IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v11y2019i19p5161-d269122.html
   My bibliography  Save this article

Affordability Linked with Subsidy: Impact of Fertilizers Subsidy on Household Welfare in Pakistan

Author

Listed:
  • Akhter Ali

    (International Maize and Wheat Improvement Center (CIMMYT), Islamabad 44000, Pakistan)

  • Dil Bahadur Rahut

    (International Maize and Wheat Improvement Center (CIMMYT), El Batán, Texcoco C.P. 56237, Mexico)

  • Muhammad Imtiaz

    (International Maize and Wheat Improvement Center (CIMMYT), Islamabad 44000, Pakistan)

Abstract

Historically, the government of Pakistan has been providing subsidy on fertilizers, and the most recent subsidy program started during 2015–2016. The current study aims to estimate the impact of the fertilizers subsidy program on fertilizers application and its impact on the crops yield and household income levels using a comprehensive cross-sectional dataset collected from 850 farmers from all four major provinces of Pakistan. The fertilizer subsidy program enabled 80% of the farmers to apply recommended doses of fertilizers, and also incentivized the farmers to bring more area under cultivation. The empirical analysis has been carried out by employing the propensity score matching approach (PSM), and results indicated that fertilizer subsidy has a positive impact on crops yield and household income levels. As a result of subsidy, the wheat yields are higher in the range of 65–71 kg per hectare while the rice yields are higher in the range of 34–43 kg per hectare. The household income levels are higher in the range of 5671 to 6549 rupees. The fertilizer subsidy on a sustainable basis can encourage the resource-poor farmers to apply recommended doses of fertilizers and thus increase crop production, thereby contributing to the improvement in their livelihood.

Suggested Citation

  • Akhter Ali & Dil Bahadur Rahut & Muhammad Imtiaz, 2019. "Affordability Linked with Subsidy: Impact of Fertilizers Subsidy on Household Welfare in Pakistan," Sustainability, MDPI, vol. 11(19), pages 1-12, September.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:19:p:5161-:d:269122
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/11/19/5161/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/11/19/5161/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kumaresan Govindan & Suresh Chandra Babu, 2001. "Supply response under market liberalisation: A case study of Malawian agriculture," Development Southern Africa, Taylor & Francis Journals, vol. 18(1), pages 93-106.
    2. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, February.
    3. Peter Warr & Arief Anshory Yusuf, 2014. "Fertilizer subsidies and food self-sufficiency in Indonesia," Agricultural Economics, International Association of Agricultural Economists, vol. 45(5), pages 571-588, September.
    4. Akhter Ali & Muhammad Sharif, 2012. "Impact of farmer field schools on adoption of integrated pest management practices among cotton farmers in Pakistan," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 17(3), pages 498-513.
    5. Akhter Ali & Muhammad Sharif, 2011. "Impact of Integrated Weed Management on Cotton Producers' Earnings in Pakistan," Asian Economic Journal, East Asian Economic Association, vol. 25(4), pages 413-428, December.
    6. Chibwana, Christopher & Fisher, Monica & Shively, Gerald, 2012. "Cropland Allocation Effects of Agricultural Input Subsidies in Malawi," World Development, Elsevier, vol. 40(1), pages 124-133.
    7. Akhter Ali & Awudu Abdulai, 2010. "The Adoption of Genetically Modified Cotton and Poverty Reduction in Pakistan," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(1), pages 175-192, February.
    8. Hazell, P.B.R. & Poulton, Colin & Wiggins, Steve & Dorward, Andrew, 2007. "The future of small farms for poverty reduction and growth:," 2020 vision discussion papers 42, International Food Policy Research Institute (IFPRI).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yasir A. Nasereldin & Abbas Ali Chandio & Maurice Osewe & Muhammad Abdullah & Yueqing Ji, 2023. "The Credit Accessibility and Adoption of New Agricultural Inputs Nexus: Assessing the Role of Financial Institutions in Sudan," Sustainability, MDPI, vol. 15(2), pages 1-18, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rahut, Dil Bahadur & Ali, Akhter & Behera, Bhagirath, 2015. "Household participation and effects of community forest management on income and poverty levels: Empirical evidence from Bhutan," Forest Policy and Economics, Elsevier, vol. 61(C), pages 20-29.
    2. Ali, Akhter & Bahadur Rahut, Dil & Behera, Bhagirath, 2016. "Factors influencing farmers׳ adoption of energy-based water pumps and impacts on crop productivity and household income in Pakistan," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 48-57.
    3. Ashimwe, Olive, 2016. "An Economic Analysis Of Impact Of Weather Index-Based Crop Insurance On Household Income In Huye District Of Rwanda," Research Theses 265675, Collaborative Masters Program in Agricultural and Applied Economics.
    4. Zhang, Lin & Findeis, Jill L., 2010. "Intra-Household Time Allocation and Labor Migration Decisions in Rural South China," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61520, Agricultural and Applied Economics Association.
    5. Dan Pan, 2014. "The Impact of Agricultural Extension on Farmer Nutrient Management Behavior in Chinese Rice Production: A Household-Level Analysis," Sustainability, MDPI, vol. 6(10), pages 1-22, September.
    6. Paudel, G. & Krishna, V. & McDonald, A., 2018. "Why some inferior technologies succeed? Examining the diffusion and impacts of rotavator tillage in Nepal Terai," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277149, International Association of Agricultural Economists.
    7. Wainaina, Priscilla W. & Okello, Julius Juma & Nzuma, Jonathan M., 2012. "Impact of Contract Farming on Smallholder Poultry Farmers' Income in Kenya," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126196, International Association of Agricultural Economists.
    8. Santi Sanglestsawai & Roderick M. Rejesus & Jose M. Yorobe Jr., 2015. "Economic impacts of integrated pest management (IPM) farmer field schools (FFS): evidence from onion farmers in the Philippines," Agricultural Economics, International Association of Agricultural Economists, vol. 46(2), pages 149-162, March.
    9. Githiomi, Caroline & Muriithi, Beatrice & Irungu, Patrick & Mwungu, Chris M. & Diiro, Gracious & Affognon, Hippolyte & Mburu, John & Ekesi, Sunday, 2019. "Economic analysis of spillover effects of an integrated pest management (IPM) strategy for suppression of mango fruit fly in Kenya," Food Policy, Elsevier, vol. 84(C), pages 121-132.
    10. Ogutu, Sylvester O. & Okello, Julius J. & Otieno, David J., 2013. "Impact of Information and Communication Technology-based Market Information Services on Smallholder Farm Input Use and Productivity: The Case of Kenya," 2013 Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 157770, African Association of Agricultural Economists (AAAE).
    11. Yigezu, Y.A. & El-Shater, T. & Boughlala, M. & Bishaw, Z. & Niane, A. & Aw-Hassan, A., 2018. "Is there an economic case for legume-cereal rotation? A Case of Faba-beans in the Moroccan Wheat Based Production Systems," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277523, International Association of Agricultural Economists.
    12. Abebaw, Degnet & Haile, Mekbib G., 2013. "The impact of cooperatives on agricultural technology adoption: Empirical evidence from Ethiopia," Food Policy, Elsevier, vol. 38(C), pages 82-91.
    13. Ragasa, Catherine & Mazunda, John, 2018. "The impact of agricultural extension services in the context of a heavily subsidized input system: The case of Malawi," World Development, Elsevier, vol. 105(C), pages 25-47.
    14. Menale Kassie & Gunnar Köhlin & Randy Bluffstone & Stein Holden, 2011. "Are soil conservation technologies “win‐win?” A case study of Anjeni in the north‐western Ethiopian highlands," Natural Resources Forum, Blackwell Publishing, vol. 35(2), pages 89-99, May.
    15. Nazli, Hina & Orden, David & Sarker, Rakhal & Meilke, Karl D., 2012. "Bt Cotton Adoption and Wellbeing of Farmers in Pakistan," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126172, International Association of Agricultural Economists.
    16. Ogutu, Sylvester Ochieng & Okello, Julius Juma & Otieno, David Jakinda, 2014. "Impact of Information and Communication Technology-Based Market Information Services on Smallholder Farm Input Use and Productivity: The Case of Kenya," World Development, Elsevier, vol. 64(C), pages 311-321.
    17. Mehta, Shefali V. & Homans, Frances R. & Haight, Robert G. & Polasky, Stephen, 2005. "Optimal Bioeconomic Management Strategies for Prevention and Control of Invasive Alien Species," 2005 Annual meeting, July 24-27, Providence, RI 19505, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. Julius Manda & Cornelis Gardebroek & Makaiko Khonje & Arega Alene & Munyaradzi Mutenje & Menale Kassie, 2016. "Determinants of child nutritional status in the eastern province of Zambia: the role of improved maize varieties," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 8(1), pages 239-253, February.
    19. Olwande, John & Smale, Melinda, 2014. "Commercialization Effects On Household Income, Poverty, And Diversification: A Counterfactual Analysis Of Maize Farmers In Kenya," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170028, Agricultural and Applied Economics Association.
    20. Nawab Khan & Ram L. Ray & Hazem S. Kassem & Farhat Ullah Khan & Muhammad Ihtisham & Shemei Zhang, 2022. "Does the Adoption of Mobile Internet Technology Promote Wheat Productivity? Evidence from Rural Farmers," Sustainability, MDPI, vol. 14(13), pages 1-15, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:11:y:2019:i:19:p:5161-:d:269122. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.