Fertilizer subsidies and how targeting conditions crowding in/out: An assessment of smallholder fertilizer demand in Tanzania

Abstract

We use panel data of smallholder farm households from Tanzania to empirically assess a large- scale fertilizer subsidy program in Tanzania with respect to its ability to meet its stated targeting criteria and the effect of subsidy receipt on both smallholder commercial fertilizer demand and total fertilizer use. We find that the majority of subsidy recipients met the targeting criteria in practice in regards to area cultivated to maize and that few of them had used inorganic fertilizer on maize or rice in the previous five years. However, we also find that depending on the year, between 25 to 37% of households receiving a fertilizer voucher did not use it, implying that these households did not gain the experience using fertilizer on maize or rice as envisioned by NAIVS