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The influence of farm input subsidies on the adoption of natural resource management technologies

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  • Koppmair, Stefan
  • Kassie, Menale
  • Qaim, Matin

Abstract

Farm input subsidies are often criticised on economic and ecological grounds. The promotion of natural resource management (NRM) technologies is widely seen as more sustainable to increase agricultural productivity and food security. Relatively little is known about how input subsidies affect farmers’ decisions to adopt NRM technologies. There are concerns of incompatibility, because NRM technologies are one strategy to reduce the use of external inputs in intensive production systems. However, in smallholder systems of Africa, where the average use of external inputs is low, there may possibly be interesting complementarities. Here, we analyse the situation of Malawi’s Farm Input Subsidy Program (FISP). Using panel data from smallholder farm households, we develop a multivariate probit model and examine how FISP participation affects farmers’ decisions to adopt various NRM technologies, such as intercropping of maize with legumes, use of organic manure, water conservation practices and vegetative strips. As expected, FISP increases the use of inorganic fertilizer and improved maize seeds. Yet, we also observe a positive association between FISP and the adoption of certain NRM technologies. For other NRM technologies, we find no significant effect. We conclude that input subsidies and the promotion of NRM technologies can be compatible strategies.

Suggested Citation

  • Koppmair, Stefan & Kassie, Menale & Qaim, Matin, 2017. "The influence of farm input subsidies on the adoption of natural resource management technologies," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 61(4), October.
    • Handle: RePEc:ags:aareaj:313552
    DOI: 10.22004/ag.econ.313552
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    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. 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.
    4. Makaiko G. Khonje & Christone Nyondo & Lemekezani Chilora & Julius H. Mangisoni & Jacob Ricker‐Gilbert & William J. Burke, 2022. "Exploring adoption effects of subsidies and soil fertility management in Malawi," Journal of Agricultural Economics, Wiley Blackwell, vol. 73(3), pages 874-892, September.
    5. Louis Sears & David Lim & C.-Y. Cynthia Lin Lawell, 2018. "The Economics of Agricultural Groundwater Management Institutions: The Case of California," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 4(03), pages 1-21, July.
    6. Mason, N. & Morgan, S. & Levine, N.K. & Zulu-Mbata, O., 2018. "Dis-incentivizing sustainable intensification? The case of Zambia s fertilizer subsidy program," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277491, International Association of Agricultural Economists.
    7. Ali M. Oumer & Michael Burton & Atakelty Hailu & Amin Mugera, 2020. "Sustainable agricultural intensification practices and cost efficiency in smallholder maize farms: Evidence from Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 51(6), pages 841-856, November.
    8. 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.
    9. 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.
    10. Awais Jabbar & Qun Wu & Jianchao Peng & Jian Zhang & Asma Imran & Luo Yao, 2020. "Synergies and Determinants of Sustainable Intensification Practices in Pakistani Agriculture," Land, MDPI, vol. 9(4), pages 1-16, April.
    11. Jessica Rudnick & Mark Lubell & Sat Darshan S. Khalsa & Stephanie Tatge & Liza Wood & Molly Sears & Patrick H. Brown, 2021. "A farm systems approach to the adoption of sustainable nitrogen management practices in California," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 38(3), pages 783-801, September.
    12. 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.
    13. Oumer, Ali M. & Burton, Michael, 2018. "Drivers and Synergies in the Adoption of Sustainable Agricultural Intensification Practices: A Dynamic Perspective," 2018 Annual Meeting, August 5-7, Washington, D.C. 273871, Agricultural and Applied Economics Association.
    14. Makate, Clifton & Mutenje, Munyaradzi, 2021. "Discriminatory effects of gender disparities in improved seed and fertilizer use at the plot-level in Malawi and Tanzania," World Development Perspectives, Elsevier, vol. 23(C).
    15. Shilei Pan & Chenhui Di & Abbas Ali Chandio & Ghulam Raza Sargani & Huaquan Zhang, 2022. "Investigating the Impact of Grain Subsidy Policy on Farmers’ Green Production Behavior: Recent Evidence from China," Agriculture, MDPI, vol. 12(8), pages 1-19, August.
    16. Gloria Otieno & Wesley Mlsna Zebrowski & John Recha & Travis William Reynolds, 2021. "Gender and Social Seed Networks for Climate Change Adaptation: Evidence from Bean, Finger Millet, and Sorghum Seed Systems in East Africa," Sustainability, MDPI, vol. 13(4), pages 1-24, February.
    17. Louis Sears & Joseph Caparelli & Clouse Lee & Devon Pan & Gillian Strandberg & Linh Vuu & C. -Y. Cynthia Lin Lawell, 2018. "Jevons’ Paradox and Efficient Irrigation Technology," Sustainability, MDPI, vol. 10(5), pages 1-12, May.

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