Fertilizer Subsidies and the Role of Targeting in Crowding out: Evidence from Kenya

April 2, 2018 - Author: and

Fertilizer Subsidies and the Role of Targeting in Crowding out: Evidence from Kenya
David L. Mather & Thomas S. Jayne, Food Security, April 2018, Volume 10, Issue 2, pp 397–417
https://doi.org/10.1007/s12571-018-0773-8


ABSTRACT
The impact of input subsidy programs depends on the extent to which they increase fertilizer use. We used panel data of smallholder farm households from Kenya to analyse the targeting criteria of two fertilizer subsidy programs in Kenya and how these targeting criteria affected farmers’ commercial demand for fertilizer and total fertilizer use. We found that every kilogram of subsidized fertilizer allocated to farmers reduced the quantity of commercial fertilizer purchased by 0.40 kg, a crowding-out effect that is double those found recently in Malawi and Zambia. The large magnitude of crowding out is driven by the fact that neither subsidy program focused on reaching households that had not previously been purchasing commercial fertilizer. There is little evidence that these programs systematically focused on relatively poor households either. The programs crowded out commercial fertilizer use most severely in medium/high potential zones (relative to low), and among households in the upper half of landholding/asset distributions (relative to the lower half). Different targeting criteria could substantially increase the contribution of these subsidy programs to total fertilizer use and hence to national food production and food security.

Keywords: Africa, Kenya, Fertilizer subsidy, Smallholder agriculture

 

Tags: c4a, fsg peer reviewed publications, fsp peer reviewed publications, gisaia, input use and market development, kenya


Related Topic Areas

Kenya, C4a


Authors

David Mather

David Mather
517-449-9694
matherda@msu.edu

Thomas Jayne

Thomas Jayne
517-432-9802
jayne@msu.edu


For more information visit:

Food Security Group
Feed the Future Innovation Lab for Food Security Policy

Michigan State University Michigan State University Close Menu button Menu and Search button Open Close