Effect of Seed and Fertilizer Subsidies on the Technical Efficiency of Rice Farmers in Senegal

Abstract

The aim of this study was to analyze the effect of seed and fertilizer subsidies (NPK and urea) on the technical efficiency of rice farmers in Senegal. Using data from the Annual Agricultural Survey (EAA) of the Directorate of Analysis, Forecasting and Agricultural Statistics of Senegal (DAPSA), the results of Stochastic Frontier Analysis (SFA) revealed that rice farmers in Senegal have on average a technical efficiency level of 0.545. This suggests that they could increase their current production by 45.5% while using the same level of inputs. Estimation of an SFA model for technical inefficiency revealed that seed and urea subsidies have a significant effect on reducing technical inefficiency. A farmer using subsidized seed saw a reduction in technical inefficiency level by 10.5% and using urea was associated with a 5.1% decrease in inefficiency. In contrast, the model showed no association between the use of subsidized NPK or the use of herbicides and technical inefficiency. And use of organic fertilizer was estimated to worsen technical inefficiency by 4.4% (perhaps reflecting greater reliance on lower-cost inputs among less productive farm households in Senegal). With regard to socio-demographic factors, the results further revealed older respondents experienced more severe technical inefficiency, and that women on average were 9.6% more inefficient than men. These barriers to improved efficiency among older farmers and women suggest targeted supports may be necessary alongside general subsidy programming.