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

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  • Stefan Koppmair
  • Menale Kassie
  • Matin Qaim

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.
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Suggested Citation

  • Stefan Koppmair & Menale Kassie & Matin Qaim, 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), pages 539-556, October.
    • Handle: RePEc:bla:ajarec:v:61:y:2017:i:4:p:539-556
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    1. Zhu, Wei & Qi, Lixia & Wang, Ruime, . "Impact of Market Price Support Measures on Chemical Fertilizer Use in China," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 9(01).
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    13. 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.
    14. Simone Santalucia & Kibrom T. Sibhatu, 2024. "Nourishing the farms, nourishing the plates: Association of climate‐smart agricultural practices with household dietary diversity and food security in smallholders," Agribusiness, John Wiley & Sons, Ltd., vol. 40(2), pages 513-533, April.
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    19. 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).
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    24. 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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