Effects of Fertilizer Subsidies in Zambia: Have the Goals been Achieved?

Zinnbauer, Maximilian and Mockshell, Jonathan and Zeller, Manfred (2018): Effects of Fertilizer Subsidies in Zambia: Have the Goals been Achieved?

Abstract

Fertilizer subsidies are again part of the policy agenda in Sub-Saharan Africa since the 1990s. Governments spend large shares of their agricultural budgets and their means to fight poverty on such programmes, but economists formulated doubts whether these investments will pay off. This paper reviews the existing literature on effects of fertilizer subsidies in Zambia, presents an analytical framework on input subsidies and compares the empirical evidence to the goals of the fertilizer subsidy. Major findings are that the subsidy programme has failed to substantially reduce poverty and to improve food security via decreased maize prices. Farm incomes have increased moderately, but the overall costs exceed the benefits by far. Reasons for this are identified as poor targeting, diversion and leakage. The paper concludes with a review of policy recommendations, mainly focused on improved targeting and diversification away from pure fertilizer subsidies.

• Item Type: MPRA Paper
• Language: English
• Keywords: fertilisier subsidies, input subsidies, Zambia, food security
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q0 - General > Q01 - Sustainable Development; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q12 - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q13 - Agricultural Markets and Marketing ; Cooperatives ; Agribusiness

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