The Impact of Fertilizer Subsidies on National Fertilizer Use: An Example from Malawi

Jacob Ricker-Gilbert () and Thomas Jayne ()

No 6464, 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: This paper examines the impact of government funded fertilizer subsidize on national level fertilizer use. We use panel data to investigate how the 2006/07 fertilizer subsidy program in Malawi impacted farmers' decisions to purchase commercial fertilizer. Using a fixed effects estimator to control for time invariant unobservables, we find that when farmers' ability to acquire subsidized fertilizer is treated as exogenous, it has a significant negative impact on commercial fertilizer purchases. We also find that wealth and social networks have a significantly positive impact on who receives subsidized fertilizer. We then use instrumental variables to control for the endogeneity of subsidized fertilizer acquisition affecting commercial purchases. Using a fixed effects estimator on this model demonstrates that acquiring subsidized fertilizer does not have a significant impact on commercial purchases.

Keywords: Agricultural and Food Policy; Crop Production/Industries (search for similar items in EconPapers)
Pages: 22
Date: 2008
New Economics Papers: this item is included in nep-agr
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea08:6464

DOI: 10.22004/ag.econ.6464

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