Does Late Delivery of Subsidized Fertilizer Affect Smallholder Maize Productivity and Production

Abstract

Farm input subsidy programs have once again become a popular policy tool that many African governments use to improve agricultural productivity and address rural poverty. Zambia is one of the countries of Sub-Saharan Africa (SSA) that over the past decade has devoted a considerable share of its agricultural budget to the Farmer Input Support Program (FISP). Input subsidy programs have received considerable research attention in recent years. Unfortunately, the issue of late delivery of inputs under government subsidy programs has received little or no research attention even though it has been a longstanding problem in many countries, including Zambia. This paper examined the effects of late delivery of fertilizer on technical efficiency of smallholder maize producers and on foregone national maize output in Zambia. Using cross-sectional household survey data for the 2010/11 agricultural season, a plot-level maize yield response model was estimated using a Stochastic Frontier Approach (SFA) while controlling for the endogeneity of whether farmers received their FISP fertilizer on time. Results indicate that late delivery of fertilizer reduces technical efficiency and maize yield by 4.2%. The estimated results are then extrapolated to quantify the loss in national maize output. The foregone maize output due to late delivery of fertilizer in the 2010/11 farming season was 84,924 metric tons. When valued at the government’s maize purchase price, the forgone income is equivalent to USD 21.2 million. Furthermore, by limiting the sample to only households that obtained fertilizer from FISP, we found that households with large landholding size and high value of productive assets were more likely to receive fertilizer on time, ceteris paribus. It was also found that households with family connections with village headmen/chiefs were more likely to receive fertilizer on time compared to other households.