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The Economy-wide Impacts and Risks of Malawi's Farm Input Subsidy Program

Channing Arndt (), Karl Pauw and James Thurlow

No 160671, 2013 Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia from African Association of Agricultural Economists (AAAE)

Abstract: Program evaluations often overlook economywide spillovers and constraints. We estimate the impact of Malawi’s Farm Input Subsidy Program using a computable general equilibrium model informed by household-level studies. We find that indirect benefits account for about two-fifths of total benefits, underscoring the complementarity between economywide and survey-based program evaluations. Benefit-cost ratios fall when domestic taxes finance the program or when real fertilizer prices rise. Abstracting from very strong weather events, we find that Malawi’s program potentially generates double-dividends in the form of higher and more drought-resilient yields. Overall, using parameters similar to survey-based evaluations, we identify mostly positive economywide returns over a range of program designs and risks. However, similar to earlier evaluations, benefit-cost ratios depend strongly on assumptions about fertilizer dose-response rates; and the dose-response rates from ex post survey-based studies generate benefit-cost ratios less than one even when indirect program benefits are included.

Keywords: Agricultural and Food Policy; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 25
Date: 2013
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Related works:
Journal Article: The Economy-wide Impacts and Risks of Malawi's Farm Input Subsidy Program (2016) Downloads
Working Paper: The Economywide Impacts and Risks of Malawi’s Farm Input Subsidy Program (2014) Downloads
Working Paper: The Economywide Impacts and Risks of Malawi's Farm Input Subsidy Programme (2014) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaae13:160671

DOI: 10.22004/ag.econ.160671

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