Can Better Targeting Improve the Effectiveness of Ghana's Fertilizer Subsidy Program? Lessons from Ghana and Other Countries in Africa South of the Sahara

36 Pages Posted: 2 Mar 2017

See all articles by Nazaire Houssou

Nazaire Houssou

International Food Policy Research Institute (IFPRI)

Kwaw Andam

International Food Policy Research Institute (IFPRI)

Collins Asante-Addo

International Food Policy Research Institute (IFPRI); Johann Heinrich von Thünen Institute - Department for Market Analysis, Students

Date Written: February 10, 2017

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.

Keywords: GHANA, WEST AFRICA, AFRICA SOUTH OF SAHARA, AFRICA, smallholders, fertilizers, farm inputs, subsidies, resources, inputs. targeting, fertilizer subsidy, smallholder farmers, SSA

Suggested Citation

Houssou, Nazaire and Andam, Kwaw and Asante-Addo, Collins, Can Better Targeting Improve the Effectiveness of Ghana's Fertilizer Subsidy Program? Lessons from Ghana and Other Countries in Africa South of the Sahara (February 10, 2017). IFPRI Discussion Paper 1605, Available at SSRN: https://ssrn.com/abstract=2926075

Nazaire Houssou (Contact Author)

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

HOME PAGE: http://www.ifpri.org

Kwaw Andam

International Food Policy Research Institute (IFPRI) ( email )

2033 K Street, NW
Washington, DC 20006
United States

Collins Asante-Addo

International Food Policy Research Institute (IFPRI) ( email )

Johann Heinrich von Thünen Institute - Department for Market Analysis, Students ( email )

Braunschweig
Germany

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