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Repeated Access and Impacts of the Farm Input Subsidy Programme in Malawi

Chirwa, Ephraim and Matita, Mirriam and Mvula, Peter and Dorward, Andrew (2013) Repeated Access and Impacts of the Farm Input Subsidy Programme in Malawi. Future Agricultures Consortium.

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Abstract

This paper analyses the impacts of the Farm Input Subsidy Programme (FISP) using a balanced four-year panel of 461 households from 2004/5, 2006/7, 2008/9 and 2010/11 agricultural seasons. We find evidence of economy wide and input market effects of the subsidy programme. The economy-wide effects of the subsidy programme are strong particularly due to lower maize prices and increased ganyu wage rates. The economy-wide effects of the subsidy which arise from higher ganyu wage rates, reduced time spent on ganyu, availability of maize at local level and lower prices of maize have enabled poor households to access maize when they run out of their own production. With respect to input market effects, with 2010/11 conditions and quantities of subsidised fertiliser, a 1 percent increase in subsidised fertilisers reduces commercial demand by 0.15 – 0.21 percent. However, using various welfare indicators, we find mixed results on the direct beneficiary household effects of the subsidy programme from panel data analysis and there is no overwhelming evidence on the relationship between repeated access and impacts of the subsidy. The direct beneficiary impacts on food consumption, self-assessed poverty and overall welfare are weak and mixed while there is some statistically significant evidence of positive impacts on primary school enrolment, under-5 illness and shocks. Nonetheless, the impact analysis highlights the challenges of targeting and sharing of subsidy among households, which may have implications on the direct beneficiary impacts and prospects to sustainably graduate from the programme.

Item Type: Monographs (Working Paper)
Additional Information: Future Agricultures Working Paper 65
Keywords: Malawi, agricultural input subsidies; access
SOAS Departments & Centres: Faculty of Law and Social Sciences > School of Finance and Management
Faculty of Law and Social Sciences > School of Finance and Management > Centre for Development, Environment and Policy (CeDEP)
Depositing User: Andrew Dorward
Date Deposited: 13 Aug 2013 10:49
URI: http://eprints.soas.ac.uk/id/eprint/16863

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