Fertilizer Subsidies and Smallholder Commercial Fertilizer Purchases: Crowding out, Leakage, and Policy Implications for Zambia
Two key determinants of the effect of a fertilizer subsidy program on total fertilizer use are (a) the extent to which subsidized fertilizer “crowds out” or “displaces” farmers’ purchases of fertilizer from commercial retailers, and (b) the extent to which fertilizer intended for government subsidies leaks out of the government channel and is resold as commercial fertilizer.
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