on food marketing, household welfare and migration effects of farm input subsidies are used to explore more empirical evidence. The main findings are that farm input subsidies increase farm households' market participation and food security; and reduces household members' migration. The results on market participation indicate that subsidised fertilizer increases both farmers' maize market participation as sellers and quantities they sell. On migration, subsidised fertilizer reduces rural to urban and rural to rural migration of household members. While on household welfare, the results suggest that subsidised fertilizer increases available per capita calories per day, household's months of food secure, and probability of being food secure from own production of cereals and legumes, but has statistically insignificant effects on household annual consumption expenditure

The impact of farm input subsidies on maize marketing in Malawi

This paper investigates the effects of subsidised fertilizer on marketing of maize in Malawi. It uses the nationally representative two-wave Integrated Household Panel Survey (IHPS) data of 2010 and 2013. The results suggest that subsidised fertilizer on average increases farmers’ maize market participation as sellers, total quantity of maize sold, and maize commercialisation. In addition, participation in subsidised fertilizer programme is found to increase the probability of farmers to be net sellers and increases net quantity of maize sold. However, the study finds no evidence of effect on net quantity of maize bought and on household maize self-sufficiency. These results suggest that the farm input subsidy programme has contributed toward an increased level of maize market supply engagement for small farmers and in this sense, the policy has the potential to provide the wider external benefits. Furthermore, the results have implication on the sustainability of the subsidy programme, policy formulation and design of programmes for the agricultural sector and small farmers in developing countries. JEL Classification: Q1; Q13; Q1