Input Subsidies in Sub-Saharan Africa Regain Favor
19 November 2013 
Groundnut farmer in Malawi
Photo credit: Flickr user Twin and Twin Trading Images
Creative Commons License
Input subsidy programs have regained support as a major pillar of agricultural development strategies in Africa, according to a new article appearing in the journal Agricultural Economics.
Ten African countries spent more than $1 billion on input subsidy programs in 2011, amounting to nearly 29% of their public expenditures on agriculture, according to the article’s authors T.S. Jayne of the Department of Agricultural, Food, and Resource Economics at Michigan State University, and Shahidur Rashid, senior research fellow at the International Food Policy Research Institute.
Jayne and Rashid reviewed micro-level research on input subsidy programs since the mid-2000s. The programs, which were a backbone of 1960s and 1970s international donor agendas, are likely here to stay despite their flaws, the authors wrote.
The study says that findings from other developing areas with a higher proportion of crop area under irrigation and with lower fertilizer prices — factors that should provide higher returns to fertilizer subsidies than in Africa — indicate that at least a partial reallocation of expenditures from fertilizer subsidies to R&D and infrastructure would provide higher returns to agricultural growth and poverty reduction. “However, because input subsidy programs enable governments to demonstrate tangible support to constituents, they are likely to remain on the African landscape for the foreseeable future,” the authors wrote.
The study identifies ways in which benefits can be enhanced through changes in implementation modalities and complementary investments within a holistic agricultural intensification strategy.
Among the most important of these, according to the study, are efforts to reduce the crowding out of commercial fertilizer distribution systems and programs to improve soil fertility to enable farmers to use fertilizer more efficiently, however, “The challenges associated with achieving these gains are likely to be formidable,” the authors said.
See the report here.
Source: Agricultural Economics
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