Fertilizer Subsidy, Political Influence and Local Food Prices in Sub-Saharan Africa: Evidence from Nigeria
We investigate the effects of previous fertilizer subsidy program on local grain prices in Nigeria. The program has been considered ineffective in targeting and stimulating demand for fertilizer, with potentially rampant leakages. If the program has reduced food price, however, it can still be partly justified regardless of targeting efficiency. We exploit the panel structure of Living Standard Measurement Survey – Integrated Survey on Agriculture (LSMS) collected in 2010 post-planting season and 2011 post-harvesting season. Our methods use Euclidian distance between each district and state governors’ origin district in each state to identify fertilizer subsidy distribution. We also use proxy variable that accounts for both direct subsidy provision and indirect leakage effects to measure the effective size of subsidy. Fertilizer subsidy generally had no effect on maize and sorghum price. In northern Nigeria, fertilizer subsidy might have lowered district level price of local rice, but only to a limited extent. Low market orientation of many subsidy recipients, crowding out of commercial fertilizer, and political influence in subsidy allocations may explain such low impact. We also discuss how our methods minimize potential biases due to errors-in-variable and sample selection.
|Date of creation:||2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ags:aaea13:150327. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.