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Chirwa, Ephraim, Dorward, Andrew and Matita, Mirriam (2011) Conceptualising Graduation from Agricultural Input Subsidies in Malawi. Brighton: Future Agricultures Consortium.

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Abstract

The government of Malawi has been implementing agricultural input subsidies since 2005/06 as an intervention aimed at improving food security among resource poor smallholder farmers. Although the issue of graduation is not articulated in the design of the programme, this study investigates the determinants of changes in the demand for commercial fertilizers in the presence of the subsidy programme. The increase in purchase of commercial fertilizers by subsidized households may indicate prospects of graduation from the subsidy programme in future. Using panel data between the 2004/05 and 2008/09 seasons, we find that 6 percent of households that did not purchase commercial fertilizer in 2004/05 could afford to purchase fertilizers commercially in subsidy years. Relative to those that never purchase fertilizers, these households tend to have higher per capita expenditure and higher values of durable assets. The econometric results show that initial conditions matter, with initial household size, per capita expenditure, agricultural output, and existence of business enterprise all playing a positive role in the changes in demand for commercial fertilizer. We also find that commercial fertilizers decreases with initial commercial fertilizers, land holdings and existence of ADMARC. The results suggest that the poor may have low prospects of graduation and less involvement of ADMARC and greater participation of the private sector can help in improving the ‘potential graduation conditions’.

Item Type: Monographs and Working Papers (Working Paper)
Keywords: Malawi, Agricultural input subsidies, graduation
SOAS Departments & Centres: Legacy Departments > Faculty of Law and Social Sciences > School of Finance and Management
Legacy Departments > Faculty of Law and Social Sciences > School of Finance and Management > Centre for Development, Environment and Policy (CeDEP)
Date Deposited: 16 Jul 2013 08:50
URI: https://eprints.soas.ac.uk/id/eprint/16726

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