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Effects if Fertilizer Subsidies in Zambia: A Literature Review

Maximilian Zinnbauer, Jonathan Mockshell and Manfred Zeller

MPRA Paper from University Library of Munich, Germany

Abstract: Fertilizer subsidies are again part of the policy agenda in Sub-Saharan Africa since the 1990s. Governments spend large shares of their agricultural budgets and their means to fight poverty on such programmes, but economists formulated doubts whether these investments will pay off. This paper reviews the existing literature on effects of fertilizer subsidies in Zambia, presents an analytical framework on input subsidies and compares the empirical evidence to the goals of the fertilizer subsidy. Major findings are that the subsidy programme has failed to substantially reduce poverty and to improve food security via decreased maize prices. Farm incomes have increased moderately, but the overall costs exceed the benefits by far. Reasons for this are identified as poor targeting, diversion and leakage. The paper concludes with a review of policy recommendations, mainly focused on improved targeting and diversification away from pure fertilizer subsidies.

Keywords: fertilisier subsidies; input subsidies; Zambia; food security (search for similar items in EconPapers)
JEL-codes: Q01 Q12 Q13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-afr and nep-agr
Date: 2018-01-25
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