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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 212448, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae15:212448
    DOI: 10.22004/ag.econ.212448
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    Consumer/Household Economics; Food Security and Poverty;

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