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Productivity and Welfare Effects of Nigeria's e-Voucher-Based Input Subsidy Program

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  • Wossen, Tesfamicheal
  • Abdoulaye, Tahirou
  • Alene, Arega
  • Feleke, Shiferaw
  • Ricker-Gilbert, Jacob
  • Manyong, Victor
  • Awotide, Bola Amoke

Abstract

In an attempt to go beyond the so called “smart” subsidies, Nigeria has embarked on a potentially innovative mobile phone-based input subsidy program that provides fertilizer and improved seed subsidies through electronic vouchers. In this article, we examined the productivity and welfare effects of the program using household-level data from rural Nigeria. The article employed instrumental variable regression approach to control for the potential endogeneity of the input subsidy program. Our results suggest that the program is effective in improving productivity and welfare outcomes of beneficiary smallholders. The size of the estimated effects suggests a large improvement in productivity and welfare outcomes. Moreover, the distributional effects of the program suggest no heterogeneity effects based on gender and farm land size. These results are robust to using alternative measurements of program participation. The benefit–cost ratio of 1.11 suggests that the program is marginally cost-effective. Overall, our results suggest that while improving average productivity is a good outcome for improving food security, improving the distributional outcome of the program by targeting the most disadvantaged groups would maximize the program’s contribution to food security and poverty reduction.

Suggested Citation

  • Wossen, Tesfamicheal & Abdoulaye, Tahirou & Alene, Arega & Feleke, Shiferaw & Ricker-Gilbert, Jacob & Manyong, Victor & Awotide, Bola Amoke, 2017. "Productivity and Welfare Effects of Nigeria's e-Voucher-Based Input Subsidy Program," World Development, Elsevier, vol. 97(C), pages 251-265.
  • Handle: RePEc:eee:wdevel:v:97:y:2017:i:c:p:251-265
    DOI: 10.1016/j.worlddev.2017.04.021
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    Cited by:

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    2. Joseph I. Uduji & Elda N. Okolo-Obasi & Simplice A. Asongu, 2019. "Farmers’ Food Price Volatility and Nigeria’s Growth Enhancement Support Scheme," Working Papers 19/075, European Xtramile Centre of African Studies (EXCAS).
    3. Tossou, Dagbegnon A. & Baylis, Kathy, 2018. "Does Flexibility in Agricultural Input Subsidy Programs Improve Smallholder Crop Yields and Household Food Security? Evidence from Zambia," 2018 Annual Meeting, August 5-7, Washington, D.C. 274243, Agricultural and Applied Economics Association.
    4. Tebogo B. Seleka, 2020. "Old Wine in a New Bottle? Impact of the ISPAAD Input Subsidy Programme on the Subsistence Economy in Botswana," Working Papers 78, Botswana Institute for Development Policy Analysis.
    5. Araya Teka & Sung-Kyu Lee, 2020. "Do Agricultural Package Programs Improve the Welfare of Rural People? Evidence from Smallholder Farmers in Ethiopia," Agriculture, MDPI, Open Access Journal, vol. 10(5), pages 1-20, May.
    6. Theriault, Veronique & Smale, Melinda, 2021. "The unintended consequences of the fertilizer subsidy program on crop species diversity in Mali," Food Policy, Elsevier, vol. 102(C).
    7. Ogutu, Sylvester Ochieng & Qaim, Matin, 2019. "Commercialization of the small farm sector and multidimensional poverty," World Development, Elsevier, vol. 114(C), pages 281-293.
    8. Padmaja, S. Surendran & Kondapi, S., 2018. "Effect of women-centric community-based programme on intra-household decision making in Agriculture," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277394, International Association of Agricultural Economists.
    9. 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.
    10. Ma, W. & Grafton, Q. & Renwick, A., 2018. "Gender and Income Effects of Smartphone Use: The Case of Rural China," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277310, International Association of Agricultural Economists.
    11. Tahirou Abdoulaye & Tesfamicheal Wossen & Bola Awotide, 2018. "Impacts of improved maize varieties in Nigeria: ex-post assessment of productivity and welfare outcomes," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 10(2), pages 369-379, April.
    12. Liu, Y., 2018. "Determinants and impacts of marketing channel choice among cooperatives members: Evidence from agricultural cooperative in China," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 275898, International Association of Agricultural Economists.
    13. Hatzenbuehler, Patrick L. & Takeshima, Hiroyuki & Edeh, Hyacinth & Lawal, Akeem, 2018. "Cost and policy determinants of features of tractor markets in Nigeria: Case studies of tractor sellers in Kaduna state and tractor owners in Benue state," NSSP working papers 55, International Food Policy Research Institute (IFPRI).
    14. Hodjo, Manzamasso & Dalton, Timothy & Nakelse, Tebila & Acharya, Ram N & Blayney, Don, 2021. "From coupon to calories: Assessing input coupon impact on household food calories production," World Development Perspectives, Elsevier, vol. 22(C).
    15. Nicole M. Mason & Ayala Wineman & Solomon T. Tembo, 2020. "Reducing poverty by ‘ignoring the experts’? Evidence on input subsidies in Zambia," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 12(5), pages 1157-1172, October.
    16. 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.
    17. Tufa, A.H. & Alene, A.D. & Manda, J. & Akinwale, G., 2018. "The yield and income effects of adoption of improved soybean varieties and agronomic practices in Malawi," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277239, International Association of Agricultural Economists.
    18. Machina, Henry & Ngoma, Hambulo & Kuteya, Aukland, 2017. "Gendered impacts of agricultural subsidies in Zambia," MPRA Paper 87099, University Library of Munich, Germany.
    19. Porteous, Obie, 2020. "Trade and agricultural technology adoption: Evidence from Africa," Journal of Development Economics, Elsevier, vol. 144(C).

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