IDEAS home Printed from https://ideas.repec.org/p/hhs/nlsclt/2013_006.html
   My bibliography  Save this paper

Input subsidies and demand for improved maize: Relative prices and household heterogeneity matter!

Author

Listed:
  • Holden, Stein

    () (Centre for Land Tenure Studies, Norwegian University of Life Sciences)

Abstract

This study uses simple non-separable farm household models calibrated to household, market, farming and policy context conditions in Central and Southern Malawi. The models are used to simulate how household characteristics, design and access to input subsidies affect the demand for improved maize seeds; how increasing land scarcity affects the cropping system and demand for improved maize; and how access to improved maize seeds affects household welfare with varying access to input subsidies. The model simulations demonstrate that a) there is a high risk that access to subsidized improved maize seeds can crowd out commercial demand for improved maize seeds but the effect is very sensitive to household characteristics, market characteristics and relative prices; b) increasing land scarcity increases the demand for improved maize seeds and improved maize facilitates intensification among others through intercropping of maize with legumes such as beans and pigeon peas; c) the welfare effects depend on households’ ability to utilize the potential of the improved varieties by combining them with complementary inputs.

Suggested Citation

  • Holden, Stein, 2013. "Input subsidies and demand for improved maize: Relative prices and household heterogeneity matter!," CLTS Working Papers 6/13, Norwegian University of Life Sciences, Centre for Land Tenure Studies.
  • Handle: RePEc:hhs:nlsclt:2013_006
    as

    Download full text from publisher

    File URL: http://www.umb.no/statisk/clts/papers/clts_wp06_2013.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Pauw, Karl & Thurlow, James, 2011. "Agricultural growth, poverty, and nutrition in Tanzania," Food Policy, Elsevier, vol. 36(6), pages 795-804.
    2. Alwang, Jeffrey & Siegel, P. B., 1999. "Labor Shortages on Small Landholdings in Malawi: Implications for Policy Reforms," World Development, Elsevier, vol. 27(8), pages 1461-1475, August.
    3. Zeller, Manfred & Diagne, Aliou & Mataya, Charles, 1998. "Market access by smallholder farmers in Malawi: implications for technology adoption, agricultural productivity and crop income," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 19(1-2), September.
    4. Ricker-Gilbert, Jacob & Jayne, Thomas S., 2009. "Do Fertilizer Subsidies Affect the Demand for Commercial Fertilizer? An Example from Malawi," 2009 Conference, August 16-22, 2009, Beijing, China 51606, International Association of Agricultural Economists.
    5. Alwang, Jeffrey & Siegel, Paul B., 2003. "Measuring the impacts of agricultural research on poverty reduction," Agricultural Economics, Blackwell, vol. 29(1), pages 1-14, July.
    6. Mason, Nicole M. & Ricker-Gilbert, Jacob, 2013. "Disrupting Demand for Commercial Seed: Input Subsidies in Malawi and Zambia," World Development, Elsevier, vol. 45(C), pages 75-91.
    7. Stein Holden & Rodney Lunduka, 2012. "Do fertilizer subsidies crowd out organic manures? The case of Malawi," Agricultural Economics, International Association of Agricultural Economists, vol. 43(3), pages 303-314, May.
    8. 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), April.
    9. Holden, Stein T., 1993. "Peasant household modelling: Farming systems evolution and sustainability in northern Zambia," Agricultural Economics, Blackwell, vol. 9(3), pages 241-267, September.
    10. de Janvry, Alain & Fafchamps, Marcel & Sadoulet, Elisabeth, 1991. "Peasant Household Behaviour with Missing Markets: Some Paradoxes Explained," Economic Journal, Royal Economic Society, vol. 101(409), pages 1400-1417, November.
    11. Zeller, Manfred & Diagne, Aliou & Mataya, Charles, 1998. "Market access by smallholder farmers in Malawi: implications for technology adoption, agricultural productivity and crop income," Agricultural Economics, Blackwell, vol. 19(1-2), pages 219-229, September.
    12. Jacob Ricker-Gilbert & Thomas S. Jayne & Ephraim Chirwa, 2010. "Subsidies and Crowding Out: A Double-Hurdle Model of Fertilizer Demand in Malawi," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(1), pages 26-42.
    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. Holden, Stein, 2014. "Agricultural Household Models for Malawi:Household Heterogeneity, Market Characteristics, Agricultural Productivity, Input Subsidies, and Price Shocks. A Baseline Report," CLTS Working Papers 5/14, Norwegian University of Life Sciences, Centre for Land Tenure Studies.

    More about this item

    Keywords

    Improved maize varieties; input subsidies; impact on seed demand; land scarcity; intensification; cash constraints; household welfare;

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

    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:hhs:nlsclt:2013_006. 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: (Kateryna Krutskykh). General contact details of provider: http://edirc.repec.org/data/ioumbno.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 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.

    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.