Input Subsidies, Cash Constraints and Timing of Input Supply:-Experimental Evidence from Malawi

Abstract

The study investigated the demand for fertilizer among rural farm households in Malawi that have been exposed to high fertilizer subsidy levels. Subsidies and cash constraints may limit their demand but their cash constraint may be less severe at harvest time than at planting time when they normally get their inputs. Three different experiments were used to assess the demand for fertilizer at harvest time and at planting time, to elicit farm gate shadow prices for fertilizer and to assess the gap between WTA and WTP prices for a standard input package The experiments demonstrated significant effects of timing and of cash constraints.