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The Economywide Impacts and Risks of Malawi’s Farm Input Subsidy Program

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  • Arndt, Channing
  • Pauw, Karl
  • Thurlow, James

Abstract

We estimate the impact of Malawi’s Farm Input Subsidy Program using an economywide approach. We find potentially substantial net benefits with indirect benefits accounting for about two-fifths of total benefits. Due to these indirect benefits, the cutoff at which lower fertilizer yield response rates lead to net program losses is much lower than the value suggested by existing partial equilibrium evaluations. Benefits decline with domestic financing and real fertilizer prices increases. Abstracting from extreme events, Malawi’s program potentially generates double-dividends through higher and more drought-resilient yields. Overall, our results buttress arguments for patience and a focus on program efficiency improvements.

Suggested Citation

  • Arndt, Channing & Pauw, Karl & Thurlow, James, 2014. "The Economywide Impacts and Risks of Malawi’s Farm Input Subsidy Program," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169903, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea14:169903
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    References listed on IDEAS

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    Cited by:

    1. Aragie, Emerta & Pauw, Karl & Pernechele, Valentina, 2018. "Achieving food security and industrial development in Malawi: Are export restrictions the solution?," World Development, Elsevier, vol. 108(C), pages 1-15.
    2. repec:oup:ajagec:v:99:y:2017:i:3:p:705-731. is not listed on IDEAS
    3. repec:eee:jfpoli:v:75:y:2018:i:c:p:1-14 is not listed on IDEAS
    4. repec:eee:jfpoli:v:73:y:2017:i:c:p:104-118 is not listed on IDEAS
    5. Mason, Nicole M. & Wineman, Ayala & Kirimi, Lilian & Mather, David, 2017. "The Effects Of Kenya’S ‘Smarter’ Input Subsidy Program On Smallholder Behavior And Incomes: Do Different Quasi-Experimental Approaches Lead To The Same Conclusions?," Feed the Future Innovation Lab for Food Security Policy Research Papers 259532, Michigan State University, Department of Agricultural, Food, and Resource Economics, Feed the Future Innovation Lab for Food Security (FSP).
    6. Tony Addison, 2015. "Thirty years in Africa.s development: From structural adjustment to structural transformation?," WIDER Working Paper Series 119, World Institute for Development Economic Research (UNU-WIDER).
    7. repec:jid:journl:y:2018:v:26:i:1:p:1-48 is not listed on IDEAS
    8. Mason, Nicole M. & Wineman, Ayala & Kirimi, Lilian & Mather, David, 2016. "The Effects of Kenya’s ‘Smarter’ Input Subsidy Program on Smallholder Behavior and Incomes: Do Different Quasi-Experimental Approaches Lead to the Same Conclusions?," Working Papers 233674, Egerton University, Tegemeo Institute of Agricultural Policy and Development.
    9. Mason, Nicole & Tembo, Solomon, 2015. "Do Input Subsidies Reduce Poverty among Smallholder Farm Households? Panel Survey Evidence from Zambia," 2015 Conference, August 9-14, 2015, Milan, Italy 212448, International Association of Agricultural Economists.
    10. Sudhanshu Handa & Silvio Daidone & Amber Peterman & Benjamin Davis & Audrey Pereira & Tia Palermo & Jennifer Yablonski, 2017. "Myth-busting? Confronting Six Common Perceptions about Unconditional Cash Transfers as a Poverty Reduction Strategy in Africa," Papers inwopa899, Innocenti Working Papers.
    11. repec:eee:wdevel:v:106:y:2018:i:c:p:124-135 is not listed on IDEAS
    12. repec:ags:afjare:258605 is not listed on IDEAS
    13. Mason, Nicole & Tembo, Solomon, 2015. "Do input Subsidies Reduce Poverty among Smallholder Farm Households? Panel Survey Evidence from Zambia," 2015 Conference, August 9-14, 2015, Milan, Italy 212233, International Association of Agricultural Economists.
    14. Mason, Nicole & Tembo, Solomon, 2015. "Do Input Subsidies reduce Poverty among Smallholder Farm Households? Panel Survey Evidence from Zambia," 2015 Conference, August 9-14, 2015, Milan, Italy 212232, International Association of Agricultural Economists.
    15. Raffaello Cervigni & Pasquale Lucio Scandizzo, 2017. "The Ocean Economy in Mauritius," World Bank Other Operational Studies 28562, The World Bank.

    More about this item

    Keywords

    Agricultural and Food Policy; Crop Production/Industries; International Development; Public Economics;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O22 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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