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The impact of farm input subsidies on maize marketing in Malawi

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  • Sibande, Lonester
  • Bailey, Alastair
  • Davidova, Sophia

Abstract

This paper investigates the effects of subsidized fertilizer on marketing of maize in Malawi. It uses the nationally representative two-wave Integrated Household Panel Survey (IHPS) data of 2010 and 2013. The correlated random effects method of analyzing linear and non-linear panel data models is used to estimate the average partial effects. The control function approach of the instrumental variables methods is employed to control for potential endogeneity of subsidized fertilizer. The results suggest that subsidized fertilizer increases farmers’ market participation as sellers, quantity sold and commercialization of maize. However, the magnitudes of the effects are relatively smaller, which highlight the challenge of improving farm household income from sales of staple food crops. The results have implication on sustainability of the program, policy formulation and design of programs for the agricultural sector and small farmers in developing countries.

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  • Sibande, Lonester & Bailey, Alastair & Davidova, Sophia, 2015. "The impact of farm input subsidies on maize marketing in Malawi," 2015 Conference, August 9-14, 2015, Milan, Italy 211918, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae15:211918
    DOI: 10.22004/ag.econ.211918
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    2. 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.
    3. Camara, Alhassane & Savard, Luc, 2023. "Impact of agricultural input subsidy policy on market participation and income distribution in Africa: A bottom-up/top-down approach," Economic Modelling, Elsevier, vol. 129(C).
    4. Kate R. Schneider & Luc Christiaensen & Patrick Webb & William A. Masters, 2023. "Assessing the affordability of nutrient‐adequate diets," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(2), pages 503-524, March.
    5. Mwale, Martin & Smith, Anja & von Fintel, Dieter, 2022. "Child nutrition and farm input subsidies: The complementary role of early healthcare and nutrition programs in Malawi," Food Policy, Elsevier, vol. 113(C).
    6. Mwale, Martin Limbikani, 2022. "Unintended consequences of farm input subsidies: women’s contraceptive usage and knock-on effects on children," MPRA Paper 112689, University Library of Munich, Germany.
    7. Mwale, Martin Limbikani & Fintel, Dieter von & Marchetta, Francesca & Smith, Anja & Kamninga, Tony Mwenda, 2021. "The Negative Impact of Farm Input Subsidies on Women's Agency in Malawi's Matrilocal Settlements," 2021 Conference, August 17-31, 2021, Virtual 315041, International Association of Agricultural Economists.
    8. Mwale, Martin & Kamninga, Tony Mwenda & Cassim, Lucius, 2021. "The Effects of the Malawi Farm Input Subsidy Program on Household per-Capita Consumption Convergence," 2021 Conference, August 17-31, 2021, Virtual 315045, International Association of Agricultural Economists.
    9. 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).
    10. Valdemar J. Wesz Junior & Simone Piras & Catia Grisa & Stefano Ghinoi, 2021. "Assessing Brazilian agri-food policies: what impact on family farms?," Papers 2105.14996, arXiv.org.
    11. Zheng, Shan & Yu, Lianghong, 2022. "The government's subsidy strategy of carbon-sink fishery based on evolutionary game," Energy, Elsevier, vol. 254(PB).
    12. Julien, Jacques C. & Bravo-Ureta, Boris E. & Rada, Nicholas E., 2019. "Assessing farm performance by size in Malawi, Tanzania, and Uganda," Food Policy, Elsevier, vol. 84(C), pages 153-164.
    13. Kaiyatsa, Stevier & Matita, Mirriam & Chirwa, Ephraim & Mazalale, Jacob, 2020. "The groundnuts Fairtrade arrangement and its spillover effects on agricultural commercialization and household welfare outcomes: Empirical evidence from central Malawi," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304221, Agricultural and Applied Economics Association.
    14. Schneider, Kate & Christiaensen, Luc & Webb, Patrick & Masters, William A., 2021. "Availability, Seasonality, and Affordability of Nutritious Diets for All – Evidence from Malawi," 2021 Conference, August 17-31, 2021, Virtual 315036, International Association of Agricultural Economists.
    15. Martin Mwale & Dieter von Fintel & Anja Smith, 2022. "School drop out and farm input subsidies: gender and kinship heterogeneity in Malawi," Working Papers 01/2022, Stellenbosch University, Department of Economics.
    16. Sylvester Amoako Agyemang & Tomáš Ratinger & Miroslava Bavorová, 2022. "The Impact of Agricultural Input Subsidy on Productivity: The Case of Ghana," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(3), pages 1460-1485, June.
    17. Sibande, L., 2018. "Implementation dilemma of agricultural policies: Trade-offs or synergies? Food and nutrition security implications of extension services and farm input subsidies," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277166, International Association of Agricultural Economists.
    18. Yun Teng & Peiwen Lin, 2022. "Research on Behavioral Decision-Making of Subjects on Cultivated Land Conservation under the Goal of Carbon Neutrality," Land, MDPI, vol. 11(10), pages 1-25, September.
    19. Mwale, Martin Limbikani, 2023. "Do agricultural subsidies matter for women’s attitude towards intimate partner violence? Evidence from Malawi," Economic Modelling, Elsevier, vol. 128(C).
    20. Fujimoto, Takefumi & Suzuki, Aya, 2021. "Do Fertilizer and Seed Subsidies Strengthen Farmers' Market Participation? the Impact of Tanzania NAIVS on Farmers' Purchase of Agricultural Inputs and Their Maize-Selling Activities," 2021 Conference, August 17-31, 2021, Virtual 315044, International Association of Agricultural Economists.
    21. Xie, Hualin & Wang, Wei & Zhang, Xinmin, 2018. "Evolutionary game and simulation of management strategies of fallow cultivated land: A case study in Hunan province, China," Land Use Policy, Elsevier, vol. 71(C), pages 86-97.
    22. Matita, Mirriam & Chiwaula, Levison & Wadonda Chirwa, Ephraim & Mazalale, Jacob & Walls, Helen, 2022. "Subsidizing improved legume seeds for increased household dietary diversity: Evidence from Malawi’s Farm Input Subsidy Programme with implications for addressing malnutrition in all its forms," Food Policy, Elsevier, vol. 113(C).
    23. Kwon, Daye & Myers, Robert J. & Mason, Nicole M., 2022. "How do input subsidy programs affect smallholder households’ dietary diversity? Evidence from Zambia," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322493, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    Farm Management; International Development; Marketing;
    All these keywords.

    JEL classification:

    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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