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Does Subsidizing Fertilizer Increase Yields? Evidence from Malawi


  • Ricker-Gilbert, Jacob
  • Jayne, Thomas S.
  • Black, J. Roy


Despite their strain on government and donor budgets, fertilizer subsidies have once again become popular policy tools in several Sub-Saharan Africa countries as a potential way to increase yields in staple crops like maize. Policy makers often assume that farmers who receive the subsidy will achieve yield responses that are similar to those obtained by farmers who pay commercial prices for the input. This notion has not been verified empirically. Our study uses panel data from Malawi, a country that recently implemented a fertilizer subsidy program, to compare maize yield response to fertilizer from farmers who received subsidized fertilizer with yield responses from those who paid commercial prices for the input. Descriptive results indicate that maize plots using commercial fertilizer obtain higher yields per kilogram of fertilizer than maize plots that used subsidized fertilizer. Conversely, the results obtained using a fixed-effects estimator indicate that when other factors are controlled for, maize plots that use subsidized fertilizer obtain a higher yield response than other plots. The results seems to be influenced by a group of farmers who used no fertilizer before the subsidy program began, but used subsidized fertilizer after the program was implemented. This group of farmers obtained significantly higher yields in the year when they receive the subsidy than did the rest of the farmers in the sample during that year. These findings indicate that in order to be effective, government officials should specifically target fertilizer subsidies to farmers who lack access to commercial markets or would not otherwise find it profitable to purchase the input.

Suggested Citation

  • Ricker-Gilbert, Jacob & Jayne, Thomas S. & Black, J. Roy, 2009. "Does Subsidizing Fertilizer Increase Yields? Evidence from Malawi," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49532, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea09:49532

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    References listed on IDEAS

    1. Paswel P. Marenya & Christopher B. Barrett, 2009. "Soil quality and fertilizer use rates among smallholder farmers in western Kenya," Agricultural Economics, International Association of Agricultural Economists, vol. 40(5), pages 561-572, September.
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    Cited by:

    1. Pan, Lei & Christiaensen, Luc, 2012. "Who is Vouching for the Input Voucher? Decentralized Targeting and Elite Capture in Tanzania," World Development, Elsevier, vol. 40(8), pages 1619-1633.
    2. Chirwa, Themba G., 2010. "Program evaluation of agricultural input subsidies in Malawi using treatment effects: Methods and practicability based on propensity scores," MPRA Paper 20878, University Library of Munich, Germany.
    3. Dillon, Brian & Barrett, Christopher B., 2017. "Agricultural factor markets in Sub-Saharan Africa: An updated view with formal tests for market failure," Food Policy, Elsevier, vol. 67(C), pages 64-77.
    4. Caria, A. Stefano & Tamru, Seneshaw & Bizuneh, Gera, 2011. "Food security without food transfers?: A CGE analysis for Ethiopia of the different food security impacts of fertilizer subsidies and locally sourced food transfers," IFPRI discussion papers 1106, International Food Policy Research Institute (IFPRI).

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    Malawi; Fertilizer Subsidies; Production Function; Crop Production/Industries;

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