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Do input Subsidies Reduce Poverty among Smallholder Farm Households? Panel Survey Evidence from Zambia

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  • Mason, Nicole
  • Tembo, Solomon

Abstract

Many of the ‘new’ agricultural input subsidy programs (ISPs) in sub-Saharan Africa include among their objectives raising farm incomes and reducing rural poverty, but there is a dearth of empirical evidence on whether ISPs are achieving these objectives. Focusing on the case of Zambia, where ISPs account for approximately 50% of all agricultural sector poverty reduction program expenditures, we use nationally-representative panel survey data to estimate the effects of ISP fertilizer on smallholder farm household incomes, poverty incidence, and poverty severity based on the US$2 and US$1.25/capita/day poverty lines. Panel data (fixed effects and correlated random effects) and instrumental variables/control function methods are used to correct for the potential endogeneity of subsidized fertilizer to household incomes and poverty status. Results suggest that although ISP fertilizer raises incomes, the increase is not large enough or widely distributed enough to substantively reduce poverty incidence or severity among smallholder farm households in Zambia.

Suggested Citation

  • 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.
    • Handle: RePEc:ags:iaae15:212233
    DOI: 10.22004/ag.econ.212233
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    Cited by:

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    2. Nicole M. Mason & Ayala Wineman & Lilian Kirimi & David Mather, 2017. "The Effects of Kenya's ‘Smarter’ Input Subsidy Programme on Smallholder Behaviour and Incomes: Do Different Quasi-experimental Approaches Lead to the Same Conclusions?," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(1), pages 45-69, February.
    3. Mason, Nicole M. & Wineman, Ayala & Kirimi, Lilian & Mather, David, 2015. "The effects of Kenya’s ‘smarter’ input subsidy," Food Security Collaborative Policy Briefs 232093, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    4. Fung, Winnie & Liverpool-Tasie, Saweda & Mason, Nicole & Oyelere, Ruth, 2015. "Can Crop Purchase Programs Reduce Poverty and Improve Welfare in Rural Communities? Evidence from the Food Reserve Agency in Zambia," 2015 Conference, August 9-14, 2015, Milan, Italy 211637, International Association of Agricultural Economists.
    5. Zinnbauer, Maximilian & Mockshell, Jonathan & Zeller, Manfred, 2018. "Effects if Fertilizer Subsidies in Zambia: A Literature Review," MPRA Paper 84125, University Library of Munich, Germany.

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