AGEC 640 – Ag Development & Policy Measuring Impacts October 30 th , 2014. Today: Focus on Malawi’s subsidy program Readings: Chibwana, C. et al. (2014) “Measuring the Impacts of Malawi’s Farm Input Subsidy Program.” Forthcoming in African Journal of Agricultural and Resource Economics .
Today: Focus on Malawi’s subsidy program
Chibwana, C. et al. (2014) “Measuring the Impacts of Malawi’s Farm Input Subsidy Program.” Forthcoming inAfrican Journal of Agricultural and Resource Economics.
Fisher, M. and G. Shively (2005) “Can Income Programs Reduce Tropical Forest Pressure? Income Shocks and Forest Use in Malawi.” World Development 33(7): 1115–1128.
S=MC - σ
(therefore popular with politicians)
At+1 = At + f(At, Xt) – ct
Ministry of Agriculture
Village heads and village development committees
Stated Targets: FHOH, residents, vulnerable
1. Who benefited from the subsidy program?
2. Did the program boost smallholder’s use of fertilizer and maize output?
3. Did the participation influence crop choice?
4. [ additionally: what effect (if any) did the subsidy have on area expansion and forests? ]
21% of households in rural Malawi are female-headed.
13% of all coupon recipients in sample were female-headed
Participation cannot be considered exogenous…
For women, the subsidy represented about 3/4 of total fertilizer used.
For the poor, the subsidy represented more than two-thirds of total fertilizer used.
(cf. Jayne – member of parliament matters!)
Marked points on the graph correspond to the following fertilizer-yield combinations:A [114 kg/ha, 1302 kg/ha]
B [165 kg/ha, 1245 kg/ha]
C [136 kg/ha, 1373 kg/ha]
D [175 kg/ha, 1477 kg/ha]
What is the total maize output gain associated with coupon receipt?
change in yield x ( 1 + change in maize area )
≈ 456 kg on average
about half of the gain is from seed, half from fertilizer
But... maize area comes at the expense of other crops displaced, and the value of the output of these other crops constitute about 50% of the average gain.
Average value of SPS ≈ 450 Mk,
so ≈ 1062 fewer hours, or drop of more than 50%.