Measuring the Impacts of Malawi's Farm Input Subsidy Program
38 Pages Posted: 11 Jun 2011
Date Written: September 10, 2010
We measure the impacts of Malawi’s 2009 Farm Input Subsidy Program (FISP) on fertilizer use and maize yields in central and southern Malawi. Using three rounds of panel data and instrumental variables regression strategies to control for endogenous selection into the subsidy program we find positive and statistically significant correlations between participation in the FISP and fertilizer use intensity. Fertilizer use is found to be higher among households that plant improved maize varieties than among those that plant traditional varieties. Results are broadly robust to the inclusion of previous fertilizer intensity to control for household-specific differences in fertilizer use. We combine these results with those from a maize production function to calculate program-generated changes in average maize availability, accounting for estimated subsidy-induced changes in crop area. Our findings have implications for the way input subsidy programs are designed and implemented.
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