IDEAS home Printed from https://ideas.repec.org/p/fpr/ifprid/1605.html
   My bibliography  Save this paper

Can better targeting improve the effectiveness of Ghana's Fertilizer Subsidy Program? Lessons from Ghana and other countries in Africa south of the Sahara

Author

Listed:
  • Houssou, Nazaire
  • Andam, Kwaw S.
  • Collins, Asante-Addo

Abstract

Despite improvements to the implementation regime of Ghana’s fertilizer subsidy program, this paper shows that considerable challenges remain in ensuring that the subsidy is targeted to farmers who need fertilizer the most. Currently, larger-scale and wealthier farmers are the main beneficiaries of subsidized fertilizer even though the stated goal is to target smallholder farmers with fertilizer subsidies. The experience of other African countries suggests that the effectiveness of fertilizer subsidies can improve with effective targeting of resource-poor smallholders. However, targeting smallholder farmers entails significant transaction costs and may even be infeasible in some cases. Faced with such challenges, Ghanaian policy makers must ponder the question of how to improve the targeting of input subsidy programs in the country. Further research is needed to identify more cost-effective approaches for achieving the goal of targeting.

Suggested Citation

  • Houssou, Nazaire & Andam, Kwaw S. & Collins, Asante-Addo, 2017. "Can better targeting improve the effectiveness of Ghana's Fertilizer Subsidy Program? Lessons from Ghana and other countries in Africa south of the Sahara," IFPRI discussion papers 1605, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:ifprid:1605
    as

    Download full text from publisher

    File URL: http://cdm15738.contentdm.oclc.org/utils/getfile/collection/p15738coll2/id/131068/filename/131279.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jayne, T. S. & Govereh, J. & Wanzala, M. & Demeke, M., 2003. "Fertilizer market development: a comparative analysis of Ethiopia, Kenya, and Zambia," Food Policy, Elsevier, vol. 28(4), pages 293-316, August.
    2. Druilhe, Zoé & Barreiro-Hurlé, Jesús, 2012. "Fertilizer subsidies in sub-Saharan Africa," ESA Working Papers 288997, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    3. Chibwana, Christopher & Fisher, Monica & Shively, Gerald, 2012. "Cropland Allocation Effects of Agricultural Input Subsidies in Malawi," World Development, Elsevier, vol. 40(1), pages 124-133.
    4. Houssou, Nazaire & Zeller, Manfred, 2011. "To target or not to target? The costs, benefits, and impacts of indicator-based targeting," Food Policy, Elsevier, vol. 36(5), pages 626-636, October.
    5. Sheahan, Megan & Olwande, John & Kirimi, Lilian & Jayne, Thom S., 2014. "Targeting of Subsidized Fertilizer Under Kenya's National Accelerated Agricultural Input Access Program (NAAIAP)," Working Papers 202590, Egerton University, Tegemeo Institute of Agricultural Policy and Development.
    6. Shenggen Fan & Xiaobo Zhang, 2008. "Public Expenditure, Growth and Poverty Reduction in Rural Uganda," African Development Review, African Development Bank, vol. 20(3), pages 466-496.
    7. Resnick, Danielle & Mather, David, 2016. "Agricultural inputs policy under macroeconomic uncertainty: Applying the kaleidoscope model to Ghana’s Fertilizer Subsidy Programme (2008–2015):," IFPRI discussion papers 1551, International Food Policy Research Institute (IFPRI).
    8. Resnick, Danielle & Mather, David, 2016. "Agricultural Inputs Policy Under Macroeconomic Uncertainty: Applying The Kaleidoscope Model To Ghana’S Fertilizer Subsidy Programme (2008–2015)," Feed the Future Innovation Lab for Food Security Policy Research Papers 259059, Michigan State University, Department of Agricultural, Food, and Resource Economics, Feed the Future Innovation Lab for Food Security (FSP).
    9. Minde, I., 2008. "Promoting fertilizer use in Africa: current issues and empirical evidence from Malawi, Zambia and Kenya," IWMI Working Papers H042064, International Water Management Institute.
    10. Lenis Saweda O. Liverpool-Tasie & Hiroyuki Takeshima, 2013. "Input promotion within a complex subsector: fertilizer in Nigeria," Agricultural Economics, International Association of Agricultural Economists, vol. 44(6), pages 581-594, November.
    11. Bumb, Balu L. & Johnson, Michael E. & Fuentes, Porfirio A., 2011. "Policy options for improving regional fertilizer markets in West Africa:," IFPRI discussion papers 1084, International Food Policy Research Institute (IFPRI).
    12. Shenggen Fan & Ashok Gulati & Sukhadeo Thorat, 2008. "Investment, subsidies, and pro‐poor growth in rural India," Agricultural Economics, International Association of Agricultural Economists, vol. 39(2), pages 163-170, September.
    13. Nicole M. Mason & Thomas S. Jayne, 2014. "Fertiliser subsidies and smallholder commercial fertiliser purchases: crowding out, leakage, and policy implications for Zambia," Journal of Agricultural Economics, Wiley Blackwell, vol. 65(2), pages 527-528, June.
    14. Minde, Isaac J. & Jayne, Thomas S. & Crawford, Eric W. & Ariga, Joshua & Jones, Govereh, 2008. "Promoting Fertilizer Use in Africa: Current Issues and Empirical Evidence from Malawi, Zambia, and Kenya," Food Security International Development Policy Syntheses 54509, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    15. Chirwa, Ephraim & Dorward, Andrew, 2013. "Agricultural Input Subsidies: The Recent Malawi Experience," OUP Catalogue, Oxford University Press, number 9780199683529.
    16. Ricker-Gilbert, Jacob & Jayne, Thomas S., 2011. "What are the Enduring Effects of Fertilizer Subsidy Programs on Recipient Farm Households? Evidence from Malawi," Staff Paper Series 109593, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    17. Chapoto, Antony & Ragasa, Catherine, 2013. "Moving in the right direction? Maize productivity and fertilizer use and use intensity in Ghana:," IFPRI discussion papers 1314, International Food Policy Research Institute (IFPRI).
    18. Mason, Nicole M. & Tembo, Solomon T., 2014. "Do input subsidies reduce poverty among smallholder farm households? Evidence from Zambia," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170617, Agricultural and Applied Economics Association.
    19. Vondolia, Godwin Kofi & Eggert, Håkan & Stage, Jesper, "undated". "Nudging Boserup? The Impact of Fertilizer Subsidies on Investment in Soil and Water Conservation," Discussion Papers dp-12-08-efd, Resources For the Future.
    20. Blessings Chinsinga & Colin Poulton, 2014. "Beyond Technocratic Debates: The Significance and Transience of Political Incentives in the Malawi Farm Input Subsidy Programme (FISP)," Development Policy Review, Overseas Development Institute, vol. 32(s2), pages 123-150, September.
    21. repec:wbk:wbpubs:13081 is not listed on IDEAS
    22. Quentin Wodon, 2012. "Improving the Targeting of Social Programs in Ghana," World Bank Publications - Books, The World Bank Group, number 13082.
    23. Takeshima, Hiroyuki & Liverpool-Tasie, Lenis Saweda O., 2013. "Fertilizer Subsidy, Political Influence and Local Food Prices in Sub-Saharan Africa: Evidence from Nigeria," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150327, Agricultural and Applied Economics Association.
    24. T.S. Jayne & David Mather & Nicole Mason & Jacob Ricker-Gilbert, 2013. "How do fertilizer subsidy programs affect total fertilizer use in sub-Saharan Africa? Crowding out, diversion, and benefit/cost assessments," Agricultural Economics, International Association of Agricultural Economists, vol. 44(6), pages 687-703, November.
    25. Rodney Lunduka & Jacob Ricker-Gilbert & Monica Fisher, 2013. "What are the farm-level impacts of Malawi's farm input subsidy program? A critical review," Agricultural Economics, International Association of Agricultural Economists, vol. 44(6), pages 563-579, November.
    26. Chibwana, Christopher & Shively, Gerald & Fisher, Monica & Jumbe, Charles & Masters, William A., 2014. "Measuring the impacts of Malawi’s farm input subsidy programme," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 9(2), pages 1-16, April.
    27. Kelly, Valerie A. & Crawford, Eric W. & Ricker-Gilbert, Jacob, 2011. "The New Generation of African Fertilizer Subsidies: Panacea or Pandora’s Box?," Food Security International Development Policy Syntheses 107460, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    28. Banful, Afua Branoah, 2009. "Operational details of the 2008 fertilizer subsidy in Ghana: Preliminary report," GSSP working papers 18, International Food Policy Research Institute (IFPRI).
    29. Mkwara, Bentry, 2013. "To what extent do fertiliser subsidies improve household income and reduce poverty? The case of Malawi," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 8(4), pages 1-12, October.
    30. Mateusz Filipski & J. Edward Taylor, 2012. "A simulation impact evaluation of rural income transfers in Malawi and Ghana," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 4(1), pages 109-129, March.
    31. Liverpool-Tasie, Lenis Saweda & Salau, Sheu, 2013. "Spillover effects of targeted subsidies: An assessment of fertilizer and improved seed use in Nigeria," IFPRI discussion papers 1260, International Food Policy Research Institute (IFPRI).
    32. Liverpool-Tasie, Lenis Saweda, 2012. "Targeted Subsidies and Private Market Participation: An Assessment of Fertilizer Demand in Nigeria:," IFPRI discussion papers 1194, International Food Policy Research Institute (IFPRI).
    33. Liverpool-Tasie, Saweda L.O. & Banful, Afua Branoah & Olaniyan, Babatunde, 2010. "Assessment of the 2009 fertilizer voucher program in Kano and Taraba, Nigeria:," NSSP working papers 17, International Food Policy Research Institute (IFPRI).
    34. International Monetary Fund, 2015. "Ghana: Request for a Three-Year Arrangement Under the Extended Credit Facility," IMF Staff Country Reports 2015/103, International Monetary Fund.
    35. Olomola, Aderibigbe S., 2015. "Driving agricultural transformation with the power of information and communication technology: The performance of Nigeria’s growth enhancement support scheme:," NSSP working papers 30, International Food Policy Research Institute (IFPRI).
    36. Michael Morris & Valerie A. Kelly & Ron J. Kopicki & Derek Byerlee, 2007. "Fertilizer Use in African Agriculture : Lessons Learned and Good Practice Guidelines," World Bank Publications - Books, The World Bank Group, number 6650.
    37. Zhiying Xu & William J. Burke & Thomas S. Jayne & Jones Govereh, 2009. "Do input subsidy programs “crowd in” or “crowd out” commercial market development? Modeling fertilizer demand in a two‐channel marketing system," Agricultural Economics, International Association of Agricultural Economists, vol. 40(1), pages 79-94, January.
    38. T.S. Jayne & Shahidur Rashid, 2013. "Input subsidy programs in sub-Saharan Africa: a synthesis of recent evidence," Agricultural Economics, International Association of Agricultural Economists, vol. 44(6), pages 547-562, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kyle, Jordan & Resnick, Danielle & Karkee, Madhab, 2017. "Improving the equity and effectiveness of Nepal’s fertilizer subsidy program :," IFPRI discussion papers 1685, International Food Policy Research Institute (IFPRI).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Houssou, Nazaire & Asante-Addo, Collins & Andam, Kwaw S., 2017. "Improving the targeting of fertilizer subsidy programs in Africa south of the Sahara: Perspectives from the Ghanaian experience," IFPRI discussion papers 1622, International Food Policy Research Institute (IFPRI).
    3. Jayne, T.S. & Mason, Nicole M. & Burke, William J. & Ariga, Joshua, 2016. "Agricultural Input Subsidy Programs in Africa: An Assessment of Recent Evidence," Food Security International Development Working Papers 245892, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    4. Holden, Stein T., 2018. "The Economics of Fertilizer Subsidies," CLTS Working Papers 9/18, Norwegian University of Life Sciences, Centre for Land Tenure Studies, revised 16 Oct 2019.
    5. Van Asselt, Joanna & Grogan, Kelly A., 2020. "Do Fertilizer Subsidies Improve Soil Quality: Myopic vs. Dynamic Analysis of Smallholder Farmers in Ghana," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304546, Agricultural and Applied Economics Association.
    6. Harou, Aurélie P., 2018. "Unraveling the effect of targeted input subsidies on dietary diversity in household consumption and child nutrition: The case of Malawi," World Development, Elsevier, vol. 106(C), pages 124-135.
    7. 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.
    8. Zinnbauer, Maximilian & Mockshell, Jonathan & Zeller, Manfred, 2018. "Effects if Fertilizer Subsidies in Zambia: A Literature Review," MPRA Paper 84125, University Library of Munich, Germany.
    9. Tebogo B. Seleka, 2022. "Old wine in a new bottle? Impact of the ISPAAD input subsidy program on the subsistence economy in Botswana," Review of Development Economics, Wiley Blackwell, vol. 26(1), pages 298-322, February.
    10. Channing Arndt & Karl Pauw & James Thurlow, 2016. "The Economy-wide Impacts and Risks of Malawi's Farm Input Subsidy Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(3), pages 962-980.
    11. 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?," Food Security Collaborative Working Papers 232090, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    12. Mason, Nicole M. & Tembo, Solomon T., 2015. "Do Input Subsidy Programs Raise Incomes and Reduce Poverty among Smallholder Farm Households? Evidence from Zambia," Food Security Collaborative Working Papers 198702, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    13. Jayne, T.S. & Sitko, Nicholas J. & Mason, Nicole M., 2017. "Can Input Subsidy Programs Contribute To Climate Smart Agriculture?," Feed the Future Innovation Lab for Food Security Policy Research Papers 270626, Michigan State University, Department of Agricultural, Food, and Resource Economics, Feed the Future Innovation Lab for Food Security (FSP).
    14. Sibande, Lonester & Bailey, Alastair & Davidova, Sophia, 2015. "The impact of farm input subsidies on household welfare in Malawi," 2015 Conference, August 9-14, 2015, Milan, Italy 212830, International Association of Agricultural Economists.
    15. 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.
    16. Nicole M. Mason & Thomas S. Jayne & Nicolas van de Walle, 2017. "The Political Economy of Fertilizer Subsidy Programs in Africa: Evidence from Zambia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 99(3), pages 705-731.
    17. Wossen, Tesfamicheal & Abdoulaye, Tahirou & Alene, Arega & Feleke, Shiferaw & Ricker-Gilbert, Jacob & Manyong, Victor & Awotide, Bola Amoke, 2017. "Productivity and Welfare Effects of Nigeria's e-Voucher-Based Input Subsidy Program," World Development, Elsevier, vol. 97(C), pages 251-265.
    18. 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.
    19. Liverpool-Tasie, Lenis Saweda O. & Jayne, Thomas & Muyanga, Milu & Sanou, Awa, 2017. "Are African Farmers Experiencing Improved Incentives To Use Fertilizer?," Feed the Future Innovation Lab for Food Security Policy Research Papers 270632, Michigan State University, Department of Agricultural, Food, and Resource Economics, Feed the Future Innovation Lab for Food Security (FSP).
    20. Channing Arndt & Karl Pauw & James Thurlow, 2016. "The Economy-wide Impacts and Risks of Malawi's Farm Input Subsidy Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(3), pages 962-980.

    More about this item

    Keywords

    GHANA; WEST AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; smallholders; fertilizers; farm inputs; subsidies; resources; inputs; targeting; fertilizer subsidy; smallholder farmers; SSA;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fpr:ifprid:1605. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/ifprius.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (email available below). General contact details of provider: https://edirc.repec.org/data/ifprius.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.