Input Subsidy Research Articles

Exploring the Constraints and Factors in the Potential Adoption of Conservation Agriculture in Bangladesh

Conservation agriculture (CA) is an alternative technique to conventional resource-intensive farming. It is advocated as a sustainable agricultural production approach for achieving improved land and labor productivity with minimal soil disturbance. Despite its proven benefits and widespread promotion from national and international agencies, the adoption rate of CA is substantially low among the farmers in many developing countries, including Bangladesh. This study explores perceived barriers for CA adoption in relation to farmers’ socioeconomic and demographic characteristics using data collected from 220 farmers who have not adopted CA in Bangladesh. Statistical data analysis reveals the lack of specialized machines required for CA farming as the most critical constraint perceived by the farmers. A lack of knowledge and information is also perceived as a crucial constraint. The results of multiple regression analysis show that formal education, training experience, timely availability of machines, and farm size are significant determinants of these constraints. Making critical machines, knowledge, input subsidies, and local-level extension services widely available for farmers can stimulate CA adoption.

Can homegarden commercialization contribute to food security in Sahel? Case study from northern Ghana

Policymakers and development organizations have widely identified homegardening as an activity that can alleviate global pressure on food production and food security in developing countries. In Sub-Saharan Africa, studies on homegardens have examined species diversity and conservation, as well as factors influencing species composition and landscape management. However, little attention has been given to understanding the relationship between food security and commercialization. Therefore, this study examines for the role of commercialization of homegardens and its potential to contribute to food security in northern areas of Ghana. A mixed sampling technique was employed to identify and interview 120 homegardeners. Probit regression analysis revealed that homegarden size, ownership status, and water availability, together with farmer’s age and gender, were statistically significant factors influencing market orientation. Propensity score matching and endogenous treatment regression showed that a higher degree of market orientation of homegarden produce significantly contributes to the food security of farmers. Gender, educational status, and access to input subsidies influenced the food security situation of the homegardeners. Our findings suggest that government and development agencies should promote and support homegardens as a promising farming practice that enhances rural development, food security and overall livelihood resilience in Sahel region, such as northern Ghana.

Fruitless or Fruitful? Examining Ghana's Agricultural Inputs Subsidy and Household Welfare

ABSTRACTThere are mixed accounts of the impact of government input subsidies on farmers welfare outcomes in the global south with political colorations, which often tend to exaggerate outcomes. Ghana's Planting for Food and Jobs (PFJ) programme phase 1, promised to be revolutionary in attaining the Sustainable Development Goal (SDG)‐2 of ending hunger. However, the programme received criticisms with mixed sentiments within the political circle and policy arena, with scarce evidence in the extant literature. Using cross sectional data collected from 1107 maize farmers, we find that participating in the PFJ increases maize yield by 454.90 kg/ha, gross income by US$ 171.74 and per capita consumption by US$ 0.43. Our findings show that the adoption of only fertilizer increases maize yield significantly by 1609.2 kg/ha, gross maize income by $332, and improves per capita consumption significantly by $1.22. Participating in the PFJ programme is influenced by age, gender, marital status, education, farm size, credit, pests and diseases, market access, farm distance, radio, political affiliation, and the perception of timely supply of seeds and fertilizers. Our results suggest that adopting multiple combinations of packages remain financially viable. The choice of combinations of interventions is significantly influenced by socioeconomic and institutional factors. We suggest that agricultural extension and advisory services target efforts to address structural challenges relating to land ownership, credit access, market access, pests, and diseases to improve welfare outcomes. The study highlights the need to expand and sustain the PFJ programme to have a maximum impact on maize production, income generation, and household consumption.

Input subsidies and the depletion of natural capital: Chinese distant water fishing

Input subsidies and the depletion of natural capital: Chinese distant water fishing

Stakeholders and Farmers’ Preferences Towards Contract Attributes: Evidence from Hybrid Maize Production in Indonesia

The availability of quality seeds is critical to supporting the sustainability of agriculture, which is further reinforced by the success of contract farming between seed companies and partner farmers. To foster a mutually beneficial partnership, it is essential to align the needs of farmers with the facilities and services provided by the company through well-defined contract terms and conditions. This study aims to explore the contract attribute preferences and their importance levels among farmers, growth leaders, and companies using a quantitative approach. A discrete choice experiment utilizing the conditional logit model was employed to investigate the preferences of 170 farmers, while a descriptive analysis was used to outline the preferences of other stakeholders. The findings indicate that farmers prefer written agreements over informal ones, favor shorter contract durations, and demand higher prices. Additionally, farmers showed a marked preference for receiving inputs, incentives, and credits. The preference patterns of stakeholders align with those of farmers regarding agreement form, inputs, price, incentives, and credit, although stakeholders tend to favor contracts with longer durations. Based on the rank-based quotient method, both growth leaders and farmers identified price, input subsidies, incentives, credits, agreement form, and duration as the most important attributes in maize seed partnership contracts, in descending order of importance. Contrarily, the company prioritizes input subsidies over other attributes, including price, duration, credit, incentive, and agreement form. These insights can inform the design of more suitable and effective contracts, thereby fostering sustainable partnership relationships in the future.

Preferences for sustainable intensification: Do agricultural interventions matter? Plot-level evidence from Senegal

Preferences for sustainable intensification: Do agricultural interventions matter? Plot-level evidence from Senegal

ASSESSMENT OF FEMALE YOUTH PARTICIPATION IN AGRICULTURAL LIVELIHOOD GENERATING ACTIVITIES IN GWAGWALADA AREA COUNCIL, ABUJA, NIGERIA

This study examines female youth participation in agricultural livelihood generating activities in Gwagwalada Area Council, Abuja. The objectives of the study were to: examine the extent of female youth participation in agricultural livelihood generating activities and the income generated, determine factors influencing female youth participation in agricultural livelihood generating activities, and identify major constraints faced by female youth participating in agricultural livelihood generating activities. A multistage sampling procedure was used to select 133 female youths from 13 registered youth associations with 10 from each group in (4) peri-urban communities of the study area. Structured questionnaire was used to collect data while descriptive statistics and Logit regression model were used to analyze the data. The results showed that 30.1% and 14.3% of the respondents were engaged in crop and poultry production and generated an average income of ₦420,093.02 and ₦216,000.00 respectively while 3.0% and 4.5 only were engaged in crop produce processing and poultry meat and egg marketing and generated ₦29,250.74 and ₦14,166.67, respectively. The logit regression results indicated that factors influencing female youth participation in agricultural livelihood generating activities include age, education status, household size, income, occupation, and distance. Also, the major constraints hindering participation were inadequate access to land (43.6%), inadequate access to finance (41.6%) and high cost of production (16%). While the study indicates that a significant portion of female youths is engaged in crop and poultry production, their overall participation in agricultural activities is limited. The study provides critical insights into the potential of agriculture as a viable solution to youth unemployment in Nigeria. The study recommends implementing policies to improve land access for female youths, including land reform initiatives that prioritize youth ownership and leasing options. Additionally, it suggests exploring strategies to reduce production costs through input subsidies, partnerships with agricultural suppliers, and community-based resource-sharing initiatives.

Role Of Government Policies In Shaping Vegetable Marketing Practices: Evidence FromRajasthan

This study examines the impact of government policies on vegetable marketing practices in the Indian state of Rajasthan. Using primary data collected from surveys of 500 farmers, 100 wholesalers, and 50 retailers across five districts of Rajasthan, as well as secondary data fromgovernment reports and academic literature, the paper analyzes how various national and state-level agricultural policies have influenced the structure and functioning of vegetable value chains in the region. Key policies considered include the Agricultural Produce Market Committee (APMC) Act, contract farming laws, minimum support prices (MSP), and agricultural subsidies. The results show that the APMC Act has led to the development of a network of regulated wholesale markets which serve as the main marketing channel for vegetables, but its provisions restricting sales outside these markets have hindered direct linkages between producers and buyers. Recent reforms aimed at allowing private markets and removing barriers to interstate trade have had limited impact so far. Contract farming remains underdeveloped due to regulatory uncertainty and lack of trust between stakeholders. MSP haslittle relevance for most vegetable crops given their perishability and lack of public procurement. Input subsidies, while increasing yields, have exacerbated problems of overuse of chemicals and declining water tables. The paper argues for a more holistic, nutrition-sensitive approach to agricultural policy that goes beyond a narrow focus on boosting production and marketable surplus. Specific recommendations include investments in storage and cold-chain infrastructure, expansion of crop insurance coverage, promotion of Farmer Producer Organizations and shorter supply chains, and greater emphasis on sustainable production practices and nutrition education. Enhancing smallholder access to credit, information, and input-output markets remains critical

Farmers’ Perception and Financial Profitability of Mustard Production in Bangladesh

The study was undertaken to assess farmers’ perception and explore the factors affecting farmers’ decision to adopt mustard production along with estimate financial profitability and identify potentials and problems of mustard production. Based on stratified random sampling, 120 farmers were interviewed using a structured questionnaire to collect primary data from different villages of Ullahpara upazila under Sirajganj district of Bangladesh. A combination of descriptive statistics, mathematical and statistical technique was used to analyze the data and to achieve the objectives. The study depicts that the highest number of the respondents (35%) belong to the 31-45 age group. Seventy two percent respondents were small farmers having land less than 1.0 hectare and they allocated 34% of their farm area for mustard production. Financial profitability analysis shows that mustard production was profitable on both variable cost and total cost basis and its benefit cost ratio (BCR) was more than one. In case of farmers perception, it was revealed that short duration crop, consumers’ preferences, product price, extension services and sharing of work among household members were the main driving factors for mustard production. Applying dichotomous logistic regression model, four factors namely, farmers’ age, number of family members, experience and farm size were found as significant determinants of adoption of mustard production. Large domestic market, limited use of high-yielding varieties, growing demand for mustard oil and attack of pests and diseases were found as important strength, weakness, opportunities and threats of mustard production, respectively. Finally, the study recommends that there are ample opportunities to enhance mustard production by ensuring access to quality seeds, adopting new technologies, securing fair prices, providing input subsidies, and improving institutional credit facilities with favorable terms and conditions. Bangladesh J. Nuclear Agric, 38(1): 65-80, 2024

Nutrition for all? Input subsidies and equitable diets

AbstractWhile agricultural input subsidies can improve productivity and nutrition, a key unanswered question is whether such government initiatives influence equitable nutrition access across genders. We study gender disparities in dietary diversity among 7783 smallholder farms in Zambia, evaluating the potential of subsidies to mitigate gaps. Using Oaxaca‐Blinder decomposition methods, results reveal female‐headed households (FHHs) have significantly lower dietary diversity than male‐headed ones, with gaps ranging from 6% to 12% along the distribution. Male‐headed households (MHHs) also show 9% higher input subsidy participation, influenced by education and agricultural extension access among others. Crucially, increased FHHs' participation in input subsidies could potentially close the gendered dietary diversity gap, even surpassing MHHs by 17.8%, underscoring the promise of targeted efforts to improve gender equity. However, achieving socioeconomic parity with MHHs further amplifies positive impacts. Given these findings, facilitating FHHSs' access to input subsidies can promote more equitable nutrition outcomes between genders. Broader participation could be enabled by strengthening agricultural extension and education to equip farmers, especially marginalized female‐headed and remote households, to leverage subsidized inputs. Overall, this study demonstrates that prioritizing female‐headed households' inclusion in input subsidy programs, alongside integrated support, holds strong potential to narrow gendered disparities in dietary diversity among smallholder farms in Zambia. It provides key insights to inform the design of nutrition‐sensitive, gender‐aware agricultural policies.

Input Subsidies and Women Entrepreneurship: Evidence from Tanzania

ABSTRACT In many parts of the world, women face barriers to accessing improved agricultural inputs. In Tanzania, a program called the National Agricultural Input Voucher Scheme (NAIVS) was implemented from 2008 to 2014 to provide smallholder farmers with vouchers to purchase inputs at a subsidized price, with the goal of improving productivity and increasing income and food security. Using data from the Tanzania Living Standards Measurement Study panel, we analyzed the effects of NAIVS on female-headed households’ market participation, sales, and profitability. The analysis showed that NAIVS increased market participation of female-headed households by 11%, particularly in downstream positions in domestic value chains. However, there were no discernible effects on sales and profitability, indicating that although the program reduced input costs, production costs remained high enough to offset the efficiency gains from the subsidized inputs.

Closing the gaps in experimental and observational crop response estimates: a bayesian approach

Abstract A stylized fact of African agriculture is that crop responses to inorganic fertilizer application derived from experimental studies are often substantially greater than those from observational studies (e.g. surveys and administrative data). Recent debates on relative costs and benefits of expensive farm input subsidy programs in Africa, have raised the importance of reconciling these estimates. Beyond mean response differences, this paper argues for including parameter uncertainty and heterogeneity arising from variations in soil types, environmental conditions, and management practices. We use a Bayesian approach that combines information from experimental and observational data to model uncertainty and heterogeneity in crop yield responses. Using nationally representative experimental, survey, and administrative datasets from Malawi, we find that: (1) crop responses are low in observational data, (2) there are large spatial heterogeneities, and (3) based on sensitivity analysis, ignoring parameter uncertainty and spatial heterogeneity in crop responses can lead to questionable policy prescriptions.

Understanding Allocation and Farmers’ Access to Varied Level of Agricultural Input Subsidies from Different Tiers of Government: A Case Study in Kavrepalanchowk District, Nepal

Government support for essential agricultural services, such as agricultural input subsidies, is vital for empowering smallholder farmers. This study explores distribution and the factors affecting farmers access to varied level of government agricultural input subsidies in Kavrepalanchowk district, Nepal. The study relied on survey data from 219 randomly selected households. Results showed that 72 percent, 8 percent, and 20 percent of sampled households received less than NRs 15,000, NRs 15,000 to 30,000, and more than NRs 30,000 in input subsidies per year, respectively. Among the recipients of the input subsidy, the mean subsidy for electricity, chemical fertilizers, agricultural machinery, interest subsidy, and cash subsidy for the GI tunnel were NRs 4,061, 7,143, 35,633, 67,500, and 4,72,000, respectively. Results from a multinomial regression show that households with higher income, farms near roads, and registered farms receive a higher level of input subsidies. It is recommended that farmers register their farms either as a firm or company or as farmer's groups or cooperatives. To effectively perform their roles, there is a need to review the subsidy delivery mechanism, ensuring its reach to the most constrained farmers.

Informality, rule-of-thumb consumers, and the effectiveness of monetary policy in emerging economies

Informality, rule-of-thumb consumers, and the effectiveness of monetary policy in emerging economies

Exploring non-price factors shaping supply response: insights from Cameroon's banana and pineapple horticultural industries

Horticulture has the potential to meet the development agenda of agrarian economies, like that of Cameroon, through the cultivation of high-value fruits and vegetables. Bananas and pineapples are two widely grown fruits in Cameroon for income, employment, and foreign earnings. Cameroon remains an important global player in the banana trade. To boost production, identifying important factors that drive the supply response of such crops is an important policy question. Here, we ask if non-price factors are important determinants of supply response of such horticultural crops, a question that has received very little attention. The objective of this study is thus to estimate the effect of non-price factors on the supply response of bananas and pineapples. To do this, a Nerlovian response function is directly estimated via an Error correction model using time series data, to capture long-run dynamics of production and supply. The results show that non-price factors such as rainfall, temperature, and land are the major drivers of the supply response of both crops. The effects of these factors, however, vary with the crops. We provide plausible explanations why non-price factors are salient. Our results suggest that improving the timely availability of weather and climate information, and input subsidies are possible areas for policy interventions.

THE COMPETITIVENESS OF COMMODITIES SEAWEED USING POLICY ANALYSIS MATRIX (PAM)

Seaweed products from the city of Tarakan have been traded to outside areas such as Makassar and Surabaya before being exported overseas. This study aims to analyze the competitiveness of seaweed in Tarakan City using the policy analysis matrix (PAM) method. The PAM method is used two main indicators for measuring competitiveness, namely the Private Cost Ratio (PCR) as an indicator of competitive advantage and the Domestic Resource Cost Ratio (DRCR) which is an indicator of comparative advantage. The results showed that seaweed in Tarakan City had a PCR value of 0.37 and a DRC of 0.08, the private profit (PP) obtained was Rp 6,444,319 financially has a competitive advantage at the business level farmer. Social profit (PS) of Rp 30,386,901 economically or the economy as a whole has a comparative advantage which means efficient use of resources. The impact of government policies on the output of seaweed cultivation is not protective with an NPCO value of 0.34. The impact of government policies on seaweed cultivation inputs is not protective with an NPCI value of 1.29, meaning that farmers have not received positive incentives from the current input subsidy policy. The EPC value of 0.31 means that the overall impact of government policies on input-output is protective and provides positive incentives to farmers, but is still relatively weak and very vulnerable if policy changes occur. The regional government is expected to provide protection to seaweed cultivators in the form of setting costs for purchasing seaweed and also to strictly supervise cartel practices in the seaweed trading system.

Do Community Capitals Influence Climate Adaptation? Critique of Financial, Physical, Human and Social Capital in the Adoption of Climate Smart Agriculture Technologies among Smallholder Farming Community in Lamu County, Kenya

Purpose: This study aimed to establish a framework for testing the community capitals theory and assessing the empirical significance of financial, physical, human, and social capital in the adoption of climate-smart agriculture technologies. Materials and Methods: Data was collected through semi-structured questionnaires administered to 256 randomly selected household heads. An ordinal logistic regression model was employed to analyze the significance of community capitals in climate-smart agriculture adoption. The data is presented in tables. Findings: The results revealed several important findings. Access to finance has a significant positive association with Climate-Smart Agriculture adoption (P<0.001, OR=3.23). Input subsidies are also significantly positively associated with Climate-Smart Agriculture adoption (P=0.001, OR=3.66). Training shows a significant positive association with Climate-Smart Agriculture adoption (P<0.007, OR=2.03). Labor has a highly significant and positive relationship with Climate-Smart Agriculture adoption (P=0.001, OR=8.97). Interaction positively and significantly correlates with higher levels of Climate-Smart Agriculture adoption (P=0.021, OR=4.04). Additionally, empowerment demonstrates a significant positive association with Climate-Smart Agriculture adoption (P=0.006, OR=2.96). Notably, the model challenged the conventional view of finance and labor as independent determinants for climate-smart agriculture adoption, instead positioning them within a social context. Implications to Theory, Practice and Policy: The study suggests that climate action programs should prioritize social ties over investments in financial, physical, or human interventions to enhance climate-smart agriculture adoption and promote resilience. Lastly, combining the Community Capital Framework with Social Capital Theory offers a more detailed understanding of the factors influencing Climate-Smart Agriculture adoption, emphasizing the interaction between various types of capital and social dynamics.

Effect of Input Subsidy Reduction on Greenhouse Emission Reduction Potential in Paddy Production Systems in Karnataka State of India

Increasing concerns and call for reduction in Greenhouse gas (GHG) emission have necessitated the search for broader and all-inclusive policy initiatives, extending into agricultural production, where high carbon energy inputs are used. One classical policy strategy for GHG emission reduction, has been taxation. However, given the critical role of agriculture, especially in developing economies, policies that directly or indirectly increase agricultural inputs costs and reduce their demand require stronger theoretical, conceptual and empirical support to ensure that while agri-environmental quality is promoted, welfare of farming households, food security and overall economic growth are not compromised. Using paddy production in Karnataka state in India, the study assessed effects of agricultural input taxation (reduction in rice input subsidy) on future demand for such inputs and their effect on GHG emission reduction, vis-a-viz production and welfare losses. In microeconomic modelling framework, we applied quadratic almost ideal demand system and stochastic efficiency functions in the analysis of the data. Data for the study, a micro-level farm data, was obtained from Cost of Cultivation Scheme (CSS) for irrigated and non-irrigated production systems, covering the period 2009 -2018 production seasons. Specifically, the study used three future tax regime scenarios- 10%, 20% and 30% input subsidy reduction rates, to model an optimum greenhouse emission reduction potential. The results revealed that inputs evaluated were normal with inelastic demand functions; many input coefficients implied significant complementary relationships; irrigated paddy production system had higher estimates of GHG emissions. Input taxation (reduction in subsidy) under all the three scenarios effectively, resulted in declined inputs consumption patterns, and subsequently led to significant decrease in greenhouse emissions. The highest GHG emission reduction potential was observed in irrigated farming system. Greenhouse emission reduction potential was optimal at moderate subsidy reduction policy rate of 10%. It is recommended that, given the inelastic estimates derived, moderate tax (reduction in subsidy) policy option on inputs would yield effective greenhouse mitigation with appropriate compensation through effective integrative schemes.

Are farm input subsidies a disincentive for integrated pest management adoption? Evidence from Zambia

AbstractInput subsidy programmes (ISPs) remain a popular but contentious policy tool to promote agricultural intensification, food security and poverty reduction across Africa. Although previous studies have explored the impact of ISPs on various smallholder outcomes, no studies have analysed the impact of recent ISPs on pest management. This is particularly important given the increasing pest challenges due to climate change and the recent surge in pesticide use in low‐income countries and its associated negative consequences for human and environmental health. Thus, this study assessed the effects of ISPs on smallholder adoption of sustainable pest management practices, using data from 1048 smallholder maize plots across major maize‐producing zones of Zambia and a control function regression approach. We find consistent evidence that input subsidy receipt is negatively associated with smallholders' adoption of environmentally friendly and sustainable pest management strategies. Participation in the Zambia ISP (particularly the flexible e‐voucher system) encourages synthetic pesticide use, at the expense of sustainable practices. We also find that farmers consider synthetic pesticides and biopesticides as substitutes and are more likely to adopt sustainable pest management when they have tenure security and access to financial resources. Given the human and environmental health consequences associated with synthetic pesticide use, it would be important to leverage input subsidy schemes to promote the adoption of safer and more sustainable alternatives to synthetic pesticides. Beyond input subsidies, policies that improve tenure security and financial access for smallholders can promote the adoption of sustainable pest management practices.

Input Subsidies In Agriculture Viable? Some Macro Economic Concerns

Input Subsidies In Agriculture Viable? Some Macro Economic Concerns