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Who is benefiting from fertilizer subsidies in Indonesia ?

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  • Osorio, Camilo Gomez
  • Abriningrum, Dwi Endah
  • Armas, Enrique Blanco
  • Firdaus, Muhammad
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    Abstract

    Using the Agricultural Census 2003 and the Rice Household Survey 2008 for Indonesia, this paper analyzes the distribution of benefits from fertilizer subsidies and their impact on rice production. The findings suggest that most farmers benefit from fertilizer subsidies; however, the 40 percent largest farmers capture up to 60 percent of the subsidy. The regressive nature of the fertilizer subsidies is in line with research carried out in other countries, the result of larger farms using a larger volume of fertilizer. This paper confirms that fertilizer used in adequate quantities has a positive and significant impact on rice yields, but it also provides evidence that over-using fertilizer has an adverse impact on yields (an inverted U-curve relationship).

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    Bibliographic Info

    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5758.

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    Date of creation: 01 Aug 2011
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    Handle: RePEc:wbk:wbrwps:5758

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    Related research

    Keywords: Fertilizers; Crops&Crop Management Systems; Economic Theory&Research; Regional Economic Development; Rural Poverty Reduction;

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    1. Fuglie, Keith O., 2003. "Productivity Growth in Indonesian Agriculture, 1961-2000," 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia 57868, Australian Agricultural and Resource Economics Society.
    2. Ramón López, 2004. "Effect of the Structure of Rural Public Expenditures on Agricultural Growth and Rural Poverty in Latin America," IDB Publications 50958, Inter-American Development Bank.
    3. Dorward, Andrew & Chirwa, Ephraim & Kelly, Valerie A. & Jayne, Thomas S. & Slater, Rachel & Boughton, Duncan, 2008. "Evaluation Of The 2006/7 Agricultural Input Subsidy Programme, Malawi. Final Report," Food Security Collaborative Working Papers 97143, Michigan State University, Department of Agricultural, Food, and Resource Economics.
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